Pinoys urged to stay liquid amid 2009 uncertainties

MANILA, Philippines - After the excesses of the Yuletide season, experts in the financial markets are hoping food is not the only "leftover" in the Filipino household in welcoming 2009. While spending provides a boost to the economy, experts advise keeping as much cash as possible to weather the uncertainties of the year. "Considering that 2009 is expected to be a slower year, you really have to stay liquid. Cash is king," First Grade Holdings, Inc. Managing Director Astro del Castillo said in a phone interview. The Philippine economy is expected to grow 3.7 percent to 4.7 percent in 2009, slower than the projected growth of 4.1 percent to 4.8 percent in 2008. Inflation, which has an immediate impact on the consumers' pockets, is expected to range from six percent to eight percent this year. This range is lower than the nine percent to 11 percent projected for 2008 and higher than the 2010 target of 3.5 percent to 5.5 percent. Del Castillo said those who have money left after the holiday spending can park their money in time deposit or special deposit accounts, which may yield interest rates higher than the projected inflation. More sophisticated investors who have studied the equities market well may opt to start picking on stocks which are currently trading at bargain prices after the sell-offs in 2008. Those who are looking for quick and easy money, however, may have to look elsewhere as del Castillo said the stock market is expected to remain weak in the first quarter. "If you have leeway, you can accumulate slowly. It is really time to buy products like mutual funds because it is expected that by 2010, we'll see better financial markets," del Castillo added. Entry-level investors can start trading at the Philippine Stock Exchange through accredited brokerage houses for at least P25,000. Those who want to invest in mutual funds can open accounts for as little as P5,000. For those looking at currencies as an option, the Philippine peso is expected to continue sliding especially after the remittance period spurred by the Christmas season. The peso depreciated by 13.3 percent in 2008 as it closed at P47.52 on December 24. A Manila-based trader said the local currency could trade within the range of P45 to P50 against the dollar in the first quarter but its movement would be mainly directed by developments in the international markets. "It would be externally driven, depending on what happens in the United States, the dollar's strength, and the bailout plans," the trader said. - GMANews.TV