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How do we best manage our finances during this challenging time? 

With the current situation we are all in now, it’s a good idea to evaluate. We have rounded up 5 personal insights as shared by our very own FVP, Head of Special Markets and Training Unit Dr. Edwin Valeroso on what we should be doing and how we should do it:

  • This is a good time to check our finances by looking at our personal or household assets and liabilities. We do it by enumerating all our assets and liabilities, putting numbers on them (as accurately as we can), and deducting our total liabilities from our total assets. With the resulting figures, we can answer the question: “Do we own or do we owe?”.
  • Next, we can also review our budget to check if we are overspending. We are told to spend only on necessary or essential things. This is a good time to honestly examine ourselves; which among our expenses are “needs” and “wants”.
  • The importance of emergency funds cannot be over-emphasized these days. For those who have already set this up, should have relatively more peace of mind. As we all know, and as others have advised, the size of this fund should be equivalent to three (up to six months) of our monthly expenses. A number of people I know built this fund by regularly setting aside a portion of their income in savings accounts and other liquid instruments like money market funds.
  • Almost all markets are down including the Philippines. In my opinion, for those who are already invested—I suggest that they don’t sell; but should stick to their investment objective.  I would take this very rare opportunity to invest in any of our equity laced funds, which are very cheap where it stands right now. These funds are expertly managed by our professional fund managers which is very critical during times of volatility and uncertainty. For those who have no expertise and experience choosing direct stocks, I would seriously advise investing in our index funds – Save and Learn Philippine Index Fund (SALPHIN), First Metro Consumer Fund (FMCF) and the First Metro Philippine Equity Exchange Traded Fund (FMETF). I admire those who have been doing this on a regular basis– like a monthly investment program for employees (an application of peso-cost averaging) because they are able to buy more shares of the Fund due to low prices (NAVPS or net asset value per share).  These three (3) FAMI managed funds invest in the top 30 companies in the Philippine Stock Exchange Index (PSEi) so when the market recovers these stocks will certainly recover hence showing better returns for the fund. 
  • We also have a great opportunity to average down. This is similar to peso-cost-averaging since it’s not done on a regular basis. If you look at our FAMI managed funds right now many of them have low NAVPS. For a medium to long term investment time horizon, you will never go wrong coming in at these price levels, even if prices still go down some more. In the end, you will come out a winner because you achieve your investment goal/s. I also advise people to maintain their insurance, especially medical insurance which are very important these days. This is a good time to ‘sharpen the saw’. We have ample time these days to take those short courses that we purchased, read those books and other materials that we bought (like improving our skills set), how to have other sources of income, doing household and personal budgeting. 

The above financial pieces of advice reflect my personal view and opinion, but more importantly, this is a good time to share and offer our help (financially or otherwise), to connect or reconnect to our loved ones—relatives and friends- who are also at home with us or through social media. On top of these all, this time is the best time to connect, to re-connect or strengthen our connection with God.

All the best to everyone! STAY HOME and STAY SAFE!



Edwin B. Valeroso, PhD is currently the FVP of First Metro Asset, and has over 25 years in asset management experience. He is also the President of Capital Markets Institute of the Phils. (CMIP) and heads the Educational Committee, and acts as a Corporate Secretary at the Philippine Investment Fund Association (PIFA).


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