Now that the Election is over, now what?


I’m very fortunate to attend a recent talk given by Dr. Alvin Ang, Ph.D., a faculty member of Economics Department of the Ateneo de Manila University. It was in a PAMI event entitled, 2016 Mid-Year Economic Outlook, where Dr. Ang shared his views on the Philippine economy.

Philam Asset Management, Inc. or PAMI, is the company, where I got my license to sell mutual funds in the Philippines.

Here are some of the takeaways from Dr. Ang’s talk and my views (in italics) as well:

1. Average GDP under PNoy is 6.3%. 2016 GDP Forecast is 6.5%.

Mine: GDP is used to gauge the health of a country’s economy (Investopedia). It includes everything produced by all the peoples and companies that are in the country. 

2. Unemployment is rate is at its lowest in 2 decades – 5.8%. Translation: 40M employed vs. 2.5M unemployed.

Mine: A healthy economy could mean low unemployment and wage increases which drives consumption, our primary economic booster. 

3. Inflation rate is hitting all time lows – below 5%. 2016 Inflation rate at 1.6%.

Mine:  Beating inflation these days is easier given the average inflation rate under PNoy so find an investment instrument that can potentially give a yield higher than 2%.

4. Credit Rating – how well a country can pay off its debts. Investment Grade – all positive under the PNoy. Attracts Foreign Investments.

Mine: More Foreign Investments would mean more BPOs. More BPOs would mean employment and thus would demand more office spaces. Real estate benefits from this development.

5. Stock Market grew 16% under PNoy. Stock Market to end at P7,200 (forecast)

Mine:  Had you invested in the year PNoy won (2010), your money would have earned a modest 16% overall despite the market volatility. 

6. Huge amount parked in Banks. As of end-2015, banks’ total deposits hit P7.3 Trillion.

Mine: Savings account earn up to .50% (less than 1%). Time deposits earn up to 1.75% (subj. to deposit requirements). 

Sadly, in spite of the economic growth, a lot of Filipinos do not participate in inclusive economic growth.

In a survey that was presented on the Desired life of Filipinos, you can see clearly in the findings below that there is a need to participate in “investing for their future and insuring themselves”, which are also key contributors to the economy:

1. Enough for day-to-day needs (61%)

2. With savings for unexpected expenses (28%)

3. With unexpected expenses due to sudden illness, natural hazards and man-made calamities.

4. Savings to buy car, build house, support retirement.

So, what now? It’s high time that you participate in 2 Financial Instruments:

1. Investments – There are many investment instruments that can earn more than savings accounts or time deposits. Make your money work harder for you by investing in mutual funds or unit-linked investment instruments. You can use the gains later to help you a. buy your dream car; b. build your homes; or c. add to your retirement fund.

2. Insurance – prepare for the unexpected events so that your hard-earned money will not be touched and be used for their original purposes (through savings and investments).

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Ronnie Reyes is a Financial Advisor in the areas of Insurance and Investment. He may be reached at or through his mobile: 0917-796-2530.


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