Jerissa Joy C.

Taong

March 17, 2023

MBA 111 – Investment Management

Investment opportunities should Investor Venture into in the Philippines

Investing allows you to make money work for you rather than the other way around through the
power of compounding interest. But with so many options for the best investments in the Philippines,
you’re left wondering where to put your money and what your investment portfolio should look like. In
an interview with Moneymax, Marvin Fausto, founding President of the Fund Managers Association of
the Philippines (FMAP), advised to “invest with a purpose.”

So, whether you’re building your retirement fund, saving up for your child’s education, or
funding any financial goal, here are some of the best investments in the Philippines with great earning
potential in 2023 and beyond.

o Best Investments in the Philippines for Short-Term Goals

 Time Deposit
Time deposits are among the top investments in the Philippines for people who are
afraid of risks yet want to earn higher interest than a traditional savings account. Most savings
accounts have interest rates of less than 1%, while time deposits earn up to more than 4%.

 Money Market Funds

This a good investment in the Philippines in 2023 for newbie and conservative investors
who want to earn a little higher than time deposits. Money market funds are the best short-
term investments for capital preservation in one year or less. They're invested in corporate
bonds, government treasury bills, and other risk-free, short-term securities.

 Short-Term Corporate Bond Funds

Corporate bonds are generally safe, considering these are issued by corporations with
high prospects of revenue or profitability. Bond funds are a collection of corporate bonds from
different companies under various industries and pay interest, usually monthly. However, short-
term corporate bond funds are not insured, so you can still lose money. Still, the diversified
investment nature of the bond funds makes them a safe and good investment in the Philippines.

 High Yield Savings Accounts

If you want to set aside your money for a while, then open a high-yield savings account
and allow it to earn while it sits in the bank. It will help you safekeep your money and avoid
unplanned purchases while earning up to 4% interest per annum. A high-yield savings account is
perfect for conservative investors who can do with little profit in exchange for the lowest
investment risk possible.

 GInvest
GInvest[1] is an investment platform accessible to all GCash users who wish to invest
with GCash partners. ATRAM Trust Corporation is a GInvest partner that manages performing
 funds in the country. GInvest doesn’t impose charges whenever you invest in ATRAM. However,
ATRAM charges annual trust fees for each investment fund.

 Certificate of Deposits
Certificates of Deposits (CDs) are a form of time deposit that let you hold the money in
your account for a specific period ranging from weeks to years. You can open a CD account and
choose your preferred maturity. The longer your money stays with the bank, the higher yields
you can earn. Upon reaching your CDs’ maturity, the bank will release your money along with
the interest earned. Although CDs are less liquid compared to savings accounts and other bank
investments, these are considered safe because CDs are insured by the PDIC.

o Best Investments in the Philippines for Medium-Term Goals

 Balanced Funds
Balanced funds are composed of both conservative (bonds) and high-risk (stocks)
holdings. They’re the best investments for conservative and moderately aggressive investors
who are willing to keep their money invested for three to five years.

 Equity UITFs
For the more aggressive medium-term investors, equity UITFs (unit investment trust
funds) are the best investments to make. Equity-based funds are made up of 100% stocks,
making them high-risk yet high-yield investments in the Philippines. Investing in equity UITFs is
different from investing directly in the stock market. When you invest in stocks, you buy stocks
individually at the Philippine Stock Exchange and create your investment portfolio on your own.
But when you invest in equity UITFS in the Philippines, fund managers are the ones who manage
your pool of stocks.

 Pag-IBIG MP2
The Pag-IBIG Modified Pag-IBIG II (MP2) is a voluntary government savings program that
allows Pag-IBIG members to invest for as low as ₱500 every month over a five-year period. What
makes the Pag-IBIG MP2 one of the best investments in the Philippines for medium-term
financial goals is its historically higher dividend rates than other instruments in the market. The
latest MP2 dividend rate for 2021 is 6% per annum. Through the years, this fund growth has
been on an upward trend.

o Best Investments in the Philippines 2022 for Long-Term Goals

 Stocks
When you join the stock market in the Philippines, you buy stocks of a publicly listed
corporation and become one of its part-owners or shareholders. You’ll need only at least ₱5,000
to open a stock trading account. Investing in stocks yields high earnings when you purchase
stocks at a low market price and then sell them later at a higher price. The stock market allows
you to reap a larger return on investment than short-term and medium-term instruments, such
as bonds and UITFs. However, stock market prices tend to rise and fall rapidly. If the market
price goes down, you’ll lose funds. Investing in the stock market is ideal for your long-term goals
because an investing horizon of more than 10 years greatly minimizes your risks from market
 crashes, which can take years to recover from. You can limit risk by putting your money in
different stocks and allocating only a portion of your income to stock investing.

 Real Estate
Real estate is also among the best investments for your long-term goals—but approach
this with caution. Unless you’re rolling in cash, you’ll end up taking out a housing loan that can
last well above 10 years. In addition, the real estate market follows an up-and-down cycle. The
uptrend is when people are buying properties left and right, and a downtrend is when people
sell, driving prices down. If you buy during the peak of an uptrend and sell during a downtrend,
you can either break even or lose money. Just like investing in the stock market for the long
term, buy-and-hold property investing allows you to minimize your risks. Aside from a buy-and-
hold strategy, you can put your investment to work by renting your property out on online
marketplaces such as Airbnb.

