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.

I recently wrote about a blog about what I need to teach my children at the Act Like a Man   blog site. Check out the post here. I was encouraged by the positive response to that blog and how many people found it helpful and enlightening. In essence, I mention 3 things I felt I needed to strongly teach my children about: 1) Making Money 2) Handling Money and 3) Loving God above everyone else.

Today, our family had a milestone in the area where we felt my wife and I needed to empower our younger boys on — that of savings. We have encouraged our boys to keep all the coins they have (mostly from me) and place it in their coin banks. Getting kids to save using coins is the first step and it is a very important step. I hear many parents complain about their kids not seeing the value of money. We believe that for kids (or adults) to see the value of money, they must first value the smallest amounts — coins! My kids have been dutiful in putting their coins in their coin banks and we felt they are ready to do the next step.

So what is the next step? Get them to open their own Savings Accounts! Many parents open accounts for their children but my wife and I felt that the experience of opening accounts themselves will leave a positive imprint. I also found out that BDO’s Junior Savings Program only has a minimum initial deposit of P100 which was really encouraging.

Here’s my son Riggs filling up the forms

Now it’s Chino’s turn to sign his name in the forms

BDO had some give-away for kids opening their accounts. In the 70’s I remember Banco Filipino and BPI would give piggy banks for their kiddie accounts. I would have been more cool if they got piggy banks like we did before eh?

Opening an account themselves is a cool experience. The branch staff were so thrilled seeing young kids pumped up about opening accounts. It was also an opportunity for me to talk to them about the virtues of teaching the next generation on proper money management. The new accounts staff had a difficulty counting all those coins my boys carefully sorted and taped themselves but was very elated to see that kids were experiencing their first real banking transaction.

I also took the opportunity of teaching them on subsequent depositing after they received their first passbooks (no ATM for them yet!). I gave them P100 each and told them they can now add on to their accounts by making a deposit. Their older sisters (they insisted to witness this milestone) were on hand to assist the boys in filling up their deposit slips.

It’s now Riggs turn to make his first deposit over the counter, he had to fall in line just like all of us.

Then it’s Chino’s turn to make his deposit.

A trip to the bank will not really be a complete experience without the waiting and the reading of the newspaper while waiting, haha!

As we left the bank, the Branch Manager gave my boys a good hand shake and welcome them as the bank’s newest depositors.  We wish to thank the very helpful, cheerful and accommodating staff of BDO Pasig-Pioneer Branch. What an experience for all of us!

Train a child in the way he should go and when he is old he will not turn from it. – Proverbs 22:5, NIV

The most exciting and life-changing personal finance event goes to Davao! Steps to Financial Peace 2012 will cap its nation-wide run on June 2 (Saturday) at the Ritz Hotel at the Garden Oases in Davao City from 1 to 6 pm.

This is a high-impact and very practical learning event that will surely get you on the road to financial freedom.

For inquiries, please contact Joseph Doce at jddoce@yahoo.com or (0917) 7146136