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Why you should stay away from Success 200

Ponzi-scheme-1It almost feels like every week there’s a new scam that the SEC has to warn Filipinos about. Online investment scams are becoming more common these days as more Filipinos log on to the internet and use it in their day-to-day lives.

This week, the SEC issued an advisory warning people against Success200, telling investors to “exercise self-restraint from investing their money into such investment scheme,” which is a nice, polite way of saying “don’t put your money in this scheme.”

What is Success200? The company is essentially a scheme that asks investors to put in anywhere from P1,800 (low-end) to P36,000 (high-end), with a promised return of P10,000 to P200,000 upon payout exit, respectively. That’s a “guaranteed” ROI of 455.56%, which is unrealistically high and should already set off the warning bells in your head.

On their website, Success200 state that they are a “iuly [note: the typo is theirs, not mine – I assume they meant “duly”] registered domestic corporation with the Securities and Exchange Commission with SEC Registration No. CS201509200 issued May 12, 2015.” But just because a company is registered with the SEC, it doesn’t automatically mean they are authorized to take investments from customers. The SEC itself says in the advisory that the company has not obtained permission to solicit investments, as required under Section 8.1 of the Securities Regulation Code.

Because they have no license to take money for investments, you should not give them your money.

In their defense, Success200 state on their site that they are not an investment company; instead, they claim that they are simply in the multi-level marketing industry. But what are they marketing? The product is supposedly “pure agaricus capsules”, but to earn anything from the scheme, each participant HAS to recruit two other people. In addition to that, each person has to put in money.

Of course, some multi-level marketing opportunities can be legitimate. But if it looks like a pyramid scam, well, you know what they say; if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck. And if the SEC is warning you away from certain investments, then they have good reason to do so.

Don’t lose your money to scams like this. Many victims of scams aren’t rich; they’re regular working-class people who were duped by fraudsters. Just because someone on an internet forum said that they earned money from one of these schemes doesn’t mean it’s reliable. And just because they have one form of SEC registration doesn’t mean they’re actually allowed to take your money as investments.

If you come across an opportunity like Success200 that’s too good to be true, it probably is. Protect yourself by consulting this handy slideshow on how to detect an investment scam, and doing more research on your own, before putting your hard-earned money in anything. And for investments you can make for just P5,000, you can read this article on the topic.

Read the SEC advisory here.


What you can learn from the Chinese stock market crisis

While the world had its eyes on Greece and the Eurozone, something big was happening closer to our doorstep — a 30% drop in the Shanghai Composite Index in the span of just three weeks. Hundreds of companies stopped trading, and the Chinese government brought the hammer down to try to stop the skid, even threatening to arrest people who short sell. Many analysts think that these actions may have just made things worse.

china economy

(Photo from HERE)

The Chinese stock market, before this drop, had been having a ridiculously good run, soaring on the wings of individual investors. These small investors started buying a lot of stocks over the last year with borrowed money (also known as margin financing), encouraged by the government to invest in the stock market. Because of this borrowing, more than 80% of Chinese investors are small-time individuals; in most other markets, investors are mostly institutes. The influx into the stock market sent valuations skyrocketing. The Shanghai index increased over the last three years without matching the growth rate of the Chinese economy.

But what goes up must come down, and that’s exactly what happened. Because the growth was being driven by momentum and not fundamentals, people began to fear that it was unsustainable, and began to sell, triggering the steep drop in stock prices. In the long term, the real value of these stocks will be and should be reflected by the market.

So what does this mean for the regular Filipino? At the moment, the Chinese economy’s downturn won’t have lasting effects on us for the short term. The companies listed in the Chinese stock markets are not directly connected to the Philippine economy. This means that ordinary Chinese are taking most of the impact of the crash.

And even after the stock market plunge, China’s economy is still growing at the predicted pace. They already released their second quarter 2015 growth at 7% — although there are questions about the validity of this figure.

However, it’s the threat of a slowed-down Chinese economy that would be a problem for us. If China’s growth falls below 7%, that could affect many of manufacturers in ASEAN including the Philippines — since our region provides a portion of the intermediate goods for China to finish or complete.

