Your Financial Literacy Advisor

Updated last 06 January 2017; 10:36PM

By viewing this blog, you want to educate yourself about basic personal finance. I hope you will maximize and understand the concepts that I shared to improve your financial condition. It was made in such a way to teach everyone from any educational background.

I constructed this blog in an inverse pyramid structure (inductive reasoning). It started with a simple idea of how do we end (1st article) and ended up discussing methods of how do we make our lives better by means of financial literacy. Read how my logic works and to better appreciate my blog you should read chronologically in the following order:

Table Setting: Correct Mentality

  1. How do we end?
  2. Tweaking the Old Practice: Saving Money!!!!          
  3. Where should I place my Money?
  4. How Money Works?
  5. Whole Picture: Magnified and Simplified
  6. Expense/Income Monitoring Template


Stock Market Investor’s Guide:

1. Overview of the Philippine Capital Market: Stocks and Bonds Market
2. Background of the Philippine Stock Market
3. Analysis of Publicly Listed Corporations; and
4. How to invest in the Stock Market?

Trading Strategies

  1. Ignore Cubes Doctrine

The author would like to thank the readers. I will continue on learning new financial products and will share the same in this blog. I hope you will appreciate it, because if you do, you are really interested in improving not only yourself but also your family’s welfare.

There is no perfect time of learning this stuffs but now! Don’t procrastinate. Just read it.

If you learned something from my blog, pakishare naman po  sa kahit anong social media

Appreciated that if you do and thank you!

Your Financial Literacy Advisor,

Efraim C. Osingat CPA, BSMA

Ps. Best viewed in laptops and desktop computers.



Where should I place my Money?

After training yourself with the concept of “paying yourself first”, the problem now that you encounter is “where do I place my savings to obtain maximum returns?”

In this article I would like to set the outlook of where you should place your savings from paying yourself first. My next articles will focus more on the technical part of having excess money: whether to invest in a bank or whatsoever investment vehicles.

Just to refresh your mind: At least 10% or 20% of your income should be “paid to yourself first” without regard to your financial status. You should think that this is required by a law to oblige yourself. Absence of decisive #Balls, savings is impossible! *Note1

Where can I place my savings to maximize returns?

Just to summarize: you can place your savings in the following sequence*

  1. Invest in yourself first;
  2. Invest in life insurance; (Sunlife: VUL; Kaizer; Pru-Life UK; Insular Life)**
  3. Make an Emergency Fund;
  4. Pursue your short- term goals;
  5. Pursue your medium term and long term goals.

*Note: This is the priority list, follow the sequence.

** Note: I can refer you to someone if you want to get life insurance. Just message me here or on facebook.

  1. Invest in yourself first

I believe that if you will continue saving at least 10% or 20% per cut-off, time will come that you will have too much money at your disposal. I suggest that before you invest your money at anything: life insurance, mutual funds, Unit Investment Trust Fund (UITF), Variable Life Insurance (VUL), bonds, time deposits, money market placements, foreign exchanges, real estates, income generating units and even in the stock market, you should invest in yourself first. Again, what do I mean? Again, I will be discussing this investment vehicles in future articles.

I believe in investing to one’s self before investing in other investing vehicles. Investing in one’s self is the best way to increase cash flows. Example, I am a Certified Public Accountant (CPA), being a CPA alone, due to stiff competition and market saturation of qualified CPAs, does not make me significantly different with other CPAs (here in Metro Manila) unless I got something that others do not have. These could either be additional title like Master’s in Business Administration (MBA) or becoming a lawyer and other certifications: Board of Accountancy (BOA) accreditation, Bureau of Internal Revenue (BIR) accreditation, Registered Financial Planner (RFP), Certified Fraud Auditors (CFA), Certified Internal Auditors (CIA) and others.

Another example is that, you can learn whatever it is under the sun that you desire to learn. You should follow your passion, you should follow your heart. That is what you called, “living”. If you were forced to go to education focusing on a different path other than what you desire, then persevere and pursue what you want to do, but remember, “cost-benefit analysis”. In everything that you pursue, remember that the benefit that you derive out of what you do should and must exceed the cost of doing the same. Otherwise, you should have not done it in the first place, unless you wanted to burn your hard earned money. Consider also other circumstances such as age, environment, political atmosphere and others.

