Why should more people outside Metro Manila start investing? - Marvin Germo

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Why should more people outside Metro Manila start investing?

By: Marvin Germo | August 4, 2014

Over the past few years I have had the honor to be able to travel and do different talks in different areas in the country and also outside.  The heart of which is to educate more Filipinos outside Metro Manila to learn foundational conceptions on how they can make their money work hard for them and how they call also protect themselves from being scammed.

In this article my speaking partner in Money Smarts Batangas Jeremy Jessley Tan shares his heart on why should more people outside Metro Manila start investing.  He shares this from a point of view of a city dweller moving to Batangas after he got married with the hope of encouraging more people to invest!


I am a city boy and never have I really thought of living in the province. Well, not until I met my wife who hails from the city of Lipa. It is a great city in Batangas that I can consider emerging with a feel of both urban and rural living. I spend my weekends and some weekdays in Lipa city and have noticed how Batanguenos are when it comes to investing. I also noticed how many are not aware of other investment opportunities that are available and would like to spread the word in provinces such as Batangas/Laguna so they can also make the most of riding our growing economy. Here’s my take on why Batanguenos and other kababayans from provinces should consider investing in stocks and other pooled funds:

1.  Because time deposits can be a lot riskier than other pooled investments. Unlike in Metro Manila, where bank deposits can earn a measly 1-2% or even less in interest, many of our kababayans from the provinces can avail of higher interest rates through rural banks. Time deposit rates in rural banks can go for as low as 5% to as high as 8% depending on the period and the bank. However, true to the law of investing – the higher the return, the higher the risk, these rural banks have higher probability of closing down. In 2012 alone, around 24 rural banks closed all over the country. Since 2010, the total number of rural banks that closed is around 70.

2.  Get involved in reputable businesses with a small capital. Many Filipinos in the provinces would have businesses as their top option when it comes to investing. Yes, businesses can give one the highest returns, but it also has the highest risk. At the same time, a lot of small business owners I have met didn’t have the capital to start the business, so they ended up lending and are now struggling to pay off their debt because their businesses are not as profitable as they thought it can be. Getting involved in pooled funds/stocks can be a good way to 1) be part of a business without the legwork and 2) prepare for your business by accumulating funds for your capital. Pooled funds invest in reputable companies like PLDT, Meralco, Jollibee, SM, Ayala companies, etc. At the same time, only a small capital (range from P5,000-P20,000) is necessary to take part.

3.  Be in the lending business with lower risk. One type of business that is quite famous in the provinces is the business of lending. Lending business can earn interests ranging from 25%-60% per year. But since borrowers are consumers which have higher tendencies of not paying at all, the risk lenders are undertaking is also quite high. Pooled funds are not limited to stocks/equities as one can also invest in bonds. Investing in bonds is also lending money, but the borrowers would be the nearly risk-free government and big corporations operating in the country. Those in the lending business or looking to start a lending business can look into investing in these types of pooled funds to lower their risks from borrowers.

4.  Diversification. The top 2 investments for many in the provinces would be real estate and businesses. Adding another investment option would be a good way to prepare for retirement or save for the future. Profits in businesses can be used to invest in pooled funds so 1) profits can be preserved and 2) profits can earn without doing too much work and just allowing your money to do more hard work for you. At the same time, diversifying lowers the risk of losing especially from high risk investment such as businesses.

5.  Liquidity.  Real estate being the other popular investment option in provinces can be a good investment in the long run. However, the main disadvantage of real estate is liquidity. It is not easy to sell properties to if one needs money. And if one is rushing on selling their property, they cannot leverage on getting a good price for it. Pooled funds are liquid investments with holding period of just 6 months.


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