Pru Life UK exec eyes 6-8% growth for PH economy in 2021

A ranking Pru Life UK official forecasts about 6-8 percent expansion for the Philippine economy in 2021, a turn-around from the expected negative print this year because of the pandemic.


Charles Wong, Pru Life UK investments assistant vice president and head of equities, said the Philippine Stock Exchange index (PSEi) is also expected to grow around the same level as the gross domestic product (GDP) next year “plus a bit for inflation because (the) equity market does incorporate inflation inside.”


“Generally, if the economy grows by 6-8 percent, then the (PSE) index would grow by about let’s say 7-9 percent or even a little bit more,” he said during the virtual launch of the company’s latest product, the PRULink Equity Index Tracker Fund.


Wong’s next year GDP forecast for the Philippines is generally in line with the government’s 6.5-7.5-percent growth target for 2021-2022.


He projects growth for the PRULink Equity Index Tracker Fund to expand around the same level as the domestic growth and the PSEi next year “because this is a fund that generally tracks the index.”


Pru Life UK officials are optimistic on the performance of their latest offering despite the pandemic-related volatilities in the stock market.


“Admittedly, we are in a very difficult crisis. It is also tragic that we are also having a health crisis. But in terms of equity and stock market, a crisis is always the best time to be investing your money,” Wong said.


During the same briefing, Pru Life UK president and chief executive officer (CEO) Antonio de Rosas said the insurance industry continues to thrive despite the pandemic.


For Pru Life UK alone, he said “we are tracking almost around 80 percent of what we have been doing last year.”


De Rosas attributed this performance to the impact of the movement restrictions that the government is implementing to arrest the rise of coronavirus disease 2019 (Covid-19) infections.


He said the company was able to address the impact of the quarantine by enabling its employees, as well as the insurance agents, to tap technology to continue their work.


De Rosas added business remains brisk because people are now more conscious about securing their financial capabilities should sickness arise.


The latest Pru Life UK offering is almost similar to the PRULink equity fund, except that it has a different fund manager and investment strategy.


PRULink equity fund is managed by Eastspring Investments (Singapore) Ltd. while PRULink equity index tracker fund is managed by Pru Life UK Asset Management and Trust corporation.


PRULink equity fund is actively managed, which means it can be invested in Philippine stocks that are not part of the main index, while the PRULink equity index tracker fund is invested in stocks that are part of the PSEi.


De Rosas said they decided to also launch this product because assets under management that are under PRULink equity fund have increased to nearly PHP40 billion, one of the largest equity funds in the local stock market.


“When you have a fund as large as that, it is more challenging to manage because a fund as large as that tends to move markets marginally,” he added. (PNA)


Source: Philippines News Agency

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