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Retirement & Estate Planning Seminars in UAE

Aside from the main event, Money Talks UAE on March 20, 2015, I will be conducting Retirement & Estate Planning seminars in Dubai and Abu Dhabi as well.

Retirement Planning 

At the end of the workshop, you will be able to prepare a comprehensive retirement plan that is suited for you and a plan that really works. Find out how you can truly live a life of comfort & learn about the proper investments that is best suited for your needs objectively

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Estate Planning

Learn how to properly transfer your assets in a cost-efficient manner. Estate planning is a good tool to minimize, if not eliminate uncertainties in the proper distribution of your estate. Estate planning will help you have peace of mind that you will indeed leave a lasting legacy

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Retirement Planning, Abu Dhabi – March 13, 2015; 9am to 12noon. Register HERE

Retirement Planning, Dubai – March 14; 2 to 5pm.Register HERE

Estate Planning, Dubai – March 14, 6 to 9pm.Register HERE


You may also send an email to  for inquiries. Limited slots only.

Money Talks UAE on March 20, 2015 HERE


Free finance event in Hong Kong

SONY DSCI will be back in Hong Kong for another personal finance program to be held at the Consular office on March 1, 2015 at 4:30pm. This is the 3rd year I am conducting a program organized by the Philippine Consulate and Smart Pinoy.

This event is for the OFWs based in Hong Kong and FREE of charge. See you in Hong Kong!

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Stocks or Stock Funds?

Philippine-stock-market-board (1)QUESTION: I am ready to start investing and I would like to invest in equities. Is it better to invest in stocks directly or through pooled stock funds like UITF or mutual funds? —Name withheld per request, asked via e-mail

Answer: As a financial and investment planner, we need to subscribe to the principle of suitability. Without sufficient information, it wouldn’t be prudent of me to categorically say one would be better than the other. The answer really depends on you—if you are knowledgeable enough to select your own stocks, size of funds, and if you have enough time for investing.

However, to help you make a more informed decision, let’s discuss the advantages and disadvantages of both types of investing.

On individual stocks

Advantages :

Control—Buying your stocks directly gives you control over what and when to buy or sell.

Residual income—If you buy a stock with a good dividend payout, then you don’t have to watch the price movement anymore. As long as the company is earning and declares dividends, you will get dividends.

Maximized returns—individual stocks that are growing may beat the market and can give you better-than-average returns. Many stocks beat the index last year.

Potentially better returns—with proper selection and assuming that you are very good at selecting market performers, the growth of your own stock portfolio can outperform the stock market index and many stock funds.

Fees—buying your stocks directly from brokers usually means lower fees as fund managers charge a higher investment management fee compared to stock brokers.

Disadvantages :

Time-consuming—before investing, you should spend enough time thoroughly understanding how stock market investing works. You should also accumulate enough knowledge of both fundamental and technical analysis.  Fundamental analysis means you must be able to read and understand financial reports of the companies you would like to invest in, the general condition of the industries and market trends to which these companies belong to, general knowledge of macroeconomics and even the management of the corporations you would like to own shares of, etc. Technical analysis will require you to constantly study charts on price averages, trading volumes and a multitude of technical market theories like Dow theory, Relative Strength Index, Elliott Wave theory and more. While fundamental and technical analysis is not rocket science, it takes considerable time for you to learn them properly. Enrolling in a class like Marvin Germo’s Stock Smarts is a good way to start.

Diversification—all investment professionals will always recommend you to diversify. No amount of study and good performance in the past will guarantee the performance of a particular stock in the future so having several and properly selected stocks is always a prudent thing to do. Unless you have a very big capital for investing, you will be limited to the variety of stocks you can carry in your portfolio.


On stock funds

Advantages :

Professional fund management—this is perhaps the biggest advantage of pooled funds like UITFs and mutual funds. There is a dedicated team of investment experts that looks at investment opportunities and is investing the money according to the investment objectives of the fund. It is common to see CFAs or Certified Financial Analysts leading or being part of these investment teams. Good fund managers are clinical and logical investors and are not easily swayed by emotions as compared to individual investors.

