THE current health crisis has brought about fear and doubt in the investment environment, and with good reason. We have experienced huge market declines and continue to struggle with uncertainty as economists assess the magnitude of the impact of the COVID-19 pandemic on the global economies.
As the COVID-19 pandemic and the implementation of the Enhanced Community Quarantine continue to change our lives, BPI Asset Management and Trust Corporation (BPI-AMTC) responded by keeping the organization visible, available, and accessible. It has been conducting a weekly webinar (online real-time seminar) to keep its clients informed of the financial markets and to advise them on how to navigate their investments in these crucial times.
BPI AMTC has organized five webinars since the start of the Enhanced Community Quarantine. The weekly webinar series, entitled “Investing in the time of COVID-19”, has reached an audience of over 4,000 clients from all over Metro Manila to as far as Pampanga, Baguio City, and even overseas. From this live interaction, clients shared a common sentiment – what is the next step for investing?
The COVID-19 pandemic has thrown markets into a frenzy and there will continue to be more uncertainty and volatility. BPI AMTC’s head of Credit and Research, Carlos Jalandoni, and BPI AMTC’s head of Investment Solutions, Allen Martin Dee, have one simple advice – stay calm and stay invested. They opined that investors must ride out the volatility and one’s investments will pan out in the long term as corporations continue to have strong balance sheets, as the banking and financial sector remains healthy, as the debt levels remain low and as the government continues to be able to offer support through its fiscal package.
BPI AMTC anticipates that Philippine GDP will accelerate in the latter part of the year, although the combined impacts of the Taal Volcano eruption in January coupled with COVID-19 will bring it down for the rest of the first half. However, if the virus continues unabated into the second quarter, it could effectively write off the rest of 2020.
One can consider investing in longer duration bond funds as they have good prospects in the medium term. Global central banks will be cutting interest rates just as they did during the 2008-2009 global financial crisis. The COVID-19 pandemic will cause us to hit a rough patch, with the likely possibility of a recession, both domestically and globally.
BPI AMTC advises its clients to keep their eyes wide open for the evolving risks while simultaneously looking out for investment opportunities. Under these extraordinary times, it is prudent for investors to set aside a cash buffer to meet their basic expenses for a certain period of time and for any unforeseen circumstances.
For investors who have investible funds, with multi-year investment horizon, and the ability to tolerate market volatility, our advice is to gradually add position as the opportunities arise. Take on risks in your portfolio as now is the best time to start cost-averaging. Be on the lookout for liquid fixed income assets and bond offers from the governments which come with a sovereign guarantee.
A multi-currency investment portfolio would also be a good bet as a means of spreading your risk. The nature and magnitude of the crisis today is something that mankind has not encountered in recent history. We remain hopeful that over time, this crisis will also pass.
BPI AMTC, a stand-alone trust corporation and a wholly owned subsidiary of the Bank of the Philippine Islands (BPI), ended 2019 with R730 billion in assets under management (AUM), and registered a record growth of 24 percent year-on-year and approximately seven percent growth for the past five years.
BPI AMTC was named the Best Asset Manager for 2019 by International Finance magazine for the third year in a row. President Sheila Marie Tan said the prestigious recognition “is a testament to our competence in achieving our objective of helping Filipinos with their financial goals in the most efficient and strategic way.”
BPI AMTC’s Board of Directors include Antonio Jose U. Periquet, Chairman; Cezar P. Consing, Fernando Zobel de Ayala, Mercedita S. Nolledo, Rebecca G. Fernando, Jesse O. Ang, Maria Dolores V. Yuviengco, and this writer, Directors; and Sheila Marie U. Tan, President.
BPI AMTC’s Senior Management is made up of Sheila Marie U. Tan, President; Smith L. Chua, Chief Investment Officer and Head of Investment Management Division; Yvette Mari V. de Peralta, Head of Clients Segment Division; Marijoy Y. Kawpeng, Head of Strategic Planning and Marketing; Marie Paz A. Garcia, Chief Risk and Compliance Officer; and Ronald Bernard P. Bello, Head of Operations and Technology and Project Management.
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