It is a pleasure to present the outlook of an esteemed colleague and a veteran in the investments industry, Mr. Ricky So. Ricky has extensive experience in the arena of investments which dates back to over two decades. Today, Ricky is an advocate of investment education as he helps make many Filipinos a real investor.

The 2013 Outlook of Ricky So

The year of the snake bodes well for the financial markets as the book says people born in the year of the snake are fortunate with finances. This is the astrology part. I do not mind the source, for as long as it is positive, I tend to believe it.

For the Philippines economy and markets, 2013 will be a great year of milestones as we are likely to achieve the most coveted and once elusive investment grade status from leading global credit ratings companies.  (Never mind, their questionable past during the global crisis of 2008, this time they are doing well with us.)  This milestone will be a catalyst to more positive developments for the Philippines. Foreign direct investments will most likely pour in bigger investments than before perhaps rising more than 100% over the coming years.  Portfolio investment will likely follow suit with a bold outlook of about $10 bln for this year along.  This will pave the way for the equity markets to record new highs towards Q2 to Q3 rising another double digit gains as inflation continues to be tame with interest rates possibly lowers a few basis points more.  I predict the PSEi to reach record levels beyond 6500 but not 7000, somewhere in between.

The continued challenges in US and in Eurozone economies bode well for our BPO sector generating more dollars (my estimate is it growing 15%) and employment as well. I can see the unemployment rate moving another 1% lower from the present rate of about 7%.   Alongside, the perennial winner OFW remittances will provide additional inflow of 1 to 2 billion dollars from 2012’s estimate of $21 bln. The result of which is a stronger peso moving towards P38-39 per greenback towards the end of 2013.

Over-all the PHL economy will be well this year and perhaps over the coming years. It is time to invest in the Philippines and attract more foreign investments and rekindle the local investors both onshore and offshore.

Ricky So’s professional credentials:

• SEC Licensed Commodity Futures & FOREX Solicitor, 1987 to 1996

• SEC Certified Investment Solicitor (CIS), 1997 to present

• Investments Lecturer, Insurance Institute for the Asia and the Pacific (IIAP), 2004-2005

• Lecturer, Investment Company Representative Certification Seminar, 2000 to present

• Founder and Facilitator, PAMI Investment Clubs, 2003 to present

• Alternate Member, Fund Managers Association of the Philippines, 2007 to 2011

• Director, Association of Registered Financial Planners in the Phils., 2008 to 2009

• Registered Financial Planner (RFP®), 2008 to present

• Stock Market & Technical Analysis Lecturer, Global Investor’s Center Phils. Inc., 2009 to present

• Portfolio Management Lecturer, AIM-EXCELL Strategic Inv. Mgt. Program 2009 – present

• Training Faculty, RFP Philippines – July 2011 to present

• SEC Certified Securities Representative Eligible – March 2011

• Lecturer, Managing Equity Portfolio, Chartered Wealth Manager (CWM®), July 2012 to present

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.

To start off our outlook series, it is such an honor to present the views of one person I admire and respect much, Mr. Henry Herrera. 

An actuary by training, Mr. Herrera has become one of the most influential figures in financial services industry. He is one person who truly practices what he preaches and allowed him to retire from the corporate life at a young age of 50, largely because of proper investments throughout the years.

2013 Outlook of Henry Joseph Herrera

2013 will be interesting for the financial markets – the Philippines included. The US and a number of EU nations face strong headwinds on fiscal challenges and rising debts. We may see more nations see the sovereign ratings downgraded as a result of these issues. As such, markets in these countries may experience increased volatility in 2013.

The contagion from developments in these advance nations in the US and EU will surely impact other economies, Philippines not excluded.

However, the Philippines may continue to be in a sweet spot of continued economic growth without the attendant rise in inflation given that the economy is largely domestic consumption driven.

As such, we can expect a continued low interest rate environment. Thus, investors may continue to flock to investments in real estate and stocks. The Philippine peso will likely remain stronger against the US dollar and may end the year below the P40 level.

Mr. Henry Joseph Herrera was the former President and CEO of Sun Life Philippines and a well sought after expert in his field.

Henry joined Sun Life in 1998 and has held a number of senior positions including EVP & Actuary, VP & Actuary, and SLAMC COO.  He was AVP, Actuarial for the Region in 1998.  Prior to his career at Sun Life, Henry was the President and Director of Philippine Asia Life Assurance Corporation.

Henry has over 28 years experience in the life insurance industry. He holds an MBA degree major in finance and a B.S. in Statistics, cum laude, from the University of the Philippines. He is also a Fellow and past president of Actuarial Society of the Philippines and a member of the International Actuarial Association.  He is a past president of the Philippine Life Insurance Association.

Mr. Herrera has recently been appointed as Chairman of the Board of Pru Life U.K.