Survey Shows Filipinos’ Increasing Appetite to Invest Overseas

Manila (PNA) — Filipinos’ risk appetite in investing overseas has increased but most still prefer to have investment properties rather than equity investments.

Results of Manulife Investor Sentiment Index for the second quarter of 2014 showed that Filipino investors were among the most optimistic and most outward-looking in Asia.

Among the regions, Filipino investors preferred to place their funds in mature markets in Asia namely: Japan and Singapore, Australia, North America, countries in developed Europe like France and Germany, emerging European countries like Greece and Hungary, and in Emerging Asia.

On a per country basis, their top three investment destinations are Canada, Japan, and the Philippines, with the latter due to continued improvement of fundamentals and the achievement of investment grade status.

In 2013, the Philippines received investment grade status from the three major debt watcher Fitch Ratings, Standard & Poor’s (S&P), and Moody’s on higher domestic output, better fiscal situation and further strengthening of external payments position.

Manulife Philippines Chief Investment Officer Aira Gaspar, CFA, said that aside from the credit rating upgrade another reason for the positive sentiment on Filipino investors is the rise in government spending on the necessary infrastructure projects.

”The country’s resilient private consumption, rising investment cycle, recovering manufacturing industry and favorable consumer and business confidence bode well for economic activity and a positive earnings growth story,” she said.

Gaspar, on the other hand, noted that “investors’ sentiment could turn sour if policy reforms aimed at addressing infrastructure deficiencies and fostering inclusive economic growth stall.”

Asked on which country they consider would post the fastest growth in the next two years, most of the Filipino respondents named Japan.

Gaspar attributed this to the Japanese economy’s 6.7 percent growth in the first quarter of the year.

She cited that Japan’s domestic growth from January to March this year transpired even before the implementation of new goods and services tax.

She also noted Philippines’ investors preference to invest in Canadian equities.

“We think there is a sound basis for this given that Canadian equities outperformed their developed market peers in the first quarter,” she said.

Amidst being bullish on investing abroad, result of the survey showed that Filipinos still listen to family, friends and coworkers for their investment decisions over the advice of industry professionals, mass media and online sources.

Manulife Philippines chief executive officer (CEO) Ryan Charland said Filipino investors would benefit more if they will listen more to the advice from professionals.

“While it is comforting to speak with family and friends for investment advice, investors would benefit from consulting investment professionals, who could help them build a sound and diversified portfolio that meets their medium to long-term financial goals,” he said.

Another notable result of the survey is the Filipinos’ preference to have physical investments like house and cash over stocks and mutual funds.

The survey showed that preference for owning a house over equities is highest in the Philippines at 61 percent compared to the 19 percent average in Asia.

Also, 75 percent of Filipino investors who were included in the survey said they own their house, a big proportion compared to the 50 percent average in Asia. (PNA) LGI/JS/UTB