There are a few lessons you as an individual investor (or one trying to be) can take from the Chinese stock market crash, though:

1. Don’t sell in a panic. A lot of people’s first instinct, when faced with a crash, is to sell, which just makes the crash worse. Don’t panic; always have an eye on the medium- to long-term. With the strong fundamentals of the Philippine economy, more likely than not any dip caused by panic about the Chinese stock market will ease over time.

2. Focus on the internal strength of the economy. Many of the infrastructure projects are limited to local blue chip firms. They should be setting the stage for future returns once these projects go online. Hopefully these projects funnel and facilitate the movement of income from these big firms to the smaller ones.

3. Don’t borrow money to invest. I would recommend that you only invest money you already have and won’t need in the medium- to long-term instead of getting margin loans to make investments. When you buy stocks with borrowed money, you can’t afford to ride out a crash by holding on to your stocks until prices climb back up; you have to sell what you can so you can pay back your lender. And if the market has fallen by a lot, you might lose all your money and can’t repay your debt. Only invest what you can afford to lose.

All these economic crises hitting at once may make you worry about your own investments. But the Philippines, despite being exposed to China’s volatility, is still targeting 7 – 8% growth, according to Economic Planning Secretary Arsenio Balisacan. We still don’t know how we’ll be ultimately affected by what’s happening in China right now, but the effects should be manageable in general.

If you’re an investor, remember to stick to your investment timeline and long-term goals, and keep an eye on the China story as it develops over the next few weeks and months but do not be in fear.


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A basic guide to ETF’s

ETFI’ve said before that I pray that more Filipinos become moderate investors, even if most of them are conservative now. A good way to become a moderate investor is by educating yourself on the different investment instruments, and distributing your investments across them.

One investment instrument that gets a lot of attention is “pooled funds”, in which you join a “pool” of other investors, and a fund manager handles the whole pool of money depending on the objectives of the fund. Mutual funds and UITFs fall under this category.

But there’s a relatively recent addition to this category: ETFs, or exchange traded funds. ETFs became available in the US in 1993, Europe in 1999, and the Philippines in 2013. While there are many types of ETFs available in more advanced markets, they haven’t made a big splash here yet. I’ve been getting a few questions about ETFs, so I’ve put together a basic guide here so you can learn more about them.

What are ETFs?

An exchange traded fund is an investment fund that’s traded like a stock. There are lots of kinds of ETFs; some of them track foreign stock market indices, specific sectors like energy or oil, or commodities.

But the most basic type of ETF simply tracks a benchmark index to match its performance. So if an equity index ETF is tracking the Philippine Stock Exchange index, its underlying securities would consist of stocks like Ayala Land, SM Investments Corporation, PLDT, BPI, and so on, much like an equity mutual fund or UITF.

In short, think of an ETF as a mutual fund that you can buy and sell on the stock market. And because ETFs are traded like common stocks, they don’t have a NAVpu or NAVps like UITFs or mutual funds; their share prices change throughout the day as the market trades.

Basically, you get the diversification of a mutual fund with the flexibility of stock trading combined in an ETF.

What are the pros and cons of ETFs?


  • Cheaper diversification. Buying into just one ETF gives you exposure to a whole group of equities, meaning you don’t have to buy each individual stock yourself. So for a small amount of money, you can have a diversified portfolio. Anybody who can buy the minimum board lot can therefore participate in the growth of the Philippine economy. And ETFs are transparent about their structure; you can just visit their site and see the underlying securities that make up the fund (and in what percentage).
  • Can cost less than actively managed funds. Mutual funds charge management fees of around 2%. UITFs can have trust fees of 0.20% to 1.50% per year. With buying and selling stocks, your costs will be lower. This is because an ETF is passively managed, meaning you’re not paying a fund manager for his services; you’re just paying brokerage fees.
    • Here’s an example to make things clearer. If you invest Php 50,000 in a UITF, you’d pay up to P750 (1.50%) in fees. (There may also be fees for early redemption.) Compare that to the total trading costs of buying Php 50,000 worth of an ETF on the PSE, which is P147, and P397.50 when selling. These small differences add up to a lot, so ETFs can be cheaper cost-wise in the long run.


