PHILIPPINES among ‘outperformers’ in Asia, says Moody’s

The Philippines has once again been recognized as one of Asia-Pacific’s expected outperformers, amid weak demand from the United States and Europe that has dragged down the export-driven economies of other countries in the region.

In a new report, rating firm Moody’s Investor Service said the Asia-Pacific region remained stable, despite global headwinds caused by slowing growth in China and a tepid recovery in the US.

“Global market volatility over the past few weeks has adversely impacted asset markets across Asia Pacific in a swift and undifferentiated manner,” Moody’s said.

Moody’s warned that while foreign investments may return to the region following the recent pullout, “capital inflows will likely return with an eye towards risk-adjusted returns in contrast to the indiscriminate search for yield that characterized inflows in recent years.”

Unlike the rest of the region, however, a few countries, including the Philippines, are expected to be more attractive investment destinations given their proven resilience in the face of difficulties abroad.

“Indonesia and the Philippines have featured the biggest improvements in terms of their percentile ranking,” the rating firm’s Sovereign Mid-Year Update said.

“High economic growth, narrow fiscal deficits, and exchange rate appreciation have combined to lead to debt consolidation in both countries and have contributed to the upward trajectory in their ratings,” Moody’s said.

The report noted that the Philippines was one of the few countries that were able to reduce levels of government debt despite the global slowdown that started in 2009. This came as other countries accumulated debt to fund stimulus efforts during the crisis.

Moody’s said between 2007 and 2013, the Philippines’ level of government debt fell by 4.9 percent in relation to its proportion to gross domestic product (GDP). This was lower than the 10.8-percent decline in Indonesia, but higher than the 4.8 percent posted by India.

Amid the Philippines improved performance, Moody’s once again hinted at a possible upgrade of the country’s sovereign credit rating.

Rating firms Standard & Poor’s and Fitch Ratings already rate the Philippines at investment grade, while Moody’s still rates the country one notch lower.

A country’s sovereign rating is a reflection of the condition of its economy since it indicates the national government’s ability to repay its obligations.

“The positive outlook for the Philippines is unique globally, while those for Hong Kong, Mongolia, and Singapore have been revised to negative this year,” the Moody’s report read.

Source:

By Paolo G. Montecillo

Philippine Daily Inquirer

http://business.inquirer.net/133157/ph-among-outperformers-in-asia-says-moodys

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INVESTING is a matter of TIME, not TIMING

Commentary

Lessons from the market slide

By Riza Mantaring
Philippine Daily Inquirer

Remember lechon manok, shawarma, and zagu? At one time they were all the rage, and it seemed like every week a new stall would be sprouting up on the next street corner, never mind that there were already a dozen others within walking distance.

We’d hear stories of how this or that person made a ton of money with just a small investment. For some, the temptation would eventually become too great that they would open their own stall not wanting to miss out on the action. Many did not even bother with basic market studies—potential buyers in the area, foot or vehicular traffic passing by, competition, etc. Inevitably, of course, most shut down and what are left are those that do have solid value propositions.

Substitute stocks for lechon manok and you have a taste of what has happened in the market lately.

While the market was going up, more and more people came in for the ride without fully understanding why they were doing it and what they were getting into.

Herd mentality

The low interest rates were also a factor—people were simply looking for instruments from which they could earn more. But herd mentality is contagious when it comes to investments: If Pedro or Juan are in it, it must be OK, and if Rosing is making money, I probably will, too!

The recent slide teaches us a number of lessons:

Do not go with the herd. As Warren Buffet famously said, “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” And from Peter Lynch: “A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.”

Do not let emotions rule investment decisions. The excitement of seeing money growing quickly when sentiments are positive often leads people to buy when prices are high, just as fear in a down market often leads people to sell when prices are low.

Be careful who you deal with. In an up market, everyone’s an expert. There is no shortage of people advertising their gains, giving advice and enticing you to invest your hard-earned money. But in a down market, many suddenly disappear. Look for the ones who will be with you through the ups and downs, who will address your concerns, handhold you and help guide you in deciding what to do.

Lengthen your horizons. If we look at the movement of the PSEi between end-2012 and end-June 2013, its close has gone from 5812.73 at year-end to a high of 7392.20 on May 15 to a low of 5789.06 on June 25. Just three days later, it ended at 6465.28. Quite a lot of movement. And if you went in and out during that period, depending on when you did so, you could have either made a lot of money or lost quite a bit.

