MANILA — Brokerage firm Philstocks Financial Inc. expects the benchmark Philippine Stock Exchange index (PSEi) to soar to a new record high of 10,700 to 11,000 points this year, as the tax reform program further drives the country’s economic growth.
Philstocks Financial senior equity analyst Justino Calaycay told reporters the enactment of the Tax Reform for Acceleration and Inclusion (TRAIN) has “upped the ante on the economy going forward.”
TRAIN is the first phase of the Duterte administration’s tax reform package.
Calaycay said the new tax structure was expected to generate sufficient revenue for the country to get its ambitious push for the “golden age of infrastructure” under the “Build, Build, Build” agenda.
He said a Gross Domestic Product (GDP) of about 7 percent should pull up earnings higher this year.
Calaycay downplayed the impact to the equities market of the 10 basis points increase in the stock transaction tax.
TRAIN increased the stock transaction tax from 0.5 percent of one percent on its gross selling price to 0.6 percent.
He said the impact of the higher stock transaction tax is insignificant as long as the market stays good.
After posting losses for two years in a row, the PSEi benchmark for the first time closed at a record high on the last trading day of 2017 at 8,558.42 points from the previous year’s 6,840.64 points.
Meanwhile, Calaycay’s preferred sectors for this year are telecommunications, infrastructure, and construction.
“The entry of a third player in the telecommunications industry will keep interest in the sector heightened,” he said. “It is not on the number of projects approved but projects actually rolled out that will impact on the economy.” (PNA)