If however, you have no inclination to learn new about anything that will give you more in this life, then, go look for something to learn. I believe that there really is something that will excite your senses that you yourself is so interested. Hindi pwedeng wala.

The rationale of investing in one’s self is:

  1. By investing on your own further education, you are preparing yourself to a higher responsibility. Heavier weight of responsibility comes in tandem with greater compensation package, if employed, and greater market share or market coverage, if doing a business; and
  2. It is better to increase your value to receive more income than trying to squeeze your already tight budget (you know what I mean).


  1. Life Insurance

If the amount you save exceeds the cost of your personal improvement thru investing in yourself (further education, training, certifications and seminars), then the excess money should be used to purchase life insurance. See my article about “how do we end?”.

As mentioned in my article (How do we end?): treat everyday as bonus, be thankful not in your 40th birthday, not in your retirement but be thankful from day one (1), from the time you wake up in bed and the up to this time that you are breathing air to live.

Life insurance is a tool that will aid you and your loved ones to recoup with your (knock on wood) unexpected and untimely perish. Well, no one can predict his/her own death. It is better that we insure ourselves for the protection of our dependents. You may not have a dependent now, but sooner or later you will have one, not to mention your immediate family, they are already part of your dependents.

  1. Emergency Fund

Do not underestimate the power of having an emergency fund. In a world where the only constant as they say is “change”, you need to have protection. Like our life insurances, emergency funds serve as your buffer for any unforeseen events that may come.

I’m serious about having an emergency fund. With all of the negative news in our country, the only protection we can afford is to have at least six months of your savings to counter any vulnerabilities: automation of jobs, reorganization of corporations, accidents, typhoons, and any other fortuitous events that you think are far from actually affecting you and your family but there is a possibility of its occurrence. Since, there may be a possibility, then, the only way is to equip yourself with such fund.

Emergency funds, may be put in the bank or even under your bed, whichever is most convenient to you, as long as it can be withdrawn at anytime. Having an emergency fund is better than seeking financial help from other people or worst, seeking loan from banking institutions where interests are being charged not to mention the long processing time and strict documentary requirements for approval.

  1. Short-term goals

“I am perfectly aware that as of this period, you may not have a sufficient income to cover both your investment to yourself and to cover the amortization of the life insurance because you are just starting with your career or maybe you are being affected by economic downturn. *Note 2

Don’t worry, do not push yourself too hard. The important thing about this practice is that you already know your direction. You perceive the necessity of it and that you are willing to work for it, to allot money for it and to be able to execute it someday.

However, if you still have money left out of your 10% or 20% payment to yourself, you can still allocate some money for your short-term goals.

I leave to you your personal classifications of your goals in life. I know that we have different and distinct goals in life which is affected by our disposition in this society, age, sex, religion, and other circumstances.

For me, I am saving for the following short term goals:

  1. Marriage;
  2. Car; and
  3. Travels.
  1. Medium Term and Long-Term Goals

It includes acquiring house and lot (family home), investing in long term investment vehicles, funding educational plans for your future kids, preparing for future health care after retirement, preparing sufficient cash for life after retirement, and settling outstanding debts incurred and trying to live beyond 60 years old. You need not worry, another article involving this investment vehicles will be done. “simpleng simple lang”

As I wrote in my article “How do we end?” we must be thankful from day one (1) and not just after we lived beyond retirement age of 60, or age 40, or age 50. I have to mention that one of our supposed long term goals should include longevity of our lives. We should aspire to live beyond 60 years old and not just to live with a complacent lifestyle and a come what may attitude, for it will surely have a catch on our body in the later part of our lives. Absent the gun for hires, we should learn to help our body maintain a healthy meat suit to enjoy retirement without being in a frail condition. *Note 3

It is noted that the average life span of Filipinos is 65 for man and 72.5 for woman as per World Health Organization published last May 2014. It is very short indeed, but if you have lived your life in contentment and happiness, then it is equivalent to living a life in heaven here on earth and age 65 would not be classified as a short lived life at all.

*Note 1

“When you feel down or you pity yourself because you are depriving yourself of the luxury of spending your money into petty expenses. You should think about what you are saving for. Remember that as payment to yourself you should be responsible in planning for yourself. You should think about learning to focus on what you want to achieve with your attempt to save money. Yes! the “memory” that you are saving for is much worth remembering rather than spending it on your usual expenses. So, just keep on saving!