A matter of time

In 2007 the index ended at 3621.60, only to drop to 1872.85 by end-2008. A friend of mine who had invested in an equity fund in 2007 told me she panicked and took her money out. Taking that particular equity fund, if she had put in a P1,000,000 at the end of 2007, this would have been down to P624,000 by end-2008, so she would have realized quite a significant loss. But if she had kept her money in, that same P624,000 would have been back to P1.26 million by end-2010, and P1.73 million by end-2012.

As you can see, it is very difficult to time the market. But the longer you are invested, the smaller the effect of market fluctuations. As pundits would often say, investing is a matter of time, not timing.

And by investing regularly you can do peso cost averaging. Markets always move in cycles, and by putting in a fixed amount each month, you take advantage of these cycles by buying more stocks when the market is down.

Look outside. Nowadays, successful investing requires understanding not just the local, but also global environments. Global economies have never been as interconnected as they are now and capital flows easily across countries.

As we have seen, no matter how good our economy has been, it is not immune to developments overseas. A simple statement from the Fed chair on the possible phasing out of the US government’s bond-buying program triggered a massive selloff in many overseas markets, including ours.

The road up

Most of us, however, have neither the time nor the expertise to do so. So, having a professional fund manager handle your money is a good option, and many will do it for an initial investment of as little as P5,000.

What to do now that the market is down?

That of course depends on your needs.

If you need the money now, hopefully you would have been invested for a while—one typically wouldn’t invest in stocks for immediate needs. Given the run-up in recent years, you would still be ahead from when you put in the money. In fact, even year-on-year, you would still be ahead.

If you don’t need the money now, remember that the outlook is still bright. Market corrections are essential to prevent asset bubbles from forming. When sentiments run high, exuberance can lead to unrealistic prices.

Now that much of the “hot” money has exited, the market is back to fundamentals, and fundamentals remain healthy. Longer term, the market is expected to bounce back. Just remember that the road up is never straight.

Strong fundamentals

Recently our chief investments officer was trying to explain the market situation and outlook to a twenty-something associate tasked to prepare an infographic, without much success.

Finally, noticing how much of a fashionista the associate was, the officer said, “when a bag goes on sale at 50 percent off, you can now buy two bags for the price of one, right?”

Seeing her nod, he continued, “but nothing about the bag has changed, right? It has the same quality, and is just as stylish. Its fundamental value hasn’t changed. But now, you can get more of it for the same amount. But once the sale is over, if the bag is really a good one, it goes back up in price.”

It’s the same with our market—the underlying values remain the same, but now stocks are much cheaper than a month and a half ago, and eventually will find their true value. As the money returns to emerging markets, most economists agree that the Philippines will be a prime destination.

So if you’re looking for long-term value rather than quick gains, remember that the market is anchored on strong fundamentals. To go back to the bag analogy, a good bag is a good bag, even when on sale, it will still take you places!

(The author is president and CEO of Sun Life Financial.)

http://business.inquirer.net/132171/lessons-from-the-market-slide

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Risk Level of Stocks

STOCKS don't offer a guaranteed return, which is why it's important to choose them carefully instead of acting on hot tip you heard from a friend. Don't ever invest in something you don't understand. Do your homework. Making an informed decision to assume risk creates an opportunity for greater return on your investment. Jumping into investments you know nothing about, or that you hope will create a quick profit, puts your money at risk. For newbies, know your investment objectives, stick to it and don't panic. Below is a good article from Philippine Daily Inquirer: 

INVESTMENT RISK

Philippine Daily Inquirer

Be wary about investing in stocks. Like any other activity where one can lose money, the stock market is not for the faint of heart. The usual cycle runs like this: An economic boom emerges on the horizon, big investors bet early and accumulate stocks, prices start a dizzying climb, small investors join the fray and buy stocks somewhere near the peak, big investors who bought early start selling at a profit, and—with more sellers than willing buyers in the market—prices tumble. More often than not, small investors are left holding on to stocks bought expensively because they knew very little to begin with, many of them merely lured into playing by relatives or friends of friends who had bragged about making a “killing” in stocks.