  • Can’t beat the market. Because an ETF is designed to track an index, its aim is not to beat it, but just to match it. So if you were looking for investments to beat the PSE, you’d be better off with actively managed funds that seek to beat the index. You’re well diversified when you buy into an ETF, but remember: diversification limits your losses, but it also limits your gains.
  • Can cost more than other pooled funds. If you like to invest small amounts regularly, like Php 10,000 each month, you’ll get charged for every transaction when you buy into an ETF. If small, regular investment is your strategy, you may be better off with a mutual fund or UITF that doesn’t charge you transaction fees each time, which can reduce your returns.

What options are available to the Filipino wanting to invest in ETFs?

Unfortunately, you don’t have a lot of choice in the Philippine market yet. So far, the only ETF here is the First Metro First Metro Philippine Equity Exchange-Traded Fund (First Metro ETF), an equity index ETF which started in December 2013. Other banks such as BPI and BDO have expressed an interest in launching their own ETFs, but they are still considering tax rules and regulations, as well as market appetites, before they do so.

Are ETFs for you?

The answer really depends on your investment goals and risk tolerance. If you can’t tolerate volatility with your money, equity-based ETFs may not be for you. But if you have an eye on the long-term and can take the risk, consider including ETFs in your investment plan. ETFs are still pretty new to the Philippines, so keep an eye out for more ETF options in the future.

I hope this guide has given you the basics about this new asset class that you can add to your portfolio. But before you jump in, remember this quotation from Warren Buffett: “Never test the depth of river with both feet.” Educate yourself on the risks, and you’ll make the best decisions with your investments.

Always remember to invest according to your investment objectives, time frame, risk tolerance and don’t forget to diversify properly.



Francis Kong’s Standout for Outstanding Performance event

Francis Kong is the undisputed inspirational guru of the country. To a great degree, he has influence me and countless others to be become a better person. I have always looked up to him not only because he is inspiring but because of his no nonsense approach to personal development.

As a participant of his many seminars for many years, attending the first one in 1997, I have been blessed with the wisdom he so imparts generously. Francis is a Ten Outstanding Filipino (TOFIL) awardee in 2014, an award-winning columnist, award-winning radio broadcaster and best-selling author of over 10 books.

On September 9, 2015, Francis will headline another life-changing conference entitled Standout for Outstanding Performance and he will be joined by Chinkee Tan, Karen Davila and his son Bryan Kong.

To learn more about his event and to register, please CLICK HERE. Do not miss this highly recommended event.

StandOut Ad


SEC Alert: Hyper Program International

warning-sign1On May 18, the Philippines Securities and Exchange Commission issued an alert concerning the firm Hyper Program International and its affiliates, warning investors to stay clear. But what are the reasons for the worries surrounding Hyper Program International (HPI)?

It helps to know some background information about the company. The firm began in Quezon City in 2014 as a direct marketing operation selling collagen-based cosmetic products. This includes face masks that claim to revitalize the skin, collagen soap, a drug called Gluta Colla-C and Collagen Coffee.

Its founding statement promised investors that HPI would be “creating business to build people and change life and to provide infinite growth and possibilities to its members.” HPI claims to use a common direct marketing strategy to sell its products. Using social media networks on sites such as Facebook, HPI recruits investors to join its Rewards System and then claims to pay them a bonus due to their customer loyalty.

According to the SEC, this had entailed promising returns of between 35 and 40 percent within 40-45 days. As the SEC also reports, investors in HPI are paid their bonus if they then recruit other investors. Investors are also rewarded, in theory, if they recruit customers to purchase the collagen products marketed by HPI.

However, the Commission warns investors that HPI has not been issued with a securities license, making any investment potentially illegal. The SEC warning notes that the firm may be in breach of Sections 8(8.1) and 12 of the Securities Regulation Code. The penalty for participating in an unlicensed securities operation can be between P50,000 and P5,000,000 – and a 7 year prison term can also result from prosecution.

