Investment Tips 4 MIN READ

Unraveling the debt ceiling drama: What to do with your bond portfolio? 

The continuing impasse in debt ceiling talks puts pressure on high-yield bonds, potentially leading investors to demand higher yields for higher-risk bonds. However, a barbell strategy for investment-grade bonds, especially those with higher ratings, looks promising.

May 25, 2023By Anna Isabelle “Bea” Lejano

In our previous article, the possible consequences of the US debt ceiling drama to the global economy, as well as to the Philippines, were laid out.

With about a week away from the reported x-date, or the date by which the US would be in default of its obligations, it should be interesting to see how the investment-grade (IG) and high-yield (HY) markets performed before and after a similar debt ceiling drama in the past.

An attempt will be made in this article with the help of Metrobank’s research partner, CreditSights, who published a report titled US Strategy: Debt Ceiling Defense on May 9, 2023. This may aid you in making decisions about your bond portfolio.

But let’s talk about bond spreads first. Bond spreads represent the difference in yields between riskier bonds, like HY or IG bonds, and safer investments, like US Treasuries. Spread widening occurs during periods of market uncertainty or economic distress, when investors demand higher yields for riskier bonds, resulting in wider spreads.

Revisiting 2011

It might be worthwhile to take a little trip down memory lane to 2011 when a similar debt ceiling drama occurred, reminiscent of the current situation. Back then, the US Congress postponed raising the debt ceiling until the last minute, leading to a not-so-pleasant consequence: a credit rating downgrade by S&P.

In the buildup to the 2011 debt ceiling deadline, the spreads for IG bonds initially widened three months before the x-date. However, as the deadline drew near, the pace of widening took a breather, gradually tightening up instead. (See table below.)

CreditSights found that IG spreads performed slightly worse in the past three months ending the 2nd week of May 2023, increasing by 28 basis points (bps) as against only 21 bps back in 2011.

This was primarily driven by lower-rated bonds, namely those rated A and BBB, due to concerns about the banking system and a potential recession this year, as opposed to 2011 when spreads for higher-rated bonds, such as AA, were affected the most.

In both instances, long-term IG bonds showed relative resilience compared to short-term and medium-term bonds.

In the high-yield market, spreads have also widened by 82 bps in the past three months ending the 2nd week of May, but less than the 103 bps in 2011. The recent widening has been more apparent in short-term bonds.

Among different credit ratings, lower-rated CCC bonds performed worse both in 2011 and recently. However, the performance of higher-rated bonds such as B and BB was relatively better than in 2011.

2023 debt ceiling crunch

With the deadline fast approaching, there’s a big possibility that negotiations on the debt ceiling might again stretch until the last minute. In such a scenario, there’s a chance for HY bond spreads, especially for lower-rated CCC bonds, to widen further.

This could have an impact on HY bonds across various tenors. However, it’s worth noting that IG bond spreads, particularly for higher-rated bonds, may fare relatively better in comparison. CreditSights said there is a possibility that IG spreads could demonstrate stronger performance amid a wider risk-off sentiment.

In the current IG market landscape, there’s an interesting phenomenon known as a flat yield curve. This means that the interest rates for short- and long-term IG bonds are pretty similar, like they’re on the same playing field. This situation opens up a potential opportunity for investors who want to shield themselves from volatility.

CreditSights said, given the current situation of flat yield curves and increased pressure on short-term spreads, it is advisable to be cautiously optimistic about shorter-term IG maturities compared to mid-term ones.

The credit research firm also suggested that investors seeking protection from debt ceiling volatility may find a barbell strategy beneficial. That means focusing on the two extreme ends of the maturities of IG bonds to strike a balance between higher yielding long-term bonds and the more flexible and liquid short-term bonds.

However, no two debt ceiling dramas are alike. The current economic landscape and market dynamics differ from those of 2011. It’s quite tricky to predict how the debt ceiling crisis will affect the market and the economy.

At the end of the day, you must still pay close attention to how the debt ceiling discussions go. You may also consult your investment advisor to craft a strategy that suits your needs.