Capital requirements—most of pooled stock funds have low capital entry requirements. One can invest in a fund for as low as P 5,000 to P10,000, with other providers requiring a monthly contribution of as low as P1,000 per month.

Diversification—all stock funds carry well-diversified stocks in their portfolio, usually blue chip or premium stocks. Since these are pooled funds, there are economies of scale in place; fund managers will be able to purchase different shares. Proper diversification will ultimately result in reduced portfolio risk.

Disadvantages :

Fees—While not all stock funds charge the same range of fees, these fees are usually much more than broker fees as there are costs involved in managing funds. Some funds even charges entry and exit fees, which can reduce the returns of your investments. Some funds are being sold through agents and advisors and commissions would need to be paid to them.

Control—you have no say on which funds you want or don’t want in your fund as this is already delegated to the fund managers. You also can’t modify the weight of the stocks inside a stock fund as fund managers follow maximum exposure limits per stock to ensure proper risk management practices. Even if you want more PLDT or Jollibee shares in your portfolio, your fund will only have a limited exposure to said stocks, like 10 percent.

The answer to your question is dependent upon you knowing the pros and cons of individual stock investing or through a pooled equity or stock fund. If you are a new investor, I recommend you invest in a stock fund first and as you get to understand how the stock market works and develop your competency in investing, you may want to start investing in individual stocks. There are no perfect investments and there are many ways to build your wealth, chose a strategy that you will be most comfortable with.

Do not forget, whether investing in stocks by yourself or through a fund, it pays to invest first in investment education.



Money Talks UAE

The biggest finance event for the OFW in the United Arab Emirates will happen this March 20, 2015!

Be part of the learning by attending this life-changing event and learn from the experts who have a heart to help bring financial education to the OFWs!

To register, CLICK HERE or email



My guests for this conference are all advocates for financial literacy and have extensive training & experience in finance and investing.

Allan Miranda – Allan is the most recognizable OFW in UAE when it comes to financial literacy. He has been conducting successful seminars in Dubai and Abu Dhabi for a few years now and he is seen as the champion of the OFWs when it comes to financial enablement. He is based in Dubai, UAE.

Burn Gutierrez – Burn is the founder and main driving force behind the hugely successful OFW Usapang Piso forum and the Angat Pilipinas Coalition. Due to his efforts, thousands of OFWs are becoming financially abled through his extensive work using the internet and now even live events in many parts of the world. Burn’s team is composed of many volunteers and leaders and virtually every city in the world where there are many OFW’s. He is based in Al Khobar, Saudi Arabia.

Bernard Anduyon – Bernard Anduyon was the immediate past President of the Overseas Filipino Investing & Entrepreneurship Movement, a group that is almost single handedly transforming the financial lives of the OFWs in Qatar. Doha has a high concentration of financially abled OFWs because of the efforts of Bernard and his movement. His group has been deputized by the Philippine embassy in Qatar to provide financial education to the OFWs in that region. He is based in Doha, Qatar.

Jess Uy – Jess is known as the international investing expert and has been active in investment education and financial planning amongst many OFWs. He has successfully conducted seminars in many countries like Japan, Brunei, Dubai, Qatar, Hong Kong and Singapore. Jess is based in Singapore.

Don’t miss this!


2015 Outlook, part 12

Years of steady structural reforms under 4 Presidents, improved demographics, technology shifts and many other factors have been factors behind the Philippine growth story. I would like to personally thank the BSP for being a strong institution that has made all this growth a reality.

As I close this 2015 Outlook series, I believe that the best way to do so is to feature the views of one of my favorite economic icons in the country, BSP Deputy Governor Diwa Guinigundo. How I wish more and more people can learn from him which will not only give you wisdom, it will help you with your faith.


The 2015 Outlook of BSP Deputy Governor Diwa Guinigundo

I continue to see the Philippine economy performing in accordance to its higher potential capacity. Four factors support this trend that many people may not be exactly aware.