Unregulated securities scams can result in investors losing all of their capital, which is why the SEC attempt to issue licenses to officially approved firms. Because HPI has been refused a license, anyone thinking about making an investment in the firm would be advised to think twice. It seems likely that the company has an unsound business model that seeks to exploit online investors.

Direct marketing is a common source of employment in the Philippines, with around 4 million people involved in the sector across the archipelago. However, there is sometimes a small difference between a genuine marketing network where all sellers are rewarded for their work, and a pyramid scheme which only enriches a few criminals at the head of the organization.

The SEC clearly suspects that HPI has been acting as a pyramid scheme, where investors are rewarded solely for recruiting others (who pay for the privilege), instead of for their sales activity. That’s why the Philippines SEC issued its strongly worded warning to anyone thinking about making an investment in HPI which, on the surface claims to be a forward-thinking, dynamic sales operation. Anyone still considering investing or offering investment opportunities with this companies has been warned and may face prosecution if they take part.


You can view the warning of the SEC at their website or click HERE


Why Price Comparison Sites are the Future

MasterCard recently released the results of its Financial Literacy Index, a research-based report that examines levels of financial know-howwww photo in the Asia Pacific region. They found that financial literacy actually declined across the region. The Philippines was awarded 66 in the area of Basic Money Management; a score of less than 70 is considered an issue.

Improve Your Financial I.Q.

While some Filipinos understand everyday concepts like budgeting and saving, many are confused by the technicalities of finding the best car insurance or credit card deals. Personal finance comparison sites can fill in those knowledge gaps. They empower buyers to compare and make financial decisions based on their own knowledge – and that knowledge is bolstered by information and help options that can educate them on various concepts.

Saving Time & Money

The rise in popularity of these websites corresponds to the overall rise internet use. It makes sense; what used to take hours or perhaps even days to call various companies and wait to hear back with a quote can now be accomplished in minutes just by using a single price comparison website. And – people aren’t left with that nagging feeling that there was a better deal out there waiting to be had.

Growth in Southeast Asia

While the phenomenon has been noted globally, it’s perhaps in Southeast Asia that both the rise and the potential for financial comparison sites are greatest. The growth of internet use in Southeast Asia has been phenomenal, with 194 million new internet users between 2010 and 2020 between Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.

Internet use is high even among low income citizens of the Philippines, typically in the form of mobile telephony and not via a stand-alone computer. Fully 90 percent of users engage with blogs and social media and internet banking use is roughly on a par with the rest of the world. As they’ve adopted the digital lifestyle, price comparison shopping for everything from dresses in the shopping mall to car insurance has been on the rise too. The market has responded with a flood of price comparison sites and start-ups over the last two years.

Peace of Mind

moneymaxAlong with getting the best price and options, visitors can be assured of the accuracy of the information they’re getting. Growing sites like offer comparison pricing for car insurance and other financial products along with options that explain financial concepts in everyday language. This helps close the gap in financial literacy with price transparency and consumer choice.

Across the globe, financial institutions and even government players are sitting up and taking notice of the enormous rise in the use of these websites. Soon, having to call individual banks and companies to find the best deal will be a practice of the past. Through these websites, Filipinos have quick access to all this information, and become empowered to make choices that are right for them.


5 Simple Ways for OFWs to Invest in the Philippines

ofw-3OFWs are generally the kind of people who leave home because they want to provide for their respective families, others still are looking to broaden their life experiences by working abroad for a time. With their time working abroad comes the idea of eventually putting the money they’ve worked hard for to good use.

Most will find themselves putting that money towards small businesses that their families can run in their stead; others will start a savings account and allow the money they deposit to incur interest. There are other ways to grow one’s hard-earned money, such as investing.

Many people find the idea of investing somewhat daunting – the most common reaction is usually “don’t you have to study the stock market to get anything done?” There is a certain amount of study that comes with investing, but there are a number of accessible investment platforms available to the average OFW, and are usually tailored to one’s Risk Profile.

A Risk Profile basically determines how aggressive someone is when it comes to making an investment, or one’s Risk Appetite. The first thing anyone wanting to start an investment portfolio is to take a client suitability assessment questionnaire, which will allow you to see exactly what kind of investment vehicle best applies.

