“Bet on sanity,” says Metrobank’s Tansingco
Investors are recommended to stay calm and make decisions with a long-term view.
With the Philippines’ history of surviving financial crises, investors are advised to remain calm amid current geopolitical issues, according to a top Metrobank executive.
Appearing on ANC’s “Business Outlook,” Metrobank Senior Executive Vice President Fernand Antonio Tansingco said that there are still many opportunities to enter the markets at any time, citing the performance of certain stocks that grew in value during the height of the pandemic.
“One thing that we must remember is we have to bet on sanity,” Tansingco said. “We have resilience as a world, as an economy, and as Filipinos to withstand headwinds.”
Tansingco reminded about the resilience of Philippine companies during economic downturns, including the Asian financial crisis in 1997 and the Global financial crisis 10 years later. He said that those who kept calm picked up these stocks and saw them increase in value by as much as 50%.
Tansingco is hopeful that the Philippines can still survive amid global geopolitical and economic issues, stating that many domestic industries have kept their balance sheets strong and have not taken risks that could have toppled them.
“Places of opportunities”
There are still a few places where investments can still generate income. Given the uptick in domestic prices seen in the past quarter, tactical investors have been on the hunt for better opportunities to beat inflation.
Likewise, heightened volatility in the direction of rates has prompted market participants to not only look for ways to maximize returns but also minimize risks.
Tansingco said that there are specific criteria that investors can look for when they want to stay ahead of inflation.
For stock traders, Tansingco recommended to look for companies that are trading below book value, which measure the value of an asset after its outstanding liabilities have been paid off. The higher the book value, the better it is worth to its investors.
Another criterion to look for is a company’s historical earnings, as well as its outlook, which should offer guidance on how it would perform in the future.
Tansingco also recommends looking for dividend-earning companies, especially those that have historically good dividend yields.
“Ask your broker which companies meet these criteria and these will tide you over amid high inflation and give you good upside,” Tansingco said.
Additionally, Tansingco said that 6.5% to 7% yields on peso bonds are attractive levels, especially if the country’s inflation rate keeps steady at 4%, also noting that to maximize yields, bonds should be held longer.
“If the Philippines can keep its inflation rate at 4% long-term, not just this year, then a bond at 6.5 or even 7 % is good value. This is an opportunity for some people to live on interest 3, 5, 10 years from now,” Tansingco said.
ALEXANDER VILLAFANIA is a writer for Metrobank’s Wealth Insights. For almost 20 years, he authored stories on science, technology, and education as a journalist for several local news organizations. He has since transitioned to writing more about financial literacy, believing that helping people develop a healthy relationship with money is key to enabling positive socio-economic and environmental change.