Example: Give up your daily consumption of sweetened beverages, instead save it and place it to any investment vehicle that you may use when the need arises: marriage fund, car fund, whatever fund. The “memory” that you’ll experience in those special events are worth million times than just spending it to usual beverages. In addition, if you will not give up that beverage, it will end up to your fats.

*Note 2

Personal Note:

I feel the pain of having a limited income to cover both my further education and at the same time, paying for my life insurance. However, despite my limited budget, I am optimistic that by at least knowing what to prioritize, I know that someday I will achieve my goals whether they maybe for the short-term, mid-term or long-term. That applies to you too!

*Note 3

Personal Note:

I am quite guilty of this fact, I know I have a problem but I’m so industrious in procrastinating the solution. I was once at the weight level of Manny Pacquiao in the Super Featherweight Division at 130 pounds back in college CY 2005, but now, I’m at the Light Heavyweight Division at 180 pounds. Damn! Right. I guess, I lack #Balls in prioritizing my health as I make my pursuit of higher education an excuse to feed myself even more. I find comfort with the stress at school and work as an excuse of eating more, which I know is wrong for my overall health. I am aware of the problem, but I’m so numb of it that I am willing to just live with it. Well, I am fortunate though, that by writing this blog, with you reading this, I am thinking that I should as well do something about my weight problem who knows I might be able to write a blog about losing weight right? hehe. Gonna practice what you preach yo!






Tweaking the Old Practice: Saving Money!!!!          

How can you save money?

Saving money is such a difficult task. Even professionals are having difficulty in committing to the discipline of saving money for future needs. Saving money requires #HardBalls to make it happen and requires religious compliance. So, the question is, simply, how can we obligate ourselves to save?

Saving money can be done through “paying yourself first”. Huh! What do I mean? Simply stated, consider yourself as your own employee and thereby you are required by Philippine law or whatever law to pay salary to yourself. The payment of which can be 10% or 20% depending on your personal circumstance.  Without regard to the amount of your pay check, whether you are earning huge payload of money or let’s say just enough to get yourself survive everyday, you are still required to pay yourself first. You can further squeeze your budget to be compliant with the mental practice of saving money.  You can follow the formula as a tool to oblige yourselves.

The formula is as follows:

Income – Savings = Expense

  1. Income = includes all revenues actually received: bonuses, thirteenth month pay and other monetary income received; *Note1
  2. Savings = this is considered your salary as an employee of yourself (you should believe it and comply with this obligation to become effective); and
  3. Expense = try what others call “Living below your means”, it actually can make a positive change to your cash flows.

Said formula is an illustration of how you should prioritize yourself as an employee. You should first pay yourself before paying for other payables or expenses as necessary.

To monitor your expenses you need to monitor your daily expenses. You can use excel file to monitor your expenses. I will be sending in the future, a link, to show how you can do it.

With this mentality and constant employment of the same, you’ll be able to save money to satisfy your goals in life. I believe that in everything we do, it requires a clear line of thinking that we ourselves respect and oblige to follow.  

Mental practice: example

I am dependent to the constant use of elevator in going to my office table. My office is in the 4th floor of a seven (7) story building. Ever since I started the job a year ago, I often use the elevator in reaching my office space. But at least three (3) weeks ago, I chose to use the stairs rather than the elevator. Nowadays, I don’t even try looking at the elevators first, I, out of my muscle memory, seek for the stairs. At first, it was difficult, it was painful to my legs and thighs but after one (1) week, it felt better up to this 3rd week. I am now feeling healthier because of my constant mental practice of going up and down the stairs. I noted that using the stairs, I’d be able to reach my destination faster without waiting to the queue of the elevators. This is analogous with money saving. At first, you will have resistance within yourself, you will even try to have a debate with yourself whether to spend it or not. Trust me when I say, stick with the law, “pay yourself first”. Pay yourself first or else you’ll be sued in court for non-payment of a hardworking employee. Saving your salary as an employee of yourself can be used as a tool to escape “Rat race”. *Note 2″

Saving money is just a preliminary step to becoming financially independent. Saving money is not enough, you still need to equip yourself with sufficient information to make your money work for you. That is such a nice thing to hear right? You make your money work for you, rather than working hard for money. Which leads me to my next topic, “The mentality of earning money”.