Of course, the kind of investment vehicle you choose depends on the amount of money you choose to risk, hence the need for one to take the assessment.

There are several ways to start your investment portfolio, and here’s five:

Mutual Funds

By far, investing in a Mutual Fund appears to be the simplest of the options when it comes to investment vehicles. This type of investment takes most of the work out of your hands and places it in the very capable ones of fund managers. Their job will be to grow the money you invested, without you having to monitor it constantly.

Here’s a list of mutual fund investments that you can access online:


Stock Investments

Arguably, investing in publicly traded stocks requires a certain kind of aggression in terms of your risk appetite, and some research. Buyingofw stocks basically means becoming a shareholder in a publicly traded company. Being a shareholder means you own a part of the company, but only so far as much stock that you own in said company. The bigger your stock, the more you can participate, and the more you earn depending on the company’s performance.

Getting started requires opening an account with a broker, and here’s a list of online stock brokers accredited by the Philippine Stock Exchange:

Unit Investment Trust Fund (UITF)

This form of investment involves holding a certain amount of money in trust as part of the investment made. It shares a similar structure to mutual funds in the aspect that your money will be managed by fund managers. This is usually offered by banks, and differs from mutual funds because they revolve per unit investment, as opposed to the shares in a mutual fund.

Here’s a partial list of banks that offer UITFs:

  • Metrobank
  • BDO
  • Union Bank
  • BPI
  • PNB
  • Chinabank
  • Security Bank
  • EastWest Bank


Given the propensity of OFWs to save their money in bank accounts, an investment vehicle that may also be available to them comes in the form of Bonds. This form of investment is generally offered by large corporations and government offices (Retail Treasury Bonds) as a means of raising funds or essentially borrowing from the public. They have a fixed maturity date.

Here’s a few banks that also act as gateways to purchasing Bonds

  • PNB
  • BDO Unibank
  • BPI
  • Metrobank

Real Estate

This type of investment isn’t necessarily unusual, but leans more towards preparing for a future home, or somewhere to put up a business. This form of investment requires a higher amount of money to start with as opposed to say, mutual funds. The money invested into real estate generally means having enough to make the payments to the land that you have purchased, and the lower the interest rate, the better.

What may eventually earn money from investing in real estate is the way land use changes over the years. One can acquire property through the Register of Deeds, but make sure to check the land title for encumbrances (mortgage, debts, and the like).

These are just some of the ways that OFWs can invest in the Philippines. It mostly takes a certain amount of patience and research before you pick your investment gateway.



Mendicancy Culture among Filipinos

Mendicancy Culture among Filipinos – Is it a Bad Thing?

Poverty is one critical problem that the country continues to face. Although figures show that our economy is growing, more and more poorFilipinos still consider themselves poor, and that is not difficult to prove. Roam around the streets of Metro Manila and you will see beggars, children selling goods, unsightly shanties or families living under the bridge. With many Filipinos living below the poverty line and with very few employment or livelihood opportunities, some become desperate and resort to begging. Begging is an obvious form of mendicancy, but it is far from the only one.

What are the other signs that tell we are already developing a culture of mendicancy, and is this ever a good thing?

What is Mendicancy Culture?

Medicancy in itself is defined as “the practice of begging, as for alms”. As it applies to culture, the practice of relying on handouts or the “kindness” of people for money or other forms of help. A culture of mendicancy basically creates people who may always be waiting on handouts; expecting that others with more means will readily assist them, thereby taking away the need or the urgency to make their own way in life.

More Obvious Forms

If you are a Filipino commuter, you may find it common to see individuals riding buses, pretending to be Bible preachers and collecting money afterwards. They pass out white envelops to passengers for donations. Children who jump onto jeepneys cleaning shoes might not be new scenery to you. These street kids quickly clean passengers’ shoes by simply wiping it with a rug, then later ask for money. You may see adults carrying infants, beggars singing or playing instruments, and many others. Filipino tribes coming from different provinces asking for money in the city is also not a usual sight. There are Aetas, Badjaos, Igorots and other groups who would often travel during Christmas season to beg for alms. These are among the most obvious forms of mendicancy, and surely, you can name more when asked.