 Long-Term Bonds
These are securities that usually come with a 20 to 30-year term. They can be in the
form of corporate bonds, government bonds, and even international bonds. Long-term bonds
are considered one of the best investments in the Philippines because of the potentially high-
interest yields. One thing to remember about this high-interest investment in the Philippines is
that when interests are high, the value of the bonds becomes low, and vice versa.

 ETFs
Exchange-Traded Funds or ETFs are a portfolio of bonds, investments, and stocks that
are passively managed. ETFs don’t invest in specific securities but in underlying indexes. In
general, ETFs are more affordable compared to mutual funds because they don’t charge load
fees.

 Mutual Funds
Mutual funds are pooled investments from different investors to form a massive asset
base. Mutual funds are advantageous to investors especially since they offer portfolio
management. As an investor, you’ll have a professional buy and sell securities for you. Also,
interests and dividends are paid towards the fund, which allows the investment to grow
gradually. Although investing in mutual funds in the Philippines poses lower risks than other
forms of investments, you should take note of high fees, sales charges, and even some
tendencies of fund managers to abuse their roles. Some fund managers might abuse their
authority through excessive replacements and unnecessary trading.

o Businesses in the Philippines (Local and International)

 Fresh and Processed Food
The Philippines is a major exporter of raw ingredients, fresh and processed seafood and
fresh produce to the US, Japan, China, Korea, UAE, and Singapore. In 2016, Singapore ranks
ninth in Asia as a food export market for the Philippines, with fresh crab, lobster, and prawn as
major export items. Other Philippine food products are also available in FairPrice, Giant and
Chinatown.
 Halal
Several Philippine companies are halal certified. Philippine halal suppliers offer products
under these food segments: Cereal, Carrageenan and other food additives, Beverage, Bakery,
Grain, Chemical, Confectionary, Beauty and Cosmetic, Egg, edible fungus, Flour and Starch, Food
Supplement, Gelatin, Ice Cream and Dairy, Ink and Packaging Material, Noodle and Pasta, Nut,
Oil and Coconut By-Product, Poultry, Meat and Meat Shop, Processed Fruit, Meat, Vegetable
and Seafood, Fresh and Frozen food, Sauce and Condiment, Candy, Sugar Product and
Sweetener, Soya, Syrup, Toll Packer and Toll Manufacturer, Snack, Processing Aid, Biscuit,
Pickled Seaweed and Drinking Water Treatment. For non-food, the country produces
pharmaceutical and healthcare and personal care products. It is also slowly beefing up facilities
as well needed by Muslim travelers such as hotels, mosques, prayer, and foot washing spaces.
The Philippines is making its bid to join this lucrative market by aligning its halal accreditation
systems and institutions. A Halal Board was established in 2017 under the Philippines Halal
Export Development and Promotion Act of 2016 which would be developing a comprehensive
set of strategies on halal certification and export promotion.

 Engineering and Architecture Services

The Philippine engineering design sector offers many services for foreign companies
outsourcing to the Philippines, including civil engineering, architecture, and structural-design
assistance. Its growth can be attributed to a similar trend of development in closely related
industries such as the construction and real estate industries. Several foreign companies are
utilizing Philippine talent and resources for core research and product development purposes,
planning, and procurement procedures, even for critical construction projects. Every year, over
62,000 IT-enabled and English-proficient Engineering graduates integrate into the Philippine
workforce. Known for their creativity, they are also well-versed in several advanced engineering
programs, including CAD, CAM, and AutoCAD.

 Maintenance, Repair and Overhaul (MRO) Service

The Philippines can support Singapore as it strengthens its aerospace industry. Key
Philippine aerospace and aviation players in the fields of parts manufacturing, MRO and aviation
training have chartered significant growth, with projected export revenues of up to USD 1.5
billion in the next 10 years. The country now has 75 MRO companies specializing in airframe
heavy maintenance, engine and APU maintenance, component/systems maintenance, repair
services, and aircraft interiors MRO. Major MRO firms that have operations in the Philippines
include Lufthansa Technik, SIA Engineering (Philippines), Airbus Helicopters, Honeywell CEASA
(Subic Bay) Company, Asian Aerospace Corporation, and Aerotechnok Services. The MRO sector
provides services to the domestic and international commercial aviation industries, and general
aviation industry. Apart from the competitive cost and abundance of human resources, the
country’s advantage is its speed of service delivery and turnaround.

 Franchising
Several Philippine companies with unique and world-class products and services have
found success overseas such as San Miguel Corporation, Jollibee, Universal Robina Corporation,
Liwayway Marketing Corporation, United Laboratories, Manila Water, Metro Pacific Group, and
 International Container Terminal Services. Children clothing label Periwinkle recently expanded
to Indonesia and Max’s Group brought Yellow Cab Pizza to Singapore in 2017. According to
Samie Lim, chair emeritus of the Philippine Franchising Association, the Philippines has a wealth
of knowledge and expertise to lean back on. He shares that the Philippines has the second-
largest pool of professionally certified franchising executives in the world, next to the US and
this, combined with the Filipino entrepreneurs’ search for growth, can be relied on to fulfill that
desire to test its mettle against foreign counterparts.

References:

https://www.lumina.com.ph/news-and-blogs/blogs/best-investment-in-the-philippines-for-long-term-
goals-this-2022/

https://www.moneymax.ph/personal-finance/articles/best-investments-goals

https://www.pnb.com.ph/index.php/investment-opportunities

https://www.philippine-embassy.org.sg/doing-business/investment-opportunities/