After earning a significant sum of money, the next step is to where should I place my money? Stay tuned for my next blog about the difference of investing in a bank and investing in different investment vehicles.


 *Note 1    

Income from investments like the stock market, mutual funds, bonds, treasury bills, income from real estate and other forms of passive income should be reinvested into other income generating activity. You should think of them as a sibling of your initial investment. Spending them would be a crime. You should reinvest it.

*Note 2

Rich Dad, Poor Dad – Robert Kiyosaki

“If you look at the life of the average-educated, hard-working person, there is a similar path. The child is born and goes to school. The proud parents are excited because the child excels, gets fair to good grades, and is accepted who controls the past controls the future, who controls the present controls the past. into a college. The child graduates, maybe goes on to graduate school and then does exactly as programmed: looks for a safe, secure job or career. The child finds that job, maybe as a doctor or a lawyer, or joins the Army or works for the government. Generally, the child begins to make money, credit cards start to arrive in mass, and the shopping begins, if it already hasn’t. “Having money to burn, the child goes to places where other young people just like them hang out, and they meet people, they date, and sometimes they get married. Life is wonderful now, because today, both men and women work. Two incomes are bliss. They feel successful, their future is bright, and they decide to buy a house, a car, a television, take vacations and have children. The happy bundle arrives. The demand for cash is enormous. The happy couple decides that their careers are vitally important and begin to work harder, seeking promotions and raises. The raises come, and so does another child and the need for a bigger house. They work harder, become better employees, even more dedicated. They go back to school to get more specialized skills so they can earn more money. Maybe they take a second job. Their incomes go up, but so does the tax bracket they’re in and the real estate taxes on their new large home, and their Social Security taxes, and all the other taxes. They get their large paycheck and wonder where all the money went. They buy some mutual funds and buy groceries with their credit card. The children reach 5 or 6 years of age, and the need to save for college increases as well as the need to save for their retirement. . “That happy couple, born 35 years ago, is now trapped in the Rat Race for the rest of their working days. They work for the owners of their company, for the government paying taxes, and for the bank paying off a mortgage and credit cards. “Then, they advise their own children to `study hard, get good grades, and find a safe job or career.’ They learn nothing about money, except from those who profit from their naïveté, and work hard all their lives. The process repeats into another hard-working generation. This is the `Rat Race’.”

How do we end?

Physical Pain

Last 9 April 2016, I went to Philippine General Hospital (PGH) to visit my Aunt. Her name is Tita Arsenia. She is single, never been married, and she is 58 years old. She has been fighting with her aggressive stage 4 cancer “leiomyosarcoma(1)” since January 2016. My Aunt has been a domestic helper in Hongkong for about 10 years but on the aggregate as Oversees Filipino worker (OFW) for more than 20 years. Just to give you a mental picture of my Aunt, she gained weight from 65kgs to about 68kgs. Her lower extremities, starting from her tummy (bloated) going down is bulging in size (manas-in tagalog), while upper body from breast up are as skinny as an anorectic model’s body. Seeing her in that condition brought a lot of pain to us, we felt the pain she is enduring. As time pass by, her condition is getting worse. Her body is starting to get so heavy that she cannot manage to stand on her own.

Financial Pain

I was assigned by my Tita to withdraw money from her bank account to be used for her treatment. Personally, I hate it, I hate the fact that she has worked all her life to earn this money and after so many years of hard work, it will only be burned for medical expenses. We spent around 300k in the span of 2 months.

My Tita was lucky, she was able to save money. We sought help from OWWA but their help was not monetary in nature (to think that my Tita served as OFW for more than 20 years); their help is an endorsement to PAGCOR Chairman. We received a medical subsidy via our Congressman to medicines worth PhP50,000.00. It only came in after 3 sessions of Chemotherapy or about after more than a month after the start of the treatment.

If we were already in  this kind of situation. I can’t imagine how painful it is for other people who have really nothing, as in literally. Let your mental picture continue and you will eventually quit on thinking about it because it is simply stressful.

Hospice Care Provider: Doc. Rachel Rosario

Our room is located in pay ward, room 613. I was with my older brother, Belino and older sister, Maybeline at that time. My brother tried to console my Aunt by massaging her back. I was, at that time talking to my brother about financial literacy, when Doctor Rachel Rosario entered the room. Dr. Rosario is a practitioner of hospice care(2) and is affiliated with various non-government organizations (NGO) concerning with health care.

