MANILA, Philippines – Inflation and elections are among the factors that investors should look at closely to post the most gains in 2022, said Metrobank’s investment arm First Metro Investment Corporation (FMIC).

In a briefing on Tuesday, January 11, FMIC head of research Cristina Ulang said corporate profits are projected to bounce back this year, with earnings per share growth hitting 35%. 

Given that, an upside of 13% to 15% is seen for the Philippine Stock Exchange index, or levels reaching around 7,900 to 8,100.

Ulang noted that key issues and themes for 2022 would be inflation-wide margins, elections and its consumer spending beneficiaries, the debt-balance sheet strength of companies, rising interest rates and beneficiaries of wider spreads and yields, as well as higher economic growth.

Ulang, however, warned that new variants of COVID-19, high inflation and interest rates, protectionism, global debt, power shortages, and fiscal blowouts are among the key risks investors should monitor.

Here are FMIC’s stock picks for 2022:

Dividend plays

• Globe
• PLDT
• Converge

Inflation plays, commodities, and banks

• Philex Mining
• Nickel Asia
• Semirara
• Metrobank
• BDO
• BPI

Energy

• AC Energy
• Meralco
• Semirara

Infrastructure, logistics, real estate investment trusts (REITs)

• Metro Pacific Investments Corporation
• Aboitiz Equity Ventures
• DMCI
• Megaworld REIT
• Filinvest REIT

Election spending

• Universal Robina
• Jollibee
• Ginebra San Miguel
• Bloomberry
• GT Capital

Logistics and trade

• Ayala Land Logistics Holdings Corporation
• ICTSI

‘Back on track’

University of Asia and the Pacific economics professor Victor Abola said the Philippines will see further economic recovery in 2022.

Abola projected that the government will not be able to attain its target of 7% to 9% gross domestic product growth for the year, as he sees it settling between 6% to 7%.

Meanwhile, he projected inflation to settle within the 3% to 4% target band.

Abola expects the Philippine peso to trade at P51 to P52 against the US dollar.

He also sees no credit downgrade for the Philippines, with the economy having some fiscal and monetary space. – Rappler.com