RISING prices has shaken the confidence of the country’s largest publicly-listed company in terms of market capitalization.

“High prices would make insurance products less likely in the minds of people. They’re going to be thinking more of the food on their table,” Manulife Financial Corp. chief executive Carl S. Gustini said on Thursday.

“While last year was a watershed year for us, it’s going to be a challenging time this year,” Gustini during a luncheon meeting he hosted for reporters.

The Philippine government is struggling “in an environment characterized by high oil prices and weak global demand,” Socioeconomic Planning Secretary Augusto B. Santos said on Wednesday.

Santos expects this year’s growth target to dip by 5.7 percent as April inflation hit 8.3 percent, further dampening consumer spending.

Gustini noted that such environment wouldn’t help the already-low penetration rate of 0.8 percent of the domestic insurance industry.

The Manulife executive said “internally, our aspirations would be higher” this year, citing referring to their 15-percent growth target for premiums and profit for 2008.

“We need to come up, build more products that would hike that rate up; like more flexible products.”

He said Manulife will continue selling its Unit Link product, a high-risk investment vehicle for government bonds, and which formed 25 percent of their total sales last year. Unit Link represented P200-P300 million of new business sold since it was launched in October last year.

Likewise, Gustini said that bancassurance, which contributed 6 percent to 7 percent to their topline last year, is expected to put in a 15-percent share this year.

Manulife’s joint venture with Chinabank manages the bancassurance business of the Toronto, Canada-headquartered Philippine subsidiary.

Gustini that imposing new taxes on insurance companies will not help increase the current low-penetration rate.

However, the proposal to require higher capital for insurance firms may be more acceptable and beneficial for the industry, according to Gustini. “It would send a message to the public that everybody is serious with the business.”

That would also open opportunities for Manulife to buy insurance companies that, he said, could open up their distribution network in the provinces, especially in the southern Philippines.

The 100-year-old Manulife forms 32 percent of the total market capitalization in the Philippine Stock Exchange. Eighty-five percent of its revenue come from Metro Manila, while 15 percent from provinces. A third of its provincial operations are contributed by its Cebu and Davao offices.

FOOD and beverage conglomerate San Miguel Corp. (SMC) plans to further strengthen its presence in Indochina. This, as a company official revealed that preparations are underway to put up this year beer and liquor-manufacturing facilities in three countries in that region to take advantage of the growing markets there.

Inflation brings jitters to Manulife Insurance

RISING prices has shaken the confidence of the country’s largest publicly-listed company in terms of market capitalization.

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