ANNA ISABELLE “BEA” LEJANO  is a Research & Business Analytics Officer at Metrobank, in charge of the bank’s research on the macroeconomy and the banking industry. She obtained her bachelor’s degree in Business Economics from the University of the Philippines School of Economics and is currently taking up her Master’s in Economics degree at the Ateneo de Manila University. She cannot function without coffee.

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Investment Tips 4 MIN READ

Are REITs becoming appealing again? 

With the recent rate hike pause of the central bank, investors may want to revisit real estate investment trusts (REITs).

May 24, 2023By EA Aguirre

With the Bangko Sentral ng Pilipinas (BSP) pausing its series of interest rate hikes recently, households and businesses alike can breathe a sigh of relief. That’s because the cost of borrowing from banks are likely to stop becoming more expensive as well.

The property sector, in particular, was at the mercy of high interest rates as the combination of elevated inflation and expensive financing discouraged new leases and expansion projects. But with a new monetary policy easing cycle on the horizon, it may be time for investors to consider increasing exposure to the property sector in their portfolios through REITs.

A REIT, or Real Estate Investment Trust, is a stock corporation which owns and operates income-generating real estate, such as office buildings, industrial plants, shopping malls, and more. (See our previous article, Finding the right time to invest in REITs.)

Investors may purchase shares in these REITs, which differ from other shares of stock as REITs are mandated by Philippine law to distribute 90% of their earnings in the form of dividends. Imagine reaping the benefits of investing in real estate without actually having to acquire and manage a property.

While REITs are already well-entrenched in financial markets around the world, the Philippine Stock Exchange welcomed its very first one when Ayala Land-sponsored AREIT, Inc. had its initial public offering (IPO) on August 13, 2020. Since then, the number of REITs in the country has grown to eight, with SM Prime Holdings, Inc. planning to enter in the second half of 2023.

2022 saw significant economic recovery from the pandemic which helped revitalize earnings in the property sector. Office space occupancy was at around 80% as employees returned to their offices, while increased mobility and revenge spending drew shoppers to the malls.

REITs were able to ride and essentially hedge against high inflation through rent adjustments. Even as the Philippines’ Consumer Price Index (CPI) averaged 5.8% year-on-year in 2022, REITs still declared dividends that were above or close to that figure.

Chart 1. Philippine REITs 2022 Dividend Yields

REITs can be a hedge against inflation. (*322-day annualized dividend yield, **198-day annualized dividend yield)

The Philippines’ CPI has since come down to 6.6% in April 2023 from a high of 8.7% in January 2023. However, despite the downward trend in headline inflation, the core CPI, which excludes volatile oil and food prices, has remained stubbornly elevated at 7.9%.

This is primarily due to second-round effects – businesses increase the prices of their goods and services in anticipation of present and future cost increases. With consumption spending still strong, businesses will likely keep their prices high, which should also allow properties to continue charging higher rent for longer.

Chart 2. Philippine Headline Consumer Price Index vs. Core Consumer Price Index

While headline inflation has begun to ease since the beginning of the year, core inflation has not.

While policy interest rates are still elevated, we expect a new BSP easing cycle to begin with a 25-basis-point cut in December 2023. Lower interest rates will encourage greater spending by households and businesses.

For the property sector, this means building and acquiring more commercial real estate to meet the needs of expanding businesses, which can potentially broaden sources of rental income. The risk to this view is greater adoption of work-from-home (WFH) arrangements and the exit of Philippine Offshore Gaming Operators (POGOs).

But despite these risks, there will continue to be demand for office space as the economy normalizes and as businesses shift to more hybrid work arrangements which balance both work from home and the office.

An easing cycle and improving business conditions may also bring in renewed optimism in the equities, which can help pull REIT valuations up. Five of the eight REITs’ share prices are down year-to-date, while DDMPR and MREIT are relatively flat.

This could be an opportunity to enter the market and slowly ladder in excess funds. Only CREIT has shown double-digit growth, likely due to its portfolio concentrated on non-cyclical renewable energy producers.

