It will be interesting to know the outlook of a seasoned investments expert and the Chief Investment Officer of the country’s largest family of funds. With over 3 decades of solid experience managing the largest investment funds in the country, Mr. Marvin Fausto experience all the many cycles of the volatile investment world and not lose his shirt, as the saying goes. Marvin is also a marathon runner where he applies the same discipline as he does in investment management. Marvin Fausto likewise shares our advocacy of empowering Filipinos through financial education.

The 2013 Outlook of Marvin V. Fausto

My view for the year 2013 will likewise be optimistic as in 2012 due to the continued confidence in the present administration as well as the business environment in general. The country’s Gross Domestic Product is expected to be robust with a growth rate higher than historical average and most likely range the 6-7% growth level. With better management of their finances, the Government has greater flexibility in funding developmental programs in infrastructure, tourism, education and social services. This will result in more economic capacity and jobs for the Filipinos. Complemented by the already stable inflows from Oversees remittances and strong revenues from business process outsourcing, domestic consumption spending will accelerate for the coming years. I believe our per capita income could reach more than the $3,000 in the next two years and will bring personal spending at higher levels.

As for the investment markets, there will be less and less opportunity to generate better than historical gains in the fixed income investments as interest rates will remain low and is expected to stay low for most part of the year. Liquidity will be abundant putting more pressure on the Central Bank to siphon out inflation causing excess cash in the system and thus leaving the BSP Special Deposit Accounts very much available to all as the highest yielding deposit instrument in the market.

For equities, the stock market is expected to be more volatile for 2013. Stronger bias due to liquidity and increased potentials for gains on one hand and the relatively high valuations on the other will be the opposing forces that will make stock investments this year more volatile than usual. This year would most likely form the base consolidation and prepare for better returns for the coming years as earnings catch up with stock prices on  more acceptable levels. Investors should be more disciplined in their purchases this year, buying at reasonable discounts to fair valuation as well as having a strict time horizon only for the long term. Having these in mind will generate rewarding returns for investors.

Happy investing in 2013!

Marvin V. Fausto is the Senior Vice President and Chief Investment Officer of thecountry’s largest bank, BDO Universal Bank and in charge of the Investments unit managing approximately P600 Billion under the BDO Trust Banking Group.

Prior to this, he held the position as head of the Trust Banking Group of Equitable PCI Bank from 2002 to 2007 primarily responsible for its overall business and operations. He also held the position of Vice President and Investments Head at Citytrust Banking Corporation. He started his career as an analyst at the former Far East Bank & Trust Co.

After having served as President and director, Mr. Fausto is currently a Board Adviser to the Trust Officers Association of the Philippines, the umbrella organization of the Trust Industry. He was also the Founding President and current Director of the Fund Managers Association of the Philippines.

Sharing with you a recent guesting at ANC’s On The Money. This guesting is a very light and practical discussion on how to deal with post-holiday financial hangover. I really enjoy guesting in this show which is really a show everyone should watch.

It is my pleasure and honor to present the 2013 Outlook of one of the women who moves and shapes the business environment, Ms. Riza Mantaring, CEO of Sun Life Philippines. Riza has successfully lead her company to be the number 1 life insurance company in the Philippines (in total premiums) as of 2011. What I admire most about Ms. Mantaring is not only her dedication to excellence in work and in life but also her zeal in promoting financial education for the Filipinos.

The 2013 Outlook of Riza Mantaring

We expect 2013 to be another strong year for the economy and the industry. While there is some risk from external factors such as the lingering European debt crisis, the continuing US fiscal issues, and a slowdown in China, we feel the Philippines will be relatively insulated as the economy is being driven by strong domestic consumption. Inflation is under control, OFW remittances continue to increase, and the expected increase in government spending, particularly for infrastructure, plus election spending will also help support growth.  And we have a long runway ahead as we have a young population with growing purchasing power – we are in the so-called “demographic sweet spot!”

For the insurance sector, with the very low market penetration and increasing affluence, we expect the strong growth of the past three years to continue. The low interest rates, however, will continue to pose a problem as they make traditional protection products difficult to price attractively. Investment-linked products have become the bread and butter of the industry, but it is important to be able to maintain traditional products as if the market turns for the worse, this could severely impact the industry as we saw in 2008-2009.

For asset management, we expect growth to accelerate given the favorable market conditions, the strong liquidity in the system, and investors searching for better returns on their investments.

RizaMantaring is the President & CEO of the Sun Life Financial group of companies in the Philippines, and a member of its various boards.She started out in Information Technology and took on various roles through her 20+ years at Sun Life before becoming CEO.

Riza is a member of the Sun Life Asia Leadership 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 100^th 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, and became a recipient of the 2011 CEO EXCEL award given by the International Association of Business Communicators.  Riza was recognized for bold and innovative programs and harnessing the power of communication to implement these programs, including the multi-awarded and pioneering “It’s Time!” financial literacy advocacy.

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 has been a board director of the Philippine Life Insurance Association since 2011 and is currently its Treasurer, and served as a board director of the Philippine Federation of Pre-need Companies from 2006-2008.