One, with sustained technology application, total factor productivity has improved over the years. Two, economic efficiency has gained more traction. Three, labor market dynamics have been favorable with more educated, more trained graduates joining the labor pool. And finally, demographic factor has been supportive with more young people keeping the dependency ratio relatively low.

What drove these growth-positive factors have been the twenty years of steady policy and structural reforms. These are BSP-buildingclearly a demonstration that the Philippine Government has attained a good sense of governance. Four presidencies have continued with building institutions. If nations fail because of bad institutions, one can therefore argue that the Philippines has achieved strong resiliency because it has been heavily engaged in institution building even through the Global Financial Crisis in 2007-2009.

It should not therefore be surprising if I will uphold the government target of 7-8 percent economic growth in 2015 and 2016. I see more diversified sources of growth: more investment and public spending supporting private consumption, manufacturing, construction and agriculture contributing to the growth process complimentary to services. That growth range has been achieved at some point in the past, I don’t see any reason why that should be elusive in the future. What we need to see is more infrastructure and infrastructure.

With investment grade continuing to go up, both domestic and foreign investment should remain bullish about the Philippines. Infrastructure including power should remain the focus of these investments.

With good supply prospects and pro-active monetary policy, helped by the decline in oil and other commodity prices, I see inflation averaging at a rate comfortably within the lower target range of 2-4 percent for both 2015 and 2016. The BSP and the national government have good monetary and fiscal space, respectively, to continue promoting price stability and good public finance.

On the external front, I see our initial forecast of sustained external payments surplus continuing to be broadly appropriate. The balance of payments should be able to bounce back strongly from a shortfall in 2014 to a surplus in both 2015 and 2015, with the current account expected to show increasing positive position of at least $6.0 billion.

These are premised on one, recovery in the global economy but at an uneven pace. This dimension is important because unevenness should lead to divergent monetary policies. US is turning the corner so I expect it to start preparing the stage for some tightening which could result in some capital outflows in the Philippines. Europe and Japan remain soft so monetary policy is needed to be accommodative which could drive some capital to flow to emerging markets including the Philippines. China and India are the other difficult challenges with structural issues threatening to pull them down so we should see a generalized easing among many central banks. All told, the asynchronous policies could pull each other apart and generate some volatilities in the global and regional financial markets. The Philippines should be very vigilant in monitoring these developments and should be prepared to act decisively as necessary.

I also expect to see our strong and stable banking system continuing to provide additional resiliency to the economy. Financial intermediation is expected to remain supportive of economic growth. With key reforms in place and expected to be pursued, market confidence should remain strong and this is something that does not come by easily.

There would always be some risks even at the tail end. This is the reason why the BSP is always doing stress tests and scenario building exercises to ensure we are not surprised by external shocks. This is the reason why we have a stable of early warning systems on the key sectors of the economy including the business cycle.

So paraphrasing Einstein, let me say that what is incomprehensible about the economy is that it is comprehensible.


diwa guinigundoMr. Guinigundo is the deputy governor of the Bangko Sentral ng Pilipinas in charge of monetary policy and operations, international relations and operations, currency management and regional monetary affairs. He was the Philippines’ representative at the IMF, Washington, DC as alternate executive director. Previously, he was head of research at the Southeast Asian Central Banks Research and Training Center in Kuala Lumpur. At present, he chairs the SEACEN Experts Group on Capital Flows and a member of the SEACEN Executive Committee. He sits at the NEDA Board, National Food Authority Council and National Home Mortgage Finance Corporation Board.

Outside government, Mr Guinigundo is the senior pastor of a local Christian church, Fullness of Christ International Ministries, and advises the BSP Christian Fellowship. He leads in the nationwide Touching Heaven Changing Earth which aims to unite the body of Christ in the Philippines.


2015 Outlook, part 11

40 years ago, the Philippines grows below the 3% range… we have gone a long way since then and we are no longer the ‘sick man of Asia’. What are the macroeconomic concerns we should address to ensure sustainability of our growth? Can we survive international economic shocks? Are we a viable international investment destination?