Seasoned investors or players make money in stocks, but many others take a hit in varying amounts. Small investors can lose a few hundred to a few thousand pesos. Bigger investors can lose by the hundreds of thousands up to a few million pesos. Economies, on the other hand, can lose billions of dollars. Here’s an interesting piece of data on the magnitude of market losses at the macroeconomic level. Last week, it was reported that Japan’s stock market capitalization was down $577 billion since the high of May 22. This is more than double the Philippines’ $260.24 billion (P10.93 trillion) market size at end-2012. Locally, the market capitalization of companies listed on the Philippine Stock Exchange (PSE) has fallen to P10.78 trillion as of last Friday.

The reason for the current global decline in emerging markets is that the improvements in US employment and housing led institutional investors to believe that the Federal Reserve Board (the central bank of the United States) will reduce its so-called quantitative easing measures aimed at resuscitating the world’s biggest economy. Prospects of an economic recovery in the United States are starting to sap funds away from emerging markets.

Brokers and analysts are convinced that the market’s bull run will extend at least all the way to the end of the Aquino administration in 2016. What they are not saying is that a lengthened market climb is usually interrupted by declines in prices—usually referred to as “corrections”—when those who have made substantial paper profits for buying earlier cash in on their gains. Some of these “corrections” may be marginal, but others can be as sharp as the one experienced by the local market in the past three weeks.

The local stock market has been rising since 2009. The four-year rally has driven the PSE index’s valuation to 19 times the estimated profits for 2013, reportedly the highest price-earnings ratio (PE) among emerging and developed markets. This compares with the five-year average PE ratio of 13 times for local stocks.

The PSE index or PSEi is an indicator of the general movement of stock market prices. It ended 2008 at 1,872.85 points. In 2009, the PSEi gained 63 percent to end the year at 3,052.68. It added another gain of 37.6 percent in 2010 as it closed at 4,201.14. The following year was not as exciting, with the PSEi adding only 4.1 percent to close at 4,371.96. It came back strongly last year, adding 33 percent to end 2012 at 5,812. Last January, the PSEi began a rapid rise to a peak of 7,392.20 on May 15, or a gain of 27.19 percent in less than six months. From the end of 2009 to the stock market bull run’s peak last May 15, the PSEi gained a whopping 294.7 percent. The downturn in the second half of May through early June has cut the PSEi to 6,701.95, although this was still up by 15.3 percent from end-2012.

It is true that many people will continue to make money by investing in stocks. Returns from stock investments can beat yields on bank deposits anytime, or even the rates offered by the relatively safe government securities. But there are risks involved. A company with very solid credentials today can collapse under the weight of an impending economic downturn tomorrow. The 1997 Asian financial crisis and the United-States-led subprime crisis in 2008, which dragged the global economy to a recession, are testaments to this fact.

Many stockbrokers are saying that the recent sharp downturn is a “perfect opportunity to come in,” but would-be investors really need to be most discerning. Seeking expert advice from licensed and reputable stockbrokers is the best way to start.

SOURCE: Inquirer Opinion, Investment Risk

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Digging Out of Credit Card Debt

Being debt over your head can be an overwhelming, hopeless feeling. You may be embarrassed for others to know that you're struggling to pay your bills. You're not alone. With hard work and discipline, you can dig your way out. Let me share Suze Orman's (internationally acclaimed personal finance expert) advice on credit card debt.

Drowning in credit card debt? 

Here's Suze Orman's advice

by Cathy Rose A. Garcia, ABS-CBNnews.com

Posted at 05/15/2013 6:37 PM | Updated as of 05/15/2013 6:52 PM

American Express and American Express corporate cards are pictured in Encinitas, California in this file photo taken October 17, 2011. -- Photo by Reuters

MANILA, Philippines - Personal finance guru Suze Orman on Wednesday offered some advice for Filipinos who can't control their urge to spend and end up with credit card debt that they can't pay.

Before buying anything, Orman said you should ask yourself this: Is it a need or is it a want?

"If it's a want, walk away. If it's a need, you buy it. If you live below your means... and purchasing only your needs and walking away from your wants, you will find money to save," she said in an interview with Karen Davila on ANC's Headstart.

According to Orman, the first law of money is "to live below your means, but within your needs." The best-selling author and motivational speaker said people should not make the mistake of thinking the goal of life is to buy things.

"The goal of money is for you to buy your needs to feed yourself, feed your children, buy a roof over your head that doesn't blow away... That's the goal, so you can sleep at night, not to buy five watches," she said.

