More investors now expect the upcoming elections to hurt the economy but pessimism over the event’s impact on profits has eased, a survey released yesterday by financial services group ING found.

Along with this, the respondents’ upbeat outlook for the first quarter of 2010 has slightly dimmed, according to the latest ING Investor Dashboard Survey.

The poll was conducted in December and culled responses from 308 affluent Philippine-based investors.

"The percentage of investors who believe the upcoming elections in the Philippine will have a negative effect on the economy has increased from 15% to 24%" ING said.

Foreign business chambers and even the Trade department have said investor interest might be lukewarm in the first half of 2010 as firms wait and see how the elections go.

"However, respondents’ anticipation of the incoming elections having a negative impact on their investment portfolio decreased from 33% to 23%," ING said.

Asked what the next president should focus on, respondents most commonly tagged the economy, education, and health-care.

In the meantime, the number of those upbeat about the first quarter decreased. While 50% said profits would increase, this was down three points from the 59% notched in an earlier survey.

The ING report did not provide likely reasons for this dip, but did note that investor confidence at the time the survey was being conducted had dipped in the aftermath of two devastating storms and political violence in Maguindanao.

These events, it said, halted an uptrend in investor confidence seen in the first three quarters of 2009. By the last quarter, the Philippines’ investor confidence index slipped one point to 134 from 135 in the third quarter.

This was in contrast to an increase in the regional average to 147, up five points from the third quarter.

The Philippines’ score in the fourth quarter puts investor confidence here as the second least optimistic among ten economies in Asia, the others being India, China, Taiwan, Singapore, Thailand, Hong Kong, Malaysia, Indonesia, and Korea.

Moving forward, Philippine-based investors still favor low-risk instruments, the survey found. This type of investment found favor among 56% of the respondents, better than the 50% who answered similarly in an earlier survey.

Cash and deposits, foreign currency, and local real estate were the most common investments that respondents said they would increase their exposure to in the first quarter of 2010.

"Barring negative development, especially in relation to the elections, the country’s strong corporate fundamentals and healthy consumer and overseas remittance sectors should bode well for [the] market," said Cesar C. Zulueta, managing director of ING Bank’s Manila branch.

Also, fewer investors (29%, down 12 points) are concerned about the impact of inflation on their investments.

Source: http://www.bworldonline.com/main/content.php?id=5334