I am proud to present the views of my mentor in economics and a highly respected and admired economist, Dr, Alvin P. Ang, PhD.


The 2015 Outlook of Dr. Alvin Ang

2014 saw a natural experiment in terms of Philippine economic growth. It showed that if government and agriculture will not contribute to the economy, what will be the growth of the Philippines? It proved our expectations that the Philippines is already in a higher growth path. We are now growing at above 5.5% at base case. This is far higher than the below 3% growth we have experienced in the last 40 years. This alone is good news for all of us! It validates that the Philippines is now in a new league far from the sick man of Asia tag we had in the past.

economic-growth-4Let us just look at what happened to the economy after the major Swiss Shock weeks ago. We find that instead of being pulled down, the peso held on at current levels and the stock market even breach new highs. What is happening is that there is a whole new view about the Philippine economy. We are being looked as an alternative investment destination because of our unique qualities not found in other emerging market economy. These distinct advantages that may help cushion and compensate for any ripples and shocks. Let me summarize them as follows: a) the Investment Upgrade. At present we have yet to benefit fully from this as our FDI has remained low compared to our ASEAN neighbors. However, slowly we are seeing additions. FDI most likely reached USD 6Bn in 2014 and at base scenario would remain the same. B) OFW remittances and BPO. Supporting FDI for inflows will be the remittances and BPO contribution. While remittances are reaching growth maturities of about 4 to 6% growth per year, the BPO sector is strongly testing 2/3 of total remittances. All of these combined will already add a steady stream of close to USD 50 Bn per year. During the 2009 crisis, we were shielded mainly by the wide distribution of OFWs around the world compensating for the weakness in Taiwan and the Middle East. Hence, the economy held on despite massive shocks. This time, the Philippines is in a better position structurally because of the stronger underlying and the contributions of the Investment Grade status and the BPOs.

Furthermore monetary policy has been prudent with liquidity growth back to single digit levels and the loan growth at 20%. What is more encouraging is that loans to production have diversified to more sectors than before assuring a more balanced production growth. With these conditions, it is very likely that local interest rates will be hovering lower than their current levels. This is more so because we see inflation to weakening to even below 2% at best scenario. Best scenario assumes that the current oil price levels continue to weaken by ½% per month and that the port congestion is responded at a much faster rate than current. As regards the peso-dollar rate, the short term will see volatilities, but the general direction is that of a weakening considering that the US economy has been rebounding at a sustained pace. This will most likely lead to a tightening of US interest rates within the year. A higher US interest rates may attract funds back to the US. But this is a question of flight to quality. The Philippines is no longer a junk grade economy so it will not necessarily lead to a lot of funds moving out. Besides, the strong compensatory effect of the unique feature of our economy will ensure that any depreciation will be mild and will be helpful to make our exports competitive – this will be a movement between 1% to 2.5%.

As regards equities, 2014 saw a banner year with the PSEi hitting more than 20% return. The concern is that if the earnings will remain at their current levels, we will be expensive compared with our neighbours. For the last 3 years (2011-2014), the Philippines was the 13th best performing equities market in the world. There is still room to go up considering that current PE levels of 20% is well within the 20 year average. Hence, we see the PSEi moving up by 5% at base scenario to 7,600 and a maximum of 10% at 8,000.


Alvin Ang is presently Senior Fellow of Eagle Watch, Economic Forecasting Unit of Ateneo de Manila University and Alvin-Ang_NEWProfessor of Economics at the same university.  He was the 2013 President of the Philippine Economic Society and was previously Professor and Director of Social Research at University of Santo Tomas.  He advocates personal finance as one of the key missing links to address serious inequalities in the country.


2015 Outlook, part 10

One of the big reasons why the Philippine economy remains to be in a positive track is because of the enormous remittances that our OFW heroes are sending home month after month. In 2014, the remittances exceeded $25 Billion and we are not expecting that to slow down anytime soon. 

For this installation of the 2015 Outlook, I am featuring the views of an OFW himself, Burn Gutierrez. Burn is one of the driving force behind the increasing financial literacy of the OFW’s through his vast network of OFW’s world-wide. He is the founder of the OFW Usapang Piso, an on-line group that has over 33,000 members world-wide. An accountant by profession, he envisions seeing the OFW as financially enabled in the near future. 