How to get out of credit card debt

The most common "financial sin", Orman says, is credit card debt.

"Debt is bondage. You will never have financial freedom if you have bondage," she emphasized.

On ANC's Headstart, Orman took questions from Filipino callers. A Filipina asked the "money lady", who hosts CNBC's The Suze Orman Show, for advice on how to pay off her credit card debt.

"Before you save money, before you invest, your number one goal is to take whatever extra money you have and pay off that credit card debt because at 36% (interest), you are digging a hole deeper and deeper," she said.

But the more important question is how a person gets into credit card debt.  Orman noted people who spend more than what they can afford are usually insecure.

"When you spend money you don't have, what does that say about you? It says you care about these things that money can buy more than you care about having money in a savings account," she noted.

"It means you care about these things and why do you care? So that other people will look at you, 'she has a lot of money,' 'look at his watch,' 'look at her clothes'. Whenever you see somebody with credit card debt, I already know it's a self-esteem issue. You can't fix a financial problem with money ever. You should first fix why a person spends more than they have. Until you fix that, they'll just get into credit card debt over and over again."

Save, save, save

Since the savings rate here is still quite low, Orman hopes to encourage Filipinos to save more. She noted one should save a minimum of 10% of one's salary, and have an emergency fund in case one gets sick or fired.

"You want to make sure you have a savings account that has at least 8 months of what it would cost you to live for your everyday needs," she said.

Orman said one should also start investing money every month on a mutual fund. "After you've done that, every month set aside a specific amount and invest in that fund... It's peso cost averaging, that way when the fund goes down, your pesos buy more shares. When the fund goes up, your pesos buy less shares but over time you've averaged the cost of the share with your pesos and you won't lose money," she said.

Dollar or peso?

Some Filipinos have a habit of saving their money in dollar accounts, instead of peso accounts. Orman said Filipinos should invest in pesos, especially if the peso continues to strengthen.

"At this point, I would be saving in pesos. If they save in dollars, and the peso continues to go up, they will lose money in the long run. You have to believe in your country. You have to invest in yourself. If you don't beleive in PH, in your own peso here, what does that say? I would be investing right here in this country. Forget the US," she said.

The best-selling author had high praise for the Philippine economy. "This is a country that is starting to grow. The economy is growing. The stock market is booming. So the whole country is doing great but its people are not doing great yet," she said.

Before leaving the show, Orman had this message for Filipinos: "Can you just learn to be safe with your savings? Can you want to be safe? Can you want to be secure? Can you put yourself first once and for all over the things that money can buy?" http://www.abs-cbnnews.com/business/05/15/13/drowning-credit-card-debt-heres-suze-ormans-advice

Suze Orman advises Filipinos to invest in PH

http://www.abs-cbnnews.com/video/business/05/15/13/suze-orman-advises-filipinos-invest-ph

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"Wealth is Health" -- BASIC INVESTING SEMINAR by AYA LARAYA

Wealth is Health                                                                                  

Caring for Your Health Requires Caring for Your Money

“An apple a day keeps the doctor away.” This is just one of the sayings we grew up with. We’ve got dozens of these that put emphasis on health. It only goes to show that health is one of our major priorities.

The following are health maxims that we try to live by: eat a balanced meal, have a good night’s sleep, and drink 8 glasses of water a day. This is the ideal scenario, but let’s be honest – there are times that we just crave for junk food, pizza, and other fast food meals. Kids nowadays, instead of playing outside are glued to their video games. This is the reason why we should take extra care of our health.

You know what they always say, “Health is Wealth”. Having a lot of money is useless if you are not in good shape. How can we enjoy what  life has to offer if we are sick or lacking energy?

But aside from the fact that Health is Wealth, in today’s society, “Wealth is Health” is also equally true.

Wealth is Health too!

No matter how much we take care of ourselves, by the time we reach the age of 50, there will be some changes in our body. I’m not trying to be negative here, but it is during this time when high cholesterol, diabetes, and other diseases begin to be felt.

Now, is health care cheap or expensive in the Philippines? It is expensive, right?

Annual check up, gym membership, supplements, and medicines all cost us money. And with the technology and changes in the health care industry, the more modern something is, the more expensive the treatment will be.

How can we afford this if we do not have enough money?

Hospi-tel

When you book a room in a hospital, you’ll see options such as suite or a deluxe room. These terms used to be for high-end hotels – now, for hospitals too!