Chart 3. Philippine REITs year-to-date returns as of 17 May 2023

In summary, we believe that there is an opportunity to invest in REITs, considering that borrowing costs may be headed lower in the near future and commercial real estate occupancy will improve as the economy further normalizes.

As mentioned, REITs can be an alternative source of regular cash flow because of its dividends. And because most REIT share prices are down year-to-date, this could be an opportunity to accumulate shares in REITs.

However, please be aware that REITs are still equity instruments. They are meant for investors with aggressive risk appetites and long-term investment horizons.

It is still advisable to consult investment professionals.

(If you are a Metrobank client, you may contact your relationship manager or investment specialist to learn more.)

EARL ANDREW “EA” AGUIRRE  is a Market Strategist at Metrobank’s Financial Markets Sector and has 10 years of experience in foreign exchange, fixed income securities, and derivatives sales. He has a Master’s in Business Administration from the Ateneo Graduate School of Business. His interests include regularly traveling to Japan and learning its language and culture.

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Investment Tips 3 MIN READ

No 2008 redux: containing the Credit Suisse chaos

Before it was Main Street, now it’s Switzerland’s Paradeplatz. We are dealing with a crisis of confidence, not a debt crisis. For now, the forced sale of Credit Suisse has calmed the markets.

March 22, 2023By Ruben Zamora

UBS Group AG’s government-brokered takeover of its embattled rival, Credit Suisse Group AG, along with coordinated action by the developed countries’ central banks to boost emergency funding, have, in our view, re-established confidence in the global financial system.

It likely averted the tail risk of a full-blown contagion.

We believe that the collapse of Silicon Valley Bank and Signature Bank last week were idiosyncratic rather than systemic stress events. Mismanagement of market and liquidity risk is likely to blame. However, the spillover to Credit Suisse, a 167-year-old financial institution that’s been designated as one of the world’s 30 systemically important banks, is a different story altogether.

The risk of contagion and the ensuing market meltdown would be very real if Credit Suisse were to fail, echoing the collapse of Lehman Brothers in 2008, which marked the beginning of the global financial crisis (GFC).

To be clear, the economic fundamentals of 2023 are starkly different from 2008. The world’s largest banks are more resilient due to bigger capital buffers, US business and household balance sheets are healthier, and the US is not (yet) in a recession the way it was on the eve of the GFC, thanks to the boom-bust US housing market.

We don’t have a debt crisis, the textbook cause of financial disasters, but instead a crisis of confidence in the most vulnerable financial institutions. That’s how Credit Suisse came into the picture.

Why Credit Suisse? 

Credit Suisse had CHF 100 billion of capital and hence met the liquidity requirements of a systemically important bank. However, even prior to the collapse of the US regional banks, Credit Suisse was already under a lot of market and regulatory scrutiny thanks to years of losses and high-profile missteps, ranging from high-risk exposures (e.g., the Archegos Fund failure) to cocaine-related money laundering.

The tipping point came on March 15, when Credit Suisse’s largest shareholder, Saudi National Bank, said that it would “absolutely” not increase its investment in the bank. The emergency USD 54-billion lifeline from the Swiss National Bank the following day wasn’t large enough to stem the deposit outflow and panic selling. The Swiss government, with its banking sector teetering on the precipice, had to intervene drastically.

Orderly collapse

The government-brokered sale of Credit Suisse to UBS involved USD 3.3 billion worth of shares, which worked out to only 0.07x of the bank’s estimated full-year 2022 tangible book value, and various government safety nets that included a CHF 100-billion liquidity line from the Swiss National Bank and a CHF 9-billion guarantee for potential losses on some Credit Suisse assets. Importantly, the sale was engineered in such a way that regular shareholder approval on both sides wasn’t required.

The sale also included the complete write-off of USD 17.3 billion worth of Credit Suisse Additional Tier 1 (AT1) bonds, a condition set by the Swiss Financial Market Supervisory Authority to preserve the merged bank’s capital ratios. This likely helped consummate the deal for UBS, which reportedly offered an initial buyout price of at most USD 1 billion against a market cap of USD 8 billion before the weekend.