The 2015 Outlook of OFW Usapang Piso’s Burn Gutierrez

The year 2014 has been a year of new opportunities and challenges for OFWs especially in the Middle East. In Saudi Arabia, we saw thousands of undocumented OFWs or those whose visa sponsorships has either expired and have not been renewed by their respective employers repatriated to the Philippines.

ofwThere have also been a significant decrease in the number of OFWs in Saudi Arabia while more Filipinos have emigrated to Canada or the USA according to the statistics provided by the Commission on Filipinos Overseas. This could mean that many OFWs still view North America as the ultimate continent to immigrate to. I believe this migration trend will still continue this year.

Interestingly, BSP’s recent survey revealed that more Filipinos abroad and their families back home are allocating their remittances for savings and investments. The survey showed that OFW’s families savings increased to 42.1% in the last quarter of 2014 from the 39.7% in the previous quarter. Funds for investments also increased from 6.3% to 6.8%.

I would like to note and give credit to this development to a handful of financial literacy advocates and investment personalities who are gaining popularity on Filipino households abroad because of their exposure in Philippine TV shows streamed abroad by GMA PinoyTV, The Filipino Channel, and AksyonTV.

Another venue that will continue to aid the learning journey of OFW’s is the social media, especially the growing number of Facebook groups and pages that aim to educate Filipinos about paying consumer debts, saving for emergencies, insuring themselves, and investing in paper assets in addition to promoting traditional entrepreneurship. More OFW’s are starting to get information about affordable investing through the these social media groups and non-profit organizations online.

While this development do sound favorable, throngs of fraud schemes and online scams will still go after the hard-earned money of many OFW’s and their dependents this year. In the same manner, the combined vigilant effort of government agencies and non-profit organizations will help in identifying and fighting these scams.

The year 2015 will be a great year for many Filipinos to start their own businesses in the Philippines. Our OFW’s will realize this urgency considering the continuous falling of oil prices that may affect their current work overseas, most especially those who are working in the Middle East and the Americas. OFW’s should have this alternative plan while they still have their contract live in their respective countries of work.


Burn Gutierrez is an accountant and auditor based in Al Khobar in the Kingdom of Saudi Arabia. He is the founder bygprofof the OFW Usapang Piso Facebook group and the Angat Pilipinas Coalition. Through his efforts, OFWs all over the world are becoming financially aware. His extensive experience in the auditing and finance has equipped him to help the plight of the OFW’s achieve financial freedom. 


2015 Outlook, part 9

Interest rates, heightened geopolitical risks, global growth and many other factors will have an effect on 2015 and yet, Riza Mantaring, the CEO of the country’s number 1 life insurance company (Sun Life) feels that Philippine outlook is still positive. Ms. Mantaring’s company has been in the forefront of getting Filipinos financially abled and she views that there is still a lot to be done.


The 2015 Outlook of Riza Mantaring

Giving an outlook for the year almost seems like a shot in the dark given how wrong most people were last year — equities market expected to be slow in anticipation of higher interest rates and a global slowdown, but the PSEi ended the year up 22.8% and close to its all-time high; US interest rates expected to be up with the end of quantitative easing, but ended the year much lower; Philippine treasuries expected to move past 5% but ended at 4.5%; oil prices hit an all-time high mid-year at $107/barrel but ended at $53, a price not seen in years.

Again, this year, interest rates are expected to move up, and heightened geopolitical risks and global growth dragged by Europe and China may cause some volatility, but for the Philippines, our outlook is quite positive. Abundant liquidity, lower oil prices, and a slightly weaker currency will all contribute to strong domestic consumption. Aside from this, anticipation of election spending and increased government spending on infrastructure and public works can all contribute to higher GDP.



rizaRiza is a member of the Sun Life Asia Executive Team. She has also participated in various international special projects and teams such as the task force for worldwide restructuring of the company, the task force for business processes, and special teams for Mergers & Acquisitions.

