Julius Baer’s head of Asia research believes Philippine stocks are currently “a worthy investment”, according to a briefing held yesterday at the bank’s Hong Kong headquarters.

In a media presentation of his 2012 Global and Regional Economic Outlook, Mark Matthews told journalists that the country’s stocks were some of the most attractively priced at the moment, due to a number of factors.

“The Philippines is Asia’s dark horse. The Philippine market is possibly underrated at this moment in time. The fundamentals and opportunities look good," he said. “A basket of Philippine consumer and banks stocks is a worthy investment."

He pointed out that the Philippines has a demographic profile that is quite unique in Asia: It has the lowest median age in Asia, and the largest segment of the population is people from 0 to 4 years old. Because of this, the population (officially 93 million but likely over 100 million), will double in the next 30 years.

“The world population is getting larger, but it is also getting older. More young people will be needed to do the things that old people cannot do in countries from Europe to China,” said Matthews.

The Philippines has good fiscal discipline, with the lowest consumer debt-to-GDP ratio in Asia, at 7 per cent, said Matthews. The corporate debt-to-GDP ratio is also very low at 32 per cent. Philippine banks have low loan-to-deposit ratios, so there is much more lending that can be done. Its loan to deposit ratios have come down from 90 per cent to 68 per cent since 1999.

The Philippines is also one of the most under-geared countries in the world. Its economic growth is relatively less sensitive to changes in interest rates. Consumer debt to GDP is just 7 per cent – the lowest of all Asian countries.

And for the first time in its history, the Philippines is a creditor nation. That means it will no longer be “another domino” in times of crisis, said Matthews.

Other top picks were Chinese insurers, the Japanese auto sector and Taiwanese technology stocks.