A couple of days ago, it was decided that my Tita’s 3rd dose of Chemotherapy be stopped because her body is not responsive to the drug and that it further contributed to the deterioration of her condition.

Dr. Rosario started by introducing her work as a hospice care provider. She mentioned that hospice care is provided to inform the patient and family of the do’s and don’ts with my Tita’s condition. My Tita was in a sitting position beside the hospital bed, she can no longer manage to lay down in bed because her back was aching so badly. Dr. Rosario started in the light way, she cracked a joke to my Tita. She even joked about my Tita’s condition as follows: “Ay, ang laki laki naman ng paa ninyo, ang sarap gawing unan” and laughed. I was a bit off back then, I told myself “Bakit naman ganon ang joke niya”. She shared some of her personal details in the process and it goes in this manner.

Dr. Rosario: “Noong ako’y 15 years old pa lamang, nagkaroon ako ng cancer. Akala ko mamamatay na ako. Ang pakiramdam ko nuon gusto ko umakyat sa pader para lang makakuha ng hangin kasi hindi ako makahinga”.

Upon hearing, I instantly dismissed her insensitive joke. I was lying on the bed at that time when she started sharing her experience. My Tita was in front of me. My brother was located in my feet at the end side of the bed and my sister was at my back. Dr. Rosario is located in front of my Tita and behind her were the hospital windows. As she continued her discussion I seated properly to listen because in my mind, this person is not just talking by the book, but by experience. This Dr. has experienced what my Tita is experiencing right now. She continued her story.

Dr. Rosario: “Pagod na pagod ako noon. Parang walang katapusang pagod na sa sobrang pagod, gusto ko ng matulog at wag ng magising. Umabot ako sa point na ganon. Hindi ko na kaya. May isa pang pagkakataon na parang yung kaluluwa ko ay umangat mula sa katawan ko at nakita ko ang sarili ko sa kama na nakahiga. Alam kong ready na akong mamatay.”

At this point, I remembered an episode of Supernatural wherein the mother of Sam and Dean went to the ceiling of the house and it began burning. She continued…

Dr. Rosario: “Fortunately for me, I was cured with my cancer. Nakapagtapos ng pag-aaral at nakapag-asawa at nabiyayaan ng tatlong anak.”

She even showed us the picture of her family through facebook. I added her as a friend, until now, hindi pa ako inaaacept. And then here is what struck me most.

Dr. Rosario: “I was ready to die when I was 15, but look at me, I’m old now. I am helping people, I talked to them so that they can accept what the future may bring. Ikaw, ilang taon kana? I’m 31 Doc, answered by older brother. You have lived for 31 years, you have already lived with millions of minutes already. You are very lucky. Yung iba, kahit sa kapanganakan palang namamatay na.”

“Ang problema kasi natin, we only treat as bonus in our life kapag maybe malapit na ang retirement, or kapag nareach mo na ang age of 40 or 50, nakakalimutan natin na dapat thankful na tayo dahil nakakahinga tayo at nagigising sa umaga. We should be thankful from day one”.

Dr. Rosario: “I believe that after we die we go to a special place. Hindi ba nung tayo ay ipinapanganak, we suffered from pain… sobrang sakit. After that pain, we were brought to life. I believe ganyan din ang kamatayan. We die and we go to special place that God has created for us. We should not fear death as we are already blessed that we have lived long enough. May mga iba, namamatay nalang even without the chance of saying goodbye.*

*I am not saying that we believe in her statement, but yeah why not. Who really do know what lies beyond death? No one.

At the end of the meeting, we thank Doc. Rosario for being such a great speaker. I was moved by her statements. I think my Tita also felt the same. My Tita smiled more than 5 times in the course of the meeting. I think, she had an open heart about what the future will bring her way. I also mentioned to the good Doctor that what she did for us, has a multiplier effect, for what she shared will be shared again. (As what I expect from you, after reading this post).

Two (2) days before this appointment with Doc. Rosario, we were visited by a Priest. I believed that what he performed with my Tita was called the “Anointing of the Sick.” The Priest blessed my Tita with Holy water and placed a crucifix sign using an oil to both of her hands. I really can’t help but cry when the Priest was performing the act. It is with a heavy heart that my Tita’s end is foreseeable. I hate to compare it, but Doc. Rosario’s mentality towards death and life was more i guess people friendly, because maybe she had already a glimpse of what death felt like.

