The Philippine Stock Exchange index (PSEi) is expected to rise to 7,500 this year alongside an expected improvement in earnings, said FMIC research head Cristina Ulang.

“The PSEi is anticipated to reach 7,500,” Ulang said, adding that price earnings ratio is expected to improve to 17 times.

The PSEi may even reach 7,700 if the economy grows even better than expected, she said.

Given an improving economy, the preferred sectors are those that are likely to grow with improved consumer spending and investments. These include holding companies, conglomerates, consumer, retail and banking.

Conglomerates have diversified portfolio and risks, exposure to infrastructure projects and large balance sheets that create capacity for growth.

First Metro president Rabboni Francis Arjonillo said the Philippine economy would continue to be robust and outperform its ASEAN peers in 2017.

At the same time, he said there would be a lot of internal and external changes and threats that would impact the country’s economy.

“But we are optimistic that given our sound macroeconomic fundamentals and compelling investment story, the country’s economy will remain strong,” he said.

Inflation is expected to rise moderately at 2.8 percent to 3.2 percent attributable to the rebound of oil prices, strong domestic demand and weaker peso.

Dollar remittances from overseas Filipinos, meanwhile, will continue to drive growth as the US economy strengthens.

The recovery of oil prices is also seen to translate into higher demand for overseas Filipinos, FMIC said.

Philippine exports are likewise projected to recover this year with a 5 to 8 percent growth underpinned by the moderate growth on the global economy and the strengthening of the US economy, which accounts for 16 percent of the country’s total exports.

Imports, on the other hand, will sustain their double-digit growth of 10 to 14 percent driven by robust capital spending and higher oil imports.

On the other hand, the Philippine peso will remain under pressure as the US economy continues to gain traction, leading to the strengthening of the US dollar. The Philippine peso is estimated to trade at 51 against the dollar this year.

For capital-raising, FMIC anticipates more fund-raising for PPP projects and an increase in equity issuances particularly for market leaders with good track record, said Justino Ocampo, FMIC executive vice president and head of investment banking group.

More M&A transactions are also expected driven by low valuation, strong balance sheet and liquidity.

FMIC is a leading investment bank in the Philippines. In 2015, it successfully completed 19 deals, having participated in 88 percent or P399.14 billion of the total P456.04 billion debt and equity transactions last year.