Aside from the hospital stay, there are other charges like lab tests, medications, and the doctors’ fees. After the hospital confinement, you also have to purchase medicines for maintenance.

Every item costs money. Indeed, Wealth is Health.

Our Prescription

There will come a time when one has to retire and won’t be able to work anymore. And if we do not have enough money to prepare for these things, how can we be sure of a good and healthy life as we grow older?

Ask yourself this, “When I retire, who is going to pay the medical bills?” If you can’t find the answer, now is the time to prepare!

Aside from taking care of our health today, another way to ensure good health in the future is having an income for medical expenses in the future.

The perfect balance between “Health is Wealth” and “Wealth is Health” is our prescription for you.

Start living healthy today and learn how to save and invest for your future!

 http://pesosandsense.com/wealth-is-health/

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5 FINANCE THINGS TO DO BEFORE YOU HIT 30 by Randell Tiongson

There’s something about hitting 30.

Somehow, you are still considered young at 30 and yet not that young anymore. Many things happen when you cross the 30 mark in the many aspects of your life. Your career should be taking off at this age, you may have started a family or contemplating on starting one, you may have started accumulating wealth and you may have also started accumulating debt.

I have crossed the big 30 many, many, many years ago, I felt there were many things I should have done before I hit 30. I was listening to my friend and colleague Marvin Germo(of Stock Smarts) on the things he has been doing for financial readiness and he is not even 30. Marvin mentioned many things he has done which I only started on much later. If ever I get to do things over again, here are the finance things I will definitely be serious about before hitting 30.

1)      Ensure you have a very healthy cash flow – Folks in their 20s have started to earn and have begun to appreciate enjoying their income. The problem is, they enjoy their income too well that there is a tendency to spend every peso of it. This is a fun season to many as they now have freedom to do what they want and have the means to finance what they want. This is also a time of exploration to many especially for those who had parents who were a bit restrictive (like me as a parent), however, these explorations costs a lot of money. Accumulation of stuff also begins at this season and lifestyle upgrades becomes a social pressure.

Way before hitting 30, make sure you have a good grip on your money management. Working on a written budget is the best place to start. Learn how to allocate your income between needs and wants and make sure that at the end of the month, there is savings left. For those in their 20s, it’s best to have 30% to 40% savings left from income which is very possible if you have the discipline to stick to a budget. The money behavior you will have during this period will a have a lasting impact on your financial future so better start doing things right.

2)      Minimize or resist from borrowing – Credit card companies and financial institutions are always targeting this age group because they understand that people in their 20s loves to accumulate stuff, see the world and enjoy life in general — the perfect setting to lure people into debt! Not all debt is bad but you need learn how to discern a good debt from a bad one. Generally speaking, a good debt is one that will allow you to grow your assets and/or add income like a loan to finance a business or to purchase a real estate property. Any other debt that will not grow your asset base or add on to your income would be considered a bad debt like using your credit card to finance your new Samsung or iPhone smart phone, a Michael Kors bag, or your dream vacation to Bali.

People in their 20s begin to accumulate credit debt and other consumer loans which are grossly disproportional to their incomes. The bad credit decisions you will make during your 20s will have severe ramifications up to your 40s and 50s. Your credit standing will also be made or broken during this time so learn how to use credit responsibly.

3)      Start investing – The best time to begin investing is whey you are young! When you have a lot of time, you can have more options on how to grow your wealth and even take in more risks. Taking in more risks will mean that there is a better chance of growing your wealth faster and you can ride the ups and downs of the economic cycles. If you lose money and you are young, you still have a lot of time to recover. The good investments for long term would be investments in the stock market or Mutual Funds or UITFs that are invested in equities. While they are volatile, they are bound to generate the best returns over a long stretch of time. My friend and investment trainer Ricky So said “take risks when you are young, if you lose your money, you still have your parents to run to” – funny guy!

Start learning how to invest and act on it. There are a lot of seminars and training for the public on how to invest but don’t linger with making that first investment. A good way to start would be putting some money in a mutual fund or the UITF of your bank. Equity laced funds like stock funds or even balanced funds are ideal for young investors. You may also consider some on-line trading if you want to have a say over your stock market investments. Just a note, if you will not have the time and the competence to trade your own stocks, stick to mutual funds or UITFs. Make your investing automatic by regularly adding to your funds or buying more shares. In your 20s, you probably don’t have sizeable investment funds yet but small amounts done regularly will also produce great results. If you started investing only P2,000 every month at the age of 21, you would have accumulated over P1 Million by the time you hit 41 (assuming a yield of 8% p.a.). Have an auto-debit arrangement for your investing; making things automatic does the trick. Remember, invest early, invest wisely and invest regularly.