AT1 bonds are also known as “contingent convertibles” or “CoCo” bonds. They are a form of junior debt that counts towards the banks’ regulatory capital. AT1s are the riskiest and hence highest-yielding instruments, which were designed to transfer risks to investors and away from taxpayers if the issuing bank had trouble. These bonds can be converted into equity or written down when a lender’s capital buffers are eroded beyond a certain threshold.

Calming the markets

The forced sale of Credit Suisse has, for now, calmed markets, but we believe we’re not quite out of the woods yet. We expect volatility to remain elevated near-term as this “mini-crisis” could still lead to other mishaps, including a possible fallout in the AT1 market and more unrealized mark-to-market losses as the US Fed continues to fight inflation with more rate hikes.

Definitely, it’s not a good time to take any outsized bets on higher beta risk assets. It’s better to stay defensive.

RUBEN ZAMORA is First Vice-President and Head of Institutional Investors Coverage Division, Financial Markets Sector, at Metrobank, which manages the bank’s relationships with Non-Bank Financial Institutions, including government financial institutions, insurance companies, and asset managers. He is also the bank’s Financial Markets Strategist, focusing on fixed income and rates advisory for our high-net-worth individuals and institutional clients. He holds a Master’s in Business Administration from the University of Chicago Graduate School of Business. He is also an avid traveler and golfer.

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Investment Tips 3 MIN READ

Stay calm, SVB isn’t another Lehman Brothers

Many investors are losing sleep over the unfortunate collapse of a tech-start-up-focused bank in the US. It’s a good time to assess whether such fears are justified.

March 16, 2023By Ruben Zamora

On March 10, Silicon Valley Bank (SVB), the US’ 16th largest bank, collapsed swiftly and sensationally after an unsuccessful attempt to raise fresh capital, which then drove a bank run by its depositors, made up primarily of tech start-ups and venture capitalists. SVB was the largest US bank to fail since the Global Financial Crisis (GFC).

SVB’s USD 212 billion worth of assets was loaded disproportionately with long-term government bonds and asset-backed securities rather than loans, which meant that SVB took a very large (and, it turns out, unhedged) bet that interest rates will stay low. The bet went badly when the value of their bond holdings crashed after the Fed raised policy rates, the fastest in four decades, to fight inflation.

Concerns of a wider-spread contagion gripped global markets, with the fall of SVB sparking comparisons to the collapse of Lehman Brothers in 2008, the precursor to the biggest financial crisis since the Great Depression.

We, however, argue that SVB’s failure is an idiosyncratic stress event, driven by aggressive interest rate risk-taking and the mismanagement of this risk by a large but still niche bank. It’s not a global-level systemic crisis event that would undermine financial systems across the world the way Lehman Brothers did.

Here’s why:

1. The underlying cause of the GFC was the exposure of very large global banks to mortgage-backed securities tied to subprime, very low-quality housing loans, which collapsed in value. These major banks then had extensive exposure to one another. The closure of one of the main players, Lehman Brothers, rippled across other major financial institutions. This is not the case with SVB, which placed the bulk of its sizeable deposits into risk-free and very liquid government bonds. So even if all the bonds of SVB were sold all at once, there wouldn’t be a fallout in value, unlike the sub-prime mortgage-backed securities in 2008.

2. Despite its large asset base, SVB is still a niche bank, not the global financial behemoth that Lehman was. Based on a report of JP Morgan Asset Management, SVB only had 16 domestic branches. It more than quadrupled its deposits in the past five years as the bank of choice for startup tech companies and the rich venture capital firms in Silicon Valley that funded them. Around 93% of SVB’s deposits were from corporations, not individuals, and 84% of these deposits were well in excess of the USD 250,000 limit insured by the US Federal Deposit Insurance Corporation (FDIC). This high concentration of depositors in the same sector, i.e., wealthy tech companies, meant SVB was uniquely vulnerable to an old-fashioned bank run.