Less Obvious Forms

It is easy to name the obvious forms of begging we see in the country, but there are less obvious forms we might not even be aware of. Our country gets more than our share of typhoons a year. In fact, an average of 19 typhoons enter the Philippine Area of Responsibility annually. There is no need to ask why, because we can never control the forces of nature. Instead we need to focus on our preparedness and the ability to bounce back after a disaster.

It is a fact that we are one of the most disaster-hit nations, and this also puts us on international news. The result? Many countries offer aid in different forms. It is not a bad thing to receive help, especially if voluntarily given. However, since we lack preparedness and rehabilitation plans after a disaster, foreign countries tend to see us rather helpless and cannot help but offer their help. We, on the other hand, somehow get used to their assistance and expect help every time we are hit by a disaster. Shouldn’t we be improving our plans on how we can avoid as many people to be victims of typhoon or think of ways on how we can build stronger homes?

The number of overseas Filipino workers is constantly increasing. This still has a lot to do with poverty, but what does it have to do with mendicancy? The billions of yearly remittances help the economy, and these remittances are also what OFW families use to afford a more comfortable life. There is danger that the OFWs’ families may become dependent on them, and we can already see this in reality. There is also a tendency for the country to become overly dependent on remittances instead of pursuing better economic development plans.

A culture of mendicancy is obviously a dark phenomenon. It does reflect inability to fight poverty, unwillingness to strive harder in life, and dependency. Every individual, regardless of sex and race, has to have the drive to make him or herself better. We have to continually grow and improve not just in terms of the ability to earn money, but to improve oneself. Filipinos should not always live by others’ generosity. Surely, there are struggles and sufferings, but we must take these as challenges to strive harder in life. We all have to learn about self-fulfillment and dignity. We only have one life to live, so we better make the most of what we can.






Long term savings & inflation


The primary reason we should be investing is because we will not always have the ability to generate income. It is said that during our lifetime, we can generate income in two ways — ‘Man at Work’ or ‘Money at Work.’ When we have properly invested our money, it can begin to work for us.

The word investment is very broad—it can have many meanings and a lot of people have different views on what an investment is. Investments may pertain to many items; some are financial, some are not. For example, a business can be considered as an investment, especially those that are needed to start and operate a business enterprise.

Those that provide income, capital growth or both in the financial context can also be considered as investments. You can also invest in yourself by improving your skills to earn more or go into business. Investments can also be through securities more commonly known as investment instruments, which we will be covering in this chapter.

How you invest will ultimately dictate the quality of your future life. Are you ready to learn what investing is and how you can invest for the future?

WHAT IS AN INVESTMENT? defines investment as “a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin ‘vestis,’ meaning garment, and refers to the act of putting things (money or other claims to resources) into others’ pockets.”

An investment is the commitment of funds made in expectation of some positive rate of return. If the investment is properly undertaken, the return will be in proportion to the risk the investor assumes.


Inflation is the loss of your money’s purchasing power. It is a hurdle every investor must keep in mind. Most, if not all, low risk investments are growing at yields lower than the inflation rate. Money’s real value is not all about the absolute peso value, but rather on its ability to buy goods and services. If the cost of goods and services increases faster than the growth of your low risk investments, you will be at a great disadvantage.

Inflation is what we finance geeks refer to as invisible risk. The common barometer we use to measure inflation is the Consumer Price Index or CPI. However, the CPI does not hold all the items we spend our money on as they only reflect basic commodities. There are many items we spend our money on which is not included in the CPI, and some of those have much higher inflationary effect such as the cost of education. Let’s say CPI today is at 3%, but you have children who go to school where the average increase in tuition fees hovers between 8 to 12%. Your effective personal inflation rate will definitely be higher than CPI’s 3%. While it is cumbersome to compute for your own personal inflation rates, I add 2 to 3% above the reported CPI as a good estimation of my inflation. If CPI today is 3%, my personal inflation then becomes 6% which is a hurdle rate I use for my investments.

The farther you are from inflation, the better it is for your investments.

Learn proper investing at the country’s biggest investment and finance event of the year — iCon 2015. Click HERE for details.