The resulting vicious cycle of negative sentiment could eventually lead to a self-fulfilling prophecy of a disaster. To calm investors, President Fidel Ramos spoke publicly in defense of the real estate and financial sectors, before leaving on May 6 for a tour of the Americas. Still, many fund managers think the bourse may remain a laggard for the next 12 months or so. The larger question raised by the property scare is whether it is healthy, at this critical stage in the nation's economic recovery, for so much of its resources to go into the cement, glass, marble and steel of luxury edifices instead of more productive projects in infrastructure, manufacturing and social development. Healthy or not, Raphael Manalaysay of SocGen-Crosby UBP Securities thinks that kind of resource allocation is unavoidable in a recovering economy.
Property is almost always the first thing they look at.
Manalaysay feels that the Philippines may have become a victim of its own economic optimism. This can lead to two contrasting reactions, both undesirable. One is the excessively bullish sentiment of investors, lenders and developers who believe the party will never end. Hopefully, Filipinos can find a middle road to steady, if not always spectacular, growth. All Rights Reserved.