3.  The global financial system is much stronger than it was in 2008, thanks largely to stricter capitalization requirements and regulatory monitoring since the GFC. More important, the US government, FDIC, and Federal Reserve also acted swiftly and decisively to ring-fence any contagion effects from the failure of SVB, as well as another beleaguered bank, Signature Bank, and restore confidence by keeping the depositors of both banks whole and offering subsidized one-year loans to vulnerable banks to prevent them from selling securities under duress. This is unlike 2008, when everything was unprecedented, and governments and regulators had no playbook to follow.

Nevertheless, we believe that there’s no reason to be complacent. We advise against outsized bets in risk assets given the current weakness. While this isn’t 2008, we are mindful that it took several weeks after Lehman Brothers folded before financial markets fully digested the long-term ramifications.

Given the still fragile market psyche against the backdrop of a slowing global economy, we expect more market volatility in the near term and, hence, prefer to remain prudent and defensive.

RUBEN ZAMORA is First Vice-President and Head of Institutional Investors Coverage Division, Financial Markets Sector, at Metrobank, which manages the bank’s relationships with Non-Bank Financial Institutions, including government financial institutions, insurance companies, and asset managers. He is also the bank’s Financial Markets Strategist, focusing on fixed Income and rates advisory for our high-net-worth individuals and institutional clients. He holds a Master’s in Business Administration from the University of Chicago Graduate School of Business. He is also an avid traveler and golfer.

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Investment Tips 2 MIN READ


There is an incongruity in the markets pulling investors into two camps. One hews to the “fear the Fed” (FTF) camp, and the other to the fear of missing out (FOMO).

March 3, 2023By Anthony O. Alcantara

This article is exclusive to Metrobank preferred clients.

Log in your Wealth Manager account to get access to investment insights, bank views, and webinar videos.

Ruben Zamora, Chief Markets Strategist of Metrobank, believes there is a kind of exuberance in the markets today that may result in regret or grief later.

Speaking before clients in a webinar titled “2023 Market Outlook: Building Resilience. Eyeing Opportunities”, Zamora said the market expects US rates to peak this year, and investors are building their portfolios based on these expectations.

That may not be wise.

“Based on the four most recent tightening cycles,” said Zamora, “the (US) Fed kept rates steady by an average of 11 months between the last hike and the first cut. We believe the Fed will pause through 2023 to ensure lingering inflation pressures are weeded out of the system.”

His advice? Add risk tactically and rein in FOMO. A correction or steep decline in the financial markets may wreak havoc on portfolios.

Moderating pressure on the peso

Zamora said there is another theme permeating the markets: the moderating pressures on the peso in the medium term.

Rate hikes and the interest rate differential (IRD), for example, are keeping the dollar-peso exchange rate stable for now

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Investment Tips 2 MIN READ

CreditSights picks preferred sectors, what to avoid 

Building a resilient portfolio starts with a map—a map showing you the terrain that describes the markets.

February 16, 2023By Anthony O. Alcantara

This article is exclusive to Metrobank preferred clients.

Log in your Wealth Manager account to get access to investment insights, bank views, and webinar videos.

CreditSights, an award-winning global credit research provider, has identified key sectors that high-net-worth individuals may look into and what to avoid when recalibrating their bond portfolios.

In a recent webinar organized by Metrobank for clients, Sandra Chow, CFA, Co-Head of Asia Pacific Research at CreditSights, said certain sectors covering US and Asian sovereign bonds may likely outperform.

She said a list of preferred sectors from CreditSights’ US strategy team included large banks, financial services, basic industry, and telecoms for US investment-grade credits. As for US high-yield credits, they have identified energy, healthcare, leisure, telecoms, and transportation.

“Of course, even within these recommendations there is a lot of nuance and differences between certain credits, so for individual company recommendations we would need to have a more detailed discussion,” she said.

“Bumpy landing”

“Our base case assumption is a ‘bumpy landing’ for the US investment grade and high yield markets,” she said. “Under this scenario, we expect the US IG index to tighten t

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Investment Tips 1 MIN READ

2023 Market Outlook: Building Resilience. Eyeing Opportunities. 

If you want to build a resilient portfolio this year, you can get some ideas from our experts and partners whom we’ve invited to talk in our recent webinar.