In 2010, on the occasion of the 100th anniversary of the University of the Philippines College of Engineering, she was selected one of the 100 Most Outstanding Alumni of the past century. In 2011, she was named by Moneysense Magazine one of the 12 Most Influential in Personal Finance. She is also a recipient of the 2011 CEO EXCEL award given by the International Association of Business Communicators. Riza was recognized for bold and innovative programs anchored on a five year strategy, “Route 5”, and harnessing the power of communication to implement these programs, including the multi-awarded and pioneering “It’s Time!” financial literacy advocacy. The strategies and programs put in place have resulted in unprecedented growth for Sun Life in sales, assets under management, and provincial presence.

In February 2011, the company announced the acquisition of 49% of Grepalife Financial Inc, creating Sun Life Grepa Financial and opening up the bancassurance channel for Sun Life.

Riza graduated with a B.S. Electrical Engineering degree (cum laude) from the University of the Philippines, and an M.S. Computer Science from the State University of New York at Albany. She has also attended numerous executive development programs conducted by Harvard University, The Wharton School, Duke University, Oxford University, Asian Institute of Management, and The Niagara Institute. She is a Fellow of the Life Management Institute (with distinction).

She was a board director of the Philippine Life Insurance Association from 2011-2013, serving as Secretary in 2012 then Treasurer in 2013. She served as a board director of the Philippine Federation of Pre-need Companies from 2006-2008.

Riza also serves as an independent director of Ayala Land Inc., the country’s largest real estate firm, and Microventures Foundation Inc., which runs the Hapinoy social entrepreneurship program.










2015 Outlook, part 8

There has been a rise in the interest of Filipinos with regard to stock market investing. Financial advisers often recommend stocks to be in one’s portfolio and for a good reason, it has given the investor good returns for sometime now. However, stocks are also one of the most volatile investments and many have ‘lost their shirt’ in the stock market, so to speak.

Are we seeing a continued bull run in the Philippine Stock Market for 2015? Marvin Germo, one of the country’s most popular stock market enthusiast shares his views on where the market is heading for 2015.


The 2015 Outlook of Marvin Germo

I love watching basketball. I love the part where the underdog, who has been trailing massively in the first 3 quarters start to turn things around and shift things toward their favor. I just love seeing that sight, to see people who have been battered and forgotten move forward and shift from losing to wining.

I believe that this is what is happening in the Philippines. I believe we are surging like never before. The economy may not be perfect and there are things that I think still need to be changed. But like the basketball team I know we are moving up instead of falling down. All the cards are stacking right towards our favor.

What has changed?

1. Our GDP is still strong, relatively higher than most of our peers in region and also as compared to its historic average. The economy was flying prior to Yolanda but it slowed down a bit in 2014 due to its effects of the typhoon. But I believe this year our economy would pick up further. Our GDP is still and will be consumption driven, this means that as more Filipinos spend our economy would grow as a whole.

2. Two years ago we moved from speculative to investment grade but not just that over the past few months we have proven that we can go higher than that as evidenced by more and more upgrades.

3. Inflation is still low, as oil prices continue to drop worldwide, I believe this would further slow down inflation in the country.

4. Interest rates are also low, this means more people are taking loans. More loans allow other sectors in the country to grow. In spite of more people taking loans our Non Performing Loans ratio is still relatively low, this means that people are paying their loans and not defaulting on them. As interest rates are low, this also means more liquidity in the market. It shows that more people would be taking more risks to get more gains. This is good for people involved in stocks and equity funds.

5. We are the top 23rd in the world in gold reserves and top 25th in US dollar reserves beating other 1st world countries.

6. Our unemployment rate is relatively lower, meaning more jobs are being created for our countrymen but aside from that we are seeing also more OFW remittances that help energize our consumption driven economy.

7. More money is also heading the government’s way as they are now able to collect taxes more effectively, which in theory can be used to further our economy.

8. Aside from this our debt to GDP ratio also has continued to drop.

I could go on and on about how things are doing well for our country. However as what I mentioned it is not a perfect economy and certain adjustments need to be made.