As of this writing, my Tita is still fighting for her life. She is brave and courageous woman. She is principled (a cultured lady exuding Dalagang Filipina aura) and we simply love her as our own blood mother¹.

On the other hand, Doc. Rosario is looking for Cashier for her NGOs. Any recommendation?

¹My Tita, passed away last 1 May 2016. We miss you and we love you!

Moral of the Story

Death is a reality! We can die anytime.

Doc. Rosario made me realized that I have lived a long life already. I’m 25 years old (CY2016) and I’m a lucky man for I am still breathing up to period unknown. Life really is too short, it is what we do in between this short lived lives that matter. How did we prepare ourselves for our inevitable end? How about our responsibilities? Our dependents? Can they exists already without your guidance?

My only point is that, atleast whenever we die, we must atleast be prepared financially if not spiritually or emotionally. How to be prepared? Start early in saving money, investing your wealth, building a relationship with your God and family, lining up your goals, and having a succession plan. In view of this unforeseen but inevitable events in our lives, I impose this challenge upon myself to help people manage their own wealth through financial literacy. Information really is an important tool for anyone’s success. We hear people say that money is the root of all evil, but really, the truth is, we deal with money for all eternity. The manner of how we deal with it will define us if money really is evil.

While life is really short, it is important for all of us to do something that will make our short life on earth “heaven like” without being injurious to third person or property.


(1)Leiomyosarcoma is one of the forms of a very rare and aggressive cancer called Sarcoma. A sarcoma is a cancer of the connective or supportive tissues of the body. These tissues include bone, cartilage, fat, muscle, and blood vessels. The word sarcoma comes from the Greek word meaning ‘fleshy growth’.

(2) Hospice care is a type of care and philosophy of care that focuses on the palliation of a chronically ill, terminally ill or seriously ill patient’s pain and symptoms, and attending to their emotional and spiritual needs.

Ano Bear? Au-Ghost-O to Decem-Bear

Because I’m about to get older again in the same day as the State of the Nation Address (SONA) of President Du30. I was enticed to look at the past performance of Philippine Stock Exchange Composite Index (PSEi) after the 1st SONA and that is what you see below.

sONA 2017

I know some of you already know how to read charts, regardless, the chart is on a downward trend. Past performance is not indicative of the future stock prices however with the use of it, you can make a decision as to where you should peg your entry price.

After SONA, what follows is the Ghost Month (Google mo this). Stocks are “usually at sale” during this time of the year.

Whether or not this will be the trend for this 2017, who would know? No one, as in no one can predict future stock prices with 100% accuracy.


Staying long-term


Irrespective of your entry price, when you make your investment long term, aba eh you’ll be earning by way of dividends and future stock price increases, provided that you invested in a credible and trustworthy corporations.

Congrats sa lahat ng marunong ng mag-invest sa stock market. Mabuhay!



My Thesis: Financial Management Practices of Young Professionals in the National Home Mortgage Finance Corporation (Excerpt)


          It is codified in Section 9 Article 2 of the 1987 Philippine Constitution that “The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.” That being said, what bridges the acquisition of wealth from mere financial literacy that will translate to financial freedom, thus, improvement of quality of life, is the application of various Financial Management concepts in actual practice. Some people live in discomfort of poverty, debt burden, health related sickness, inheritance family feud and other problems because citizens in general aren’t informed/ knowledgeable of what they should know about Personal Financial Management or maybe they know but they are too lazy and so engrossed in procrastinating to act upon the matter.

           The researcher conducted the pioneering study in the National Home Mortgage Finance Corporation (NHMFC). NHMFC is a Government Owned and Controlled Corporation that is mandated to purchase home mortgages from financial intermediaries and real estate developers with the end goal of packaging these loans into securities to be sold to investors to be able to recycle money with the end view of producing more houses and jobs for many Filipinos. The Commission on Audit (COA) Audit Report of 2015 stated that the NHMFC was created by virtue of Presidential Decree (PD) No. 1267 dated December 21, 1977, as amended by Executive Order (EO) No. 90 on December 17, 1986 identifying it as one of the key agencies in the implementation of the National Shelter Program that was tasked as the major government home mortgage institution. EO No. 357 dated May 24, 1989 placed NHMFC under the administrative supervision of Housing and Urban Development Coordinating Council (HUDCC). The corporation consisted of 385 employees, 245 of them are regular employees and 140 agency-hired employees.