February 10, 2023By Anthony O. Alcantara

This article is exclusive to Metrobank preferred clients.

Log in your Wealth Manager account to get access to investment insights, bank views, and webinar videos.

How do you diversify and build a resilient portfolio that generates steady, long-term returns? How do you manage risk and prepare for volatility in the markets in 2023?

In a recent webinar titled “2023 Market Outlook: Building Resilience. Eyeing Opportunities”, our top experts from Metrobank and our credit research partner, CreditSights, attempted to answer these questions. They shared their recommendations with our high-net-worth clients, too.

Get to know Sandra Chow, CFA, Co-Head of Asia Pacific Research at CreditSights, and learn about the prospects for global credit this year. Ruben Zamora, First Vice President and Chief Markets Strategist of Metrobank, also presented three themes that will guide you in pursuing opportunities tactically. For his part, Marc Bautista, CFA, our Vice President and Head of Research, revealed his economic outlook for 2023.

Along with our speakers, our panelists, which included Fernand Antonio Tansingco, CFA, Senior Executive Vice President and Head of Financial Markets Sector of Metrobank; and Ricardo Pedrosa, Senior Vice President and Head of Institutional Sales of Metrobank, also offered their insights in the Q&A.

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Investment Tips 3 MIN READ

Will we have better prospects in 2023?

With the year about to end, investors are asking if there will be more of the same things next year – more rate hikes, more inflation, more supply chain woes, and other hindrances to growth and prosperity. Here’s what our research and investment team at Metrobank has to say.

December 15, 2022By Anna Cudia, Ginny Pecaña, Emuel Olimpo, and Jon Munsayac

This article is exclusive to Metrobank preferred clients.

Log in your Wealth Manager account to get access to investment insights, bank views, and webinar videos.

After the heightened risks this year because of soaring inflation, rising interest rates, war between Ukraine and Russia, and still ongoing COVID-19, among others, things are looking bright in 2023 for emerging markets.

We see three factors that may lead to a comeback for emerging markets next year, particularly for the Philippines: fading global risks, less aggressive monetary tightening, and strong earnings fundamentals.

All these point to a rosier 2023 despite some volatility.

Waning risks

The risks which caused the highly volatile markets in 2022 are expected to be carried over to next year, but with waning effect. This could lead to a bullish outlook for domestic-driven economies such as the Philippines.

We foresee US Fed rate hikes to peak in the first half of 2023 and cuts implemented beginning in the fourth quarter.

As for the power crisis in Europe, gas storage is already at 87% as of December 12, 2022, versus the target of 80%. We also see US oil production normalizing next year, with global demand slowing amid recession fears.

Global commodity prices have also declined since the start of the Russia-Ukra

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Investment Tips 1 MIN READ

Portfolio Management: Balancing short-term and long-term through laddering

Short-term and long-term investments have their advantages and limitations. How do you get the best of both worlds?

December 7, 2022By Daniel Andrew Tan

Is it really possible to get long-term rates with short-term investments?

Let’s find out. When considering the tenor (length of time to maturity) for a potential investment, we often ask ourselves two things: “How long before I might need the money?”, and “How much more do I gain from investing long-term versus short-term?”

The first question is rather straightforward, but is often followed by “what-ifs”. What if a good opportunity comes up? What if I’m faced with an emergency? These concerns (all very valid) tend to push us toward the shorter tenor placements. Why? Any time there is uncertainty, we want to remain liquid, hence the old adage, “Cash is king”.

The second question usually gets us to consider longer-tenor investments. That’s because under normal circumstances, long-term investments will outperform short-term placements. The higher interest rates are meant to compensate for the added risks of locking in longer.

So, how do we get long-term rates while keeping our portfolio relatively liquid?

The right strategy

We can do that through an investment strategy called “laddering”, where maturities are staggered across different periods in the future. For example, instead of investing in a single 5-year security, we can instead invest in three different securities maturing in 4, 5, and 6 years from now.

This gives us almost equivalent interest rates while also adding liquidity and flexibility to our portfolio. In three years’ time, we will effectively have annual investment maturities that are giving 5-year rates.