What needs Improvement?

1. I believe the government still needs to increase spending and infrastructure spending needs to be a priority. More infrastructures built would bolster business, tourism, and make growth inclusive to everyone.

2. We also need to see more foreign direct investments that will create real jobs and not just money flowing in and out of the stock market.

How does this fit our investments?

Given that interest rates are still low and there is so much money moving around. I believe equities would still take the helm this year. If you are an investor try to align your investments with anything that is related to stocks. Either via direct stock investing or via an equity fund.

Will the PSEI hit 8,000?

I believe no one has a crystal ball to determine where the market will go. Stocks over the short term still move with respect to sentiment and supply & demand. However, given the fact that the fundamentals of the Philippines remain to be amazing, I believe its not a question if the PSEI will hit 8,000 but rather a question of when.

Also as an investor, you should ask your self the question, should the market hit 8,000, would you be buying, holding, or selling? The technique to earning in the market is by having your own strategy and sticking to it.

If you who want to maximize the growth of our economy, I suggest to invest in stocks that are consumer related (Read: Stocks and our Consumption Driven Economy) or if you are entrepreneurial create businesses that will cater to consumption. At the end of the day as more Filipinos spend businesses aligned to consumption will produce more earnings. In stocks, stock prices follow earnings that move up.

Is our market relatively higher?

Yes it is. The PSEI is more expensive compared to other foreign markets in the region. This means that more investors may be more cautious to come in and may wait for the market to go a bit lower before they start investing.

As our market is relatively higher and for those who are a bit more conservative, you may still go for stocks. However, go for stocks that give higher dividends and are less volatile. This is so if the market would correct you still get your dividends and you don’t get hit much by the volatility.


On a technical analysis level the market is still in a good uptrend from its reversal in 2009. The 200 day moving average support (as of this writing) is at 6,960. As long as we stay above the 200 day moving average I believe the market can still push up further, however if this breaks downward, you may consider taking profits.


While as of this writing, the peak of 7,400 has been broken twice this year. What I would like to see is that the PSEI stays above 7,400 and builds a support there. If 7,400 holds, over the short term we may see the market move towards 7,600 then eventually 7,800. After that the road to 8,000 doesn’t seem so far off.

Will the market move up on a straight line up? Not necessarily! As always markets drop, when majority of investors take profits. You may also want to consider that the PSEI has been more than 27% up since the start of 2014 and a lot of investors are also waiting for a proper time to take profits.

At the end of the day, it is you as an investor who will make the decision on what to do and how to trade your portfolio. If you are a trader stick to your technical analysis and your trading plan. If you are an investor buy reasonably priced stocks that are cheap, growing and stick your fundamental analysis.

If you are investing in equity funds, either via UITFs or Mutual Funds stick to your financial plan. Don’t just take out funds because of emotion and just because the market is super high or low. Stick to your fund knowing that your fund manager knows what they are doing and that’s the reason why you are invested with them in the first place. Only take money out when your plan or goal has been hit.

At the end of the day I believe 2015 will be a great year for you as an investor. The Philippine economy which used to be an underdog is reversing, moving forward and surging higher. It’s time to be invested and to take part of the progress. God has great plans for you to prosper and to succeed in life. It’s time for you to step into them!

Have a great 2015 ahead!


marvin germoMarvin Germo is an engineer by education and a Registered Financial Planner. He is one of the country’s most prolific stock market enthusiast and an advocate of stock market education. He is the author of two best selling books  (Stock Smarts) on the stock market, a columnist for Business Mirror and Rappler and speaks locally and globally.


2015 Outlook, part 7

In this installation of the 2015 Outlook series, my friend James Lago of the PCCCI once again gives us his highly valuable views on many factors that will affect 2015 — Economic growth, stock market, US dollars, interest rates, liquidity and more. His outlook will be very helpful as to those who are taking a closer look at their portfolios.


