A very good introductory look at the Philippine economy if you have considered investing there. I have spent quite a lot of time there over the last few years as I own a business in the country. The question is, will its 7.2% growth continue well into the future?
To be honest with you, I have some doubts. Here is why. The biggest short-term term test for the country will have nothing to do with it’s overall economy and everything to do the US Capital Markets.
As you know, our mathematical and timing work predicts a severe recession and a bear market in the US between 2014-2017. The Philippine economy and it’s markets tend to follow. In this case, if the Philippines Stock Exchange PSEi Index breaks below 5,600….there will be hell to pay. Basically, there is no support (at all) until it drops about 60-80%.
This suggests that if the Philippine stock market doesn’t decouple from the US stock market when the bear market starts and follows it lower, the end of the Philippine “miracle growth” is just around the corner….unfortunately, as I love that country and its people.