Do this frequently enough, and our portfolio should look like this:

“Laddering” can be used to schedule the maturities of your investments over time, balancing returns with flexibility and liquidity.

It looks plain enough, but assume we booked all of the investments 4 years prior. Then the year 1 maturity should be giving 5-year rates, year 2 gives 6-year rates and so on. Furthermore, the portfolio has maturities each year, giving the option of reinvesting (ideally in the long end to keep yields high) or utilizing the funds elsewhere as needed. These are the main advantages of adopting this strategy.


It all looks good, but laddering also has some trade-offs. It requires a higher overall investment capital than you would otherwise need, since each placement will need to clear minimum investment requirements depending on the type of security. This makes it either difficult to implement in full, or entails a gradual build-up over time.

Secondly, laddering also requires sufficient planning before it can be properly implemented. It involves timing placements according to one’s needs as well as the interest rate environment at the time of placement. While it offers significant yield benefits, it requires a more active approach than some may prefer.

Bottomline: Laddering is definitely a viable approach to enhancing your fixed income portfolio. Should you choose to implement it, the best time to start would be when rates are already high.

Plan out your maturities according to projected funding requirements first, then just spread out your placements to maintain flexibility and enhance yields. As a general guideline, keep maturities short in a rising rate environment, and tranche in longer as rates peak and start to fall.

(If you are a Metrobank client, you may reach out to your relationship manager or investment specialist to know more.)

DANIEL ANDREW TAN is a Relationship Manager for Metrobank’s Private Wealth Division, whose function mainly involves providing investment and wealth management advice to the Ultra-High-Net-Worth Individuals (UHNWI). He brings with him over fifteen years of experience in both retail banking and financial markets, and he avidly monitors Philippine equities. He applies both active and passive investment strategies to his personal portfolio and strongly advocates for a “tailored” approach to investments.

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Investment Tips 2 MIN READ

Why become a QIB?

Being a QIB (Qualified Individual Buyer) can give you the full advantages of being a savvy global investor. You will have almost all the investment options available to any high-net-worth individual anywhere in the world.

October 14, 2022By Anthony O. Alcantara

The curious acronym is pronounced “quib”. It means Qualified Individual Buyer or Qualified Investor Buyer. And if you are a high-net-worth individual, it may be a good idea to consider being accredited as a QIB by Metrobank.

Asked why being a QIB matters, Jennifer Tan, Metrobank Private Wealth Department Head, said, “If you qualify as a QIB, this means you are a more sophisticated and astute investor who possesses the knowledge and the means to invest prudently.”

That’s because being a QIB opens a world of investment opportunities.

If you are a QIB, you’ll be able to invest in almost everything available to investors globally.

Tan said the value of being a QIB becomes apparent when the investor, for example, realizes he couldn’t invest in, say, bonds issued by a bank in Korea, such as the Export-Import Bank of Korea, which is way bigger than banks here in the Philippines. (See our top picks for bonds on our bonds page.)

“If you see opportunities like that, you can go grab them, if you are QIB,” said Tan.

But just as important as the opportunities is the trusted advice of Metrobank’s experts and third-party research providers such as CreditSights, an award-winning global credit research firm owned by the Fitch Solutions Group. (Learn about CreditSights’ four lessons for 2022 here.)

How to become a QIB

There are two ways to become accredited as a QIB: have a net worth of at least PHP 30 million or stock-listed securities of at least PHP 10 million in market value. Proof of trading must also be presented, i.e., two to three buy and sell transactions a year.

The accreditation is done every three years and the QIB client must meet the criteria stated above and execute the required two to three buy and sell transactions annually.

“Managing your wealth can indeed be much easier when all the options for investments are available to you,” said Tan. “When you complement that with expert advice backed by extensive experience and rigorous research, you’ll have everything you need to make smart investment decisions.”

ANTHONY O. ALCANTARA is the editor-in-chief of Wealth Insights. He has over 20 years of experience in corporate communications and has a master’s degree in technology management from the University of the Philippines. When not at work, he goes out on epic adventures with his family, practices Aikido, and sings in a church choir. 

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