The 2015 Outlook of James Lago

Economy – For 2015, our initial GDP growth forecast range is 6.0% – 6.6%. This baseline assumption is premised on the following growth rates of the major industry groups: industry growing by another 6.5%, services expanding by 6.0% and agriculture posting a 2.5% growth. On the expenditures side, we firmly believe that the substantial decline
in energy prices will translate to increased disposable income which in turn will translate to household spending (HFCE) projected to rise by 5.5% – 6.0%.

The major dividend from lower energy prices is lower inflation. Factoring in our anticipated peso-dollar exchange rate this year, our initial average inflation forecast for the year ranges from 2.1% – 2.5% using the 2006 base year.

PSEi – The bullish trend since its recovery in 2009 remains intact. A fresh historic high of 7,413.62 was achieved as the bull market completed its 6th consecutive year last year.

2015 starts with the leading and trailing relative valuations above its historical averages, as well as the regional average again. The lower energy price benefits will certainly be this year’s major driver. Investors are optimistic that the Philippine economy could post a 6.0% GDP growth rate, at least, for this year. Corporate
earnings will most certainly improve as a result of margin improvement and higher volume sales. Our base case scenario for the PSEi this year is a rise to 7,500 – 7,800. Healthy corrections in between is expected and we see the supports at 6,800 and 6,650.

Peso – US dollar – For this year, with the dollar index firmly above the key level of 90, and as funds flow back into USpeso-dollar dollar assets, we see the peso probably depreciating to 46.00 or even 47.00. It will result in a 61.8% to 66.0% retracement of its October 2008 – January 2013 appreciation. On the appreciation side, an appreciation to 44.50 or even 44.00 cannot be discounted within the year as the country will continue to attract both FDI and portfolio inflows given its continued growth prospects and its investment grade rating.

Domestic Fixed Income Yields – Real returns on the short-term yields remained negative anew in 2014 despite the sell-off in the latter part of the year. The year ended again with a normal yield curve whose steepness was reduced as the spread between the average short and long-term yields narrowed sharply to 160.30 bps, way below its 250 – 300 bps range.

Excess liquidity and portfolio flows into peso-denominated fixed income securities will most likely keep the continued rise of domestic yields gradual overall. The negative real returns on short-term yields in 2014 might not be absurd compared to the past few years. The flattening of the country’s yield curve, a historical first, is a possible scenario. The spread between the average short-term and long-term yields will most likely move within a 200 – 250 bps range within the year as investors will continue to find ways around the yield levels. The yield curve is also seen to remain essentially normal in 2015 with yields in between 2009 and 2012 yield levels.

Portfolio Strategy – Our overall core equity strategy for this year continues to be anchored on the soundness of a firm’s core business model and its stock’s key relative valuations, PER and PBV, trading at a discount to the PSEi’s averages. Cognizant of the benefits of lower energy prices on consumption spending and the fact that consumer-related or proxy stocks’ relative valuation are trading at a premium to the market’s averages, we chose only those whose premiums are reasonable enough to give investors a better upside potential. As a whole, lower energy prices will be beneficial to most firms by way of improved margins and increased volume sales. Several of the stocks in our short list also have attractive, above market average dividend yields.

Given the potential of a near flattening of the country’s yield curve, driven by the normalization of short-term yields and the low inflation scenario, corporates are seen to continue taking advantage of still affordable medium to long-term yields. We continue to encourage investors to take a serious look at the existing PSE-listed preferred
shares and possible new offerings in 2015 as the yields will remain attractive. For fixed income securities, investors will have to be opportunistic again, taking advantage to purchase, when yields touch attractive levels within the year. It is still best to diversify the fixed income portfolio across various tenors to optimize the portfolio yield. The suggested average tenor or duration of the portfolio must be within the short to middle-tenor ranges as yields on the long dated instruments are not attractive for now.


JFL_2011Joseph James Lago is the Head of the PCCI Securities Brokers Corp. He has over 2 decades of experience in the investments industry in various capacities. He is also a professor of the De La Salle University Graduate School teaching in Management and Economics. He is a much sought after researcher, economist and analysts. He is a Registered Financial Panner.