WR Advisory Group: Philippines Very Risky for Investors
Based on its research covering a wide range of economic factors, financial readings and the public’s perception of governance, the WR Advisory Group finds the Philippines very risky for investors, according to a news report by the Manila Bulletin.
To put things in perspective, posted below is an excerpt from the Manila Bulletin report. Some parts in boldface…
Investing in the Philippines is expected to be “very risky” in the coming months, driven by economic uncertainties and growing political dissatisfaction with the Marcos administration, according to professional services firm WR Advisory Group.
Based on its inaugural Philippine Political and Country Outlook Report, WR Advisory Group assigned the country a score of 10.375 out of 25, placing it at an elevated risk level with a deteriorating outlook.
WR Advisory Group President and Chief Executive Officer (CEO) Robin Michael Garcia said the score indicates that investing in the country carries heightened risk due to ongoing economic and political factors.
“You can invest, but just know that there are risks. So if you see a potential opportunity in this period, it’s going to be risky,” Garcia said in a media briefing on Thursday, Oct. 22.
Regarding the country’s economic outlook, he noted a strong possibility of stagflation, a scenario marked by simultaneous high inflation and elevated unemployment.
Garcia added that these risks are further compounded by national government debt, which reached ₱19.07 trillion at the end of July, equivalent to 66 percent of the country’s gross domestic product (GDP).
Economic growth also slowed to 2.3 percent in the second quarter, while inflows of foreign direct investment (FDI) dropped by more than 33 percent through May.
Garcia warned that stagflation is a real possibility, particularly if the government “does not pay enough attention to economic management and economic policy.”
“The more that we think about other things, the more that the attention is going everywhere, except for solving this potential scenario,” he stressed.
Much of that focus, according to Garcia, has shifted to political controversies, including the ongoing impeachment proceedings against Vice President Sara Duterte.
While clarifying that he was not questioning the validity of the impeachment, he explained that the proceedings come at a time when Congress should be prioritizing legislative reforms to address the country’s economic challenges.
“At this time, there are a lot of economic issues. Firms care more about economic legislation and economic policy rather than mere politics,” Garcia said.
He identified politically sensitive sectors, including energy, telecommunications, mining, and banking, as the most vulnerable to these heightened risks.
The report also noted that President Ferdinand Marcos Jr.’s performance ratings continue to decline, while frequent turnover in his Cabinet poses additional stability risks for businesses.
“Senate confidence also deteriorated sharply, adding institutional strain to an already weak legislative and regulatory environment,” the report stated.
These factors are accompanied by a negative assessment of national conditions, with 68 percent of Filipinos saying that the Philippines is going in the wrong direction, according to the report.
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the WR Advisory Group is correct with its analysis about the Philippines being very risky for investors? Are you convinced that foreign investors are avoiding the Philippines right now? Do you think the Philippines is going towards the wrong direction now?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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