Public urged to invest in mutual funds

CEBU, Philippines - The public are encouraged to go beyond settling in savings accounts and invest rather in mutual funds for long-term and higher returns, taking advantage of the vibrant economic performance of the country in the global arena.

This according to Michael Oliver Manuel, managing director for Asia investments of Sun Life Assurance Company of Canada during his talk to clients, partners and fund managers.

Manuel projected a brighter 2013 for the Philippines taking into account the strong economic fundamentals of the country that places itself on top of other neighboring Asian countries.

Evident to such, he cited, are the massive peso liquidity in the system, robust dollar inflows brought into the country from Overseas Filipino Workers and revenues from the business process outsourcing industry, well-anchored inflation, low interest rates, inspiring political leadership, accelerating Gross Domestic Product growth, continued investment flows, sustained fiscal consolidation, low debt to GDP ratio, higher gross international reserves than external debt, investment grade within reach, peso strength and appreciation, and best performing Asian market in the stock industry.

“Despite the global financial crisis that struck in 2008, only one country stood out stronger than other countries. Wherever you go, Philippines continue to shine on. All eyes are on us,” he stated.

He said that Malaysia was listed among the lowest performing markets in the Southeast Asia in 2012 while Vietnam’s bond market is thinner than Philippines’.

Indonesia, on the other hand, continues to battle with current budget deficit due to subsidiary of gas prices.

He added that Hong Kong is known as the shopping center of China could have remained flat without its retail sales.

Unlike the US and European markets, Manuel said that the Philippines offers a strong combination of low interest rates and brewing confidence from consumers and businesses that enables the country’s economy to flourish.

Dollars flowing in the country could be attributed to the OFW remittances that registered more than US$20 billion dollars last year and to the BPO revenues that posted more than US$12 billion in 2012 and are projected to rise to US$20 billion by 2014.

He further noted that foreign participation is also increasing in the stock market, attracting more dollars for the country.

Investments are also seen as the key to potential growth with Manuel citing that in 2011, about 25% of the country’s GDP was accounted by investments.

He added that consumption is also getting more broad-based apart from the usual basic necessities.

The National Statistical and Coordination Board enlisted restaurants and hotels, communication, health, alcoholic beverages and tobacco, and clothing and footwear as those that posted high ratings in real growth household consumption.

Manuel said that such figures and findings could prove that there is no asset bubble in the Philippines, thus encouraging more Filipinos to go beyond the most preferred investment which is the savings account and venture in long-term financial instruments with high returns.

He said that one can start with an initial investment of P5,000 for mutual funds which may vary in money market, government security, bond funds, stocks, balanced funds and equities.

As the head of investments for Sun Life Asia, Manuel oversees the management of the life insurance, asset management and pension fund assets in the company’s wholly-owned operations in Hong Kong, Indonesia, Philippines and joint venture companies in China and India. — (FREEMAN)