Question:

I am one of the many readers of your books. I don’t regret of having bought your book since it gives me insight on how I can save for my future.

I am an ordinary employee working in a sugar factory in Negros Occidental. I wanted to start my saving in mutual fund but as I inquired from my bank, which is one of the biggest banks in the Philippines, they told me its a risky investment and its only good for big businessmen with big capital.

These had bothered me, as in your book an ordinary person can invest in a mutual fund for as low as P5000. This prompted me to ask help from you, what investment instrument requires a small starting capital?

Franciso Colayco:

Unfortunately, your Bank contact person does not even know that one of the companies affiliated with their bank has mutual funds and accept a minimum of P5,000 as an initial investment. Certainly, P5,000 can be a big amount for the ordinary income earner but definitely this is a small amount for the big businessman with big capital. Why should a mutual fund allow a minimum of P5,000 if mutual funds are only for big businessman?

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Guys, check this out.  June 2008 inflation rate in Philippines highest in 14 years reach 11.4%!

MANILA, Philippines—The prices of services and goods consumed by an average Filipino household went up by 11.4 percent in June from a year earlier—the fastest rate recorded in 14 years—due largely to the substantial increase in the cost of rice and other food products, the National Statistics Office reported Friday.

The price of rice soared by 43 percent because of growing demand and increased costs of inputs. This means that the rice a consumer bought for P100 in June last year may be had for P143 last month.

Prices of food products included in the Filipino consumer basket rose by 17.4 percent. This means food products that had cost P100 in June last year, cost P117.4 last month. (complete report)

This is the reason why I don’t prefer time deposit.  Why?  If you’ll put your hard-earned money in a normal time deposit in Philippines banks that have 4% interest per year and compare it to the inflation rate trend which is now 11.4% then its very clear that you are lossing - you are behind 7.4% its actual spending power.

Now it is very clear. If you still prefer time deposit then go for a bank that offers a time deposit rate higher then 13% per annum.

Just to make a very quick post about the SSS online inquiry system. In case you are not aware yet, you can now inquire your SSS static information or premium contribution online. Now even if you are outside Philippines you can see your social security system data by simply logging on to the www.sss.gov.ph online inquiry.

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