4)      Buy life insurance – This is not a pitch for life insurance agents but I encourage you to listen to one. If there are people already depending on your income, do not delay in buying a life insurance policy. Premiums are much cheaper if you buy it before you hot 30 and I also notice that premiums rise sharply when you hit your 30s and 40s. Just remember to buy a policy you can afford. There are many kinds of life insurance policies but I would probably stick to either a term insurance or a Variable Universal Life insurance or VUL. Term insurance if you want to maximize your coverage and keep your premiums low – the downside is that you do not earn from this kind of policy. I suggest that you buy term and also invest in mutual funds or you can buy a VUL which is a term with a mutual fund. Just make sure you chose a reputable provider and one who has a good record on after sales service. For your peace of mind, you may want to limit your choices among the top 10 life insurance companies.

5)      Learn from your mistakes and the mistakes of others – For sure, you will make a lot of mistakes in your 20s – and your 30s, 40s, 50s, 60s and 70s. Along with many other mistakes you are bound to make, some of them are financial mistakes — bad investment decisions, wrong borrowings, wrong purchases, etc. But that’s life and the best way to respond to our mistakes is for us to learn from it and not repeat it anymore. As you make those mistakes, always look for the lesson behind those mistakes and learn to avoid them in the future.

Experience is your best teacher but we don’t always have to learn from our own experience. You can also learn much from other people’s experiences and in this case, other people’s mistakes. Look for mentors who can help you and learn from their experiences and their mistakes as well.

Hitting 30 is a big thing and somehow, it’s a passage rite to many of us. It is a time to learn from the past but be hopeful for what the future will bring.

“Don’t let anyone think less of you because you are young. Be an example to all believers in what you say, in the way you live, in your love, your faith, and your purity.” — 1 Timothy 4:12, NLT

Attend iCon 2013: The No Nonsense Investments Conference

http://www.randelltiongson.com/5-finance-hit-30/

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Philippines Beats Indonesia in Gaining S&P Investment Grade

By Karl Lester M. Yap - May 3, 2013 1:53 PM GMT+0800

Philippine stocks rose to a record after it beat Indonesia to win an investment grade fromStandard & Poor’s, as President Benigno Aquino outshines Susilo Bambang Yudhoyono in improving government finances and spurring growth.

The rating on the Philippines’ long-term foreign-currency- denominated debt was raised one level to BBB- from BB+, with a stable outlook, S&P said in a statement yesterday. In contrast, the assessor revised its outlook on Indonesia’s BB+ rating to stable from positive.

Enlarge image

Vendors sell fruit at the Divisoria market in Manila, the Philippines. Photographer: Julian Abram Wainwright/Bloomberg

4:07

May 3 (Bloomberg) -- Philippine Finance Secretary Cesar Purisima talks about the nation's investment grade rating by Standard & Poor's, and the outlook for the domestic economy. The Philippines beat Indonesia to win an investment grade from S&P’s, as President Benigno Aquino outshines Susilo Bambang Yudhoyono in improving government finances and spurring growth. Purisima speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Enlarge image

President Benigno Aquino has increased state spending and narrowed the budget deficit while stepping up its fight against corruption. Photographer: Julian Abram Wainwright/Bloomberg

“We’re continuing to address constraints to growth,” Philippine Finance Secretary Cesar Purisima said in a Bloomberg Television interview with Susan Li today. “We’re fast tracking our infrastructure projects. We’re looking at areas we can open up to foreign investors.”

Aquino’s drive to transform the nation into one of the region’s fastest-growing economies is gaining strength, with the government forecasting record investment pledges this year as companies including Murata Manufacturing Co. expand. InIndonesia, President Yudhoyono has delayed cutting fuel subsidies that have drained government finances even as he tries to allocate more funds to infrastructure spending.

“For the Philippines, this is yet another confirmation that Aquino’s reforms have borne fruit, which would help in attracting not just short-term flows, but long-term direct investments,” said Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG. “The rating momentum for Indonesia is moving in the wrong direction.”

