Philippines Banking & Financial Services Q1 2020
Our positive outlook on the Filipino banking and financial services sector remains intact; however, we caution that thedownside risks to our view have heightened since our last update. We point to the Philippine economy slowing faster thanpreviously anticipated in 2019, with a more significant slowdown in external demand and disruption to emerging market financingconditions the most prominent threat to growth over the coming quarters, increasing the risks to our forecast for a moderaterecovery in 2020. This will have a knock-on effect on the four sectors we track. In the growing and well-capitalised and bankingsector, this could mean a cooling off in credit demand and profitability. Meanwhile, both segments of the insurance market and theexpanding asset management industry are set to continue benefiting from rising household incomes and an expanding middleclass. Furthermore, the country's underdeveloped but growing stock exchange market remains susceptible to the slowdown anddeteriorating business environment.
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