Capital Inflows

The Philippine Stock Exchange Index (PCOMP) rose as much as 1.9 percent today to a record. Indonesia’s benchmarkJakarta Composite Index (JCI) slid a second day.

The peso climbed to a four-week high, rising 0.3 percent to 40.93 per dollar, according to Tullett Prebon Plc. In the past 12 months, it is the biggest gainer after the Thai baht among 11 Asian currencies tracked by Bloomberg.

“The upgrade on the Philippines reflects a strengthening external profile, moderating inflation, and the government’s declining reliance on foreign currency debt,” S&P said. “In our assessment, the stalling of the reform momentum in Indonesia and a weaker external profile have diminished the potential for an upgrade over the next 12 months,” it said separately.

Higher ratings may boost capital inflows into the Philippines and prompt the central bank to add to measures to curb asset-bubble risks. Bangko Sentral ng Pilipinas last month cut the rate it pays on special deposit accounts for a third time this year, while keeping the rate it pays lenders for overnight deposits at a record-low 3.5 percent.

Continued Strength

“The Philippine central bank has done a good job in managing inflows,” S&P credit analyst Agost Benard said in a teleconference today. Still, the peso will likely have to appreciate as inflows continue to rise, he said.

Moody’s Investors Service, which rates the Philippines one step below investment grade, is keeping a close eye on developments on the ground, Singapore-based sovereign analyst Christian de Guzman said in an interview today.

“Much of the momentum has continued in terms of growth, as well as the health of external payments position, as evidenced by the continued strength of remittance inflows and stability of foreign exchange reserves,” he said. “However, revenue performance is starting to slow and begs the question if efforts to increase tax efficiency have already been maximized.”

Philippine revenue collection fell a second month in March, a report showed yesterday, even after the implementation of a “sin tax” on alcohol and tobacco products. Indonesia’s rating of Baa3 above the Philippines is still justified, de Guzman said, citing a longer track record of growth and fiscal management.

Infrastructure Investment

Aquino has increased state spending and narrowed the budget deficit while seeking more than $17 billion of infrastructure investments to spur growth to as much as 7 percent this year. The Philippine economy, which was more than twice the size of Malaysia and 10 times bigger thanSingapore’s in 1960, expanded 6.8 percent in the fourth quarter.

The president has taken on the Catholic Church with a bill to provide free contraceptives to the poor, arrested his predecessor on graft charges, and ousted the country’s top judge for illegally concealing his wealth. Transparency International raised the country’s ranking on its annual corruption index last year to 105, versus Indonesia’s 118.

Fitch Ratings was the first to upgrade the Philippines to investment grade in March. Moody’s Investors Service rates the nation one step below.

Fuel Prices

Ratings changes aren’t always followed by investors. French bonds and U.S. Treasuries both made gains after the nations were stripped of their AAA credit ratings, in a sign that downgrades may have little bearing on borrowing costs. Almost half the time, government bond yields fall when an action suggests they should climb, or they increase even as a change signals a decline, according to 38 years of data compiled by Bloomberg.

Yudhoyono said this week he will only increase fuel prices after Parliament approves compensation programs for the poor, a move that could delay efforts to contain a budget deficitthat may be more than twice as much as estimated without subsidy cuts.

Fuel Prices

Failure to reduce subsidies last year drained government finances and led to a record current-account shortfall, hurting the rupiah as foreign investors lost confidence. Indonesia’s economyprobably expanded near the slowest pace in more than two years last quarter as a decline in commodity prices hurt exports.

Indonesia may implement incremental measures such as a moderate increase in fuel prices, S&P’s Benard said, while stopping short of bold measures given the stage of the electoral cycle the country is in, he said.

S&P said yesterday it may raise the country’s rating if the fuel reforms are finalized, the state budget is improved, or if structural reforms boost economic growth. The assessment may be lowered if renewed fiscal or external pressures are not met with “timely and adequate policy responses,” it said.

“Policy and exchange-rate management need to be more focused on sending the right signals to the market so as not to induce portfolio outflows,” Benard said.

http://www.bloomberg.com/news/2013-05-02/philippines-wins-investment-grade-from-s-p-in-aquino-affirmation.html

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Why Financial Goals Are Important?

You wouldn't start out on a long trip into unfamiliar territory without a road map, yet many JUAN DELA CRUZ go through life without a concrete plan for their financial future. The road to financial freedom can lead directly to your destination or to a dead end. Specific financial goals and written plans for meeting them help you focus your efforts on the end result. The first steps are to determine your financial status today and then decide what you want to achieve for your future.

Effective goal setting should be SMART!

Goals are like the wheels on your car, they keep you moving in the direction you want to go, and you won't get very far without them. If you haven't started planning for your future, now is the time to begin, no matter what your age is. However, if you are in your twenties, you have a distinct advantage. It will give you the most powerful financial tool: TIME.You'll have to work at it a lot harder if you start later in life.

As the saying goes, "Most people don't plan to fail, they just fail to plan." Without planning, even the best of intentions lead nowhere. Start mapping out your route now. Your entire future depends on it. 

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Who Needs Financial Literacy?

This article is not mine, I read this from Pesos and Sense website. I want to share it to all so we could learn the importance of why every JUAN DELA CRUZ needs financial education. Sino ba sa atin ang ayaw yumaman? Lahat naman tayo gusto, pero ang tanong... may ginagawa ba tayo para dito? When do you plan to take action? Our ability to save has nothing to do with the size of our income... it has something to do with our discipline. If our problem is our inability to manage our earnings, no amount of earnings will solve our problem. 

http://pesosandsense.com/financial-education-for-filipinos/

Whenever the topic of financial education is brought up, most Filipinos brush it off thinking that it is only for businesspeople or for the “rich”. The truth is, we all need it. If you want to be free financially or if you want to be rich, you need to learn this!

Although we don’t pay much attention to it, it does affect our daily lives. To put a child to school, to own a house, to drive a car, to pay the bills – all of these will be affected by both having and not having the knowledge about handling money wisely.

Money and Knowledge

People think that acquiring huge sums of money will solve their problems. It may be true for some, but without the knowledge to handle it correctly, others might find themselves in a more problematic situation.

You may have heard of lotto winners who ended up being bankrupt or in a financial mess. This is what usually happens to instant millionaires who suddenly find themselves rich – in fact, too rich that they do not know what to do with the money anymore.

This is exactly what happened to Dionie Reyes who won 14 million pesos in the PCSO Lotto 6/42 draw last April 22, 2008. After winning, he lived the life of a millionaire.

He bought a P4-million house in an exclusive subdivision, drove a sports utility vehicle, and gave balato ranging from P1,000 – P850,000 to his friends and relatives. He also gambled, womanized, and went out every night. After 3 months, he spent all of his money and ended up in debt.*

People lose money for many reasons, and overspending is one of them. This is the reason why having money and financial knowledge at the same time is the key that will greatly help in improving one’s life. Money and financial knowledge go hand in hand. Just like what the author Robert Kiyosaki said, “Money without financial knowledge is money soon gone.”

Money Begets Money

Our culture has taught us that the sure way to become rich is to have a good education, get a high paying job, and live your dreams. Although that is a good advice, a lot of professionals, OFWs, and fixed-income earners know that it is a cycle of “go to work, receive your salary, and pay for the expenses”. The live-your-dream part is always set aside for the future, hoping that things will get better. They are the people who work for money.

But there are some who learned to make their money work for them. How were they able to do that? They acquired the knowledge of Smart Investing.

Know Your Options!

Did you know that you have different investment options?

Investment instruments like Stocks, Mutual Funds, Real Estate, Insurance, and others can help you achieve your financial goal. You may have heard these investments before, but do you really know how they work?

Most Filipinos, even though they want to invest in these instruments, are afraid to do so because they fear that they will lose their money. And because they don’t understand it, they will not invest at all!

As we always say, take the time to learn so you can take away the fear. Understanding the different kinds of investments available will help minimize the fear of investing.

Once you have acquired the knowledge, you will see that investing isn’t so scary after all. You can sleep better at night knowing that you are taking steps today that can potentially change the way you live your life in the future.

Educate Yourself

Gone are the days when information about money is limited. There are books, articles, websites, and seminars that teach financial education to those who need it the most – the common Filipino. These are the students who want to have a brighter future, the parents who want to provide for their children, the young professionals who want to stop working and do what they really love, the OFWs who just want to return home and watch their children grow, and the thousands of skilled Filipino workers who want to live comfortably.

Are you one of them? It is time for you to act!

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