                 The study is hinged on the idea of addressing one aspect of the Fraud Triangle that is “Pressure” that contributes in the commission of employees’ illicit activities that destroys the image and coffers of the corporation.

Figure 1: The Fraud Triangle

fraud triangle

            The figure above shows the fraud triangle wherein it shows that the existence of fraud in a corporation is determined by the presence of any of its aspects i.e. rationalization, opportunity and pressure. By assessing the personal financial management practices of young professionals and by way of making corrective methodologies to such practices will help the cause of management avoid being victim of vicious employees, who have poor financial management practices in taking refuge by partaking some of the corporate assets or in contributing to the negative publicity that will cause public criticism or even disgust geared towards all the government sector employees.

              Employees seek employment with any government agencies primarily due to the security of tenure that only the government can provide. In that sense, people working in the government are the ones who are usually staying employed with the government until their retirement. Hence, in line with the government’s promotion of the improvement of general welfare of all Filipinos, it is but right that the government should promote best financial management practices among its work force. Further, when people start working for the government, they are expected to exude observance of Section 1, Article 11 of the Philippine Constitution that states “Public Office is a Public Trust”, which means that the government employees should perform their assigned job responsibilities with utmost regard to superior quality and accountability.

             As an example to the effect of a mishandled financial management practices was the incident involving Mr. Jessie Carlos who was a former employee of the Department of Finance, a government agency. On June 2, 2017, Mr. Carlos, driven by his financial difficulties, on his own, armed with deadly weapons attacked Resorts World Manila to steal valuable stuffs. The whole of Philippines and the world were shocked and angered by Mr. Carlos. His actions resulted to the premature deaths of more than 30 people, a decline to the stock price of Travellers International Hotel Group, Inc. (RWM) from PhP3.4 per share on June 1, 2017 to PhP3.13 per share on June 2, 2017 or a 7.94% decline in one day that translated to around PhP23Mn net foreign selling and that worst part is that the name of Department of Finance (DOF) which was, to the author’s belief, should not even be part of the news, but it was mentioned as if Mr. Carlos is still connected with them, which leaves a cloud as to the participation of DOF in the transformation of Mr. Carlos.

            It noteworthy to mention that the objective of the author’s thesis is to determine the current personal financial management practices of young professionals in the National Home Mortgage Finance Corporation and to make some recommendations as to how to improve upon these financial management practices. The recommendations of this paper may also be used by the whole of the government sector so as to address the relentless presence of “Pressure” as mentioned in the fraud triangle and to promote the social welfare via promoting the best practices in the personal financial management amongst government employees.


           Most of the respondents were female, single, college graduates, earning an average net monthly income of PhP20,000.00 and below and NHMFC outsourced Employees.

     The respondents perceived that the level of effectiveness of the Financial Management practices of the young professionals in the National Home Mortgage Finance Corporation (NHMFC) was “Somewhat Effective” in terms of Risk Management, Educational Planning and Retirement Planning; while “Effective” on Personal Financial Management.

      The researcher concluded that when respondents were grouped by civil status, highest educational attainment, average net income, and employment status their assessments had significant difference on their financial management practices. Furthermore, when grouped by average monthly net income and highest educational attainment, their assessments were different on Financial Management which included Personal Financial Planning, Risk Management, Educational Planning and Retirement Planning. When grouped by employment status, there were significant differences in their assessments on the Personal Financial Planning, Risk Management and Educational Planning.


         The researcher recommends that financial literacy seminars, trainings, capacity building or workshops should be held on a continuing or cyclical basis and should talk about the following Financial Management concepts: (i) creation of comprehensive financial plan that covers all the aspects of Personal Financial Planning, Insurance Planning, Investment Planning, Tax Planning and Estate Planning; (ii) time value of money, the effect of inflation and the effect of taxation; (iii) different investments with the corresponding risk and returns and including the discussion on risk diversification; (iv) insurance products, educational products and investment products; and (v) methodology of lawful last will and testament and the importance of creating it.

          The management should review the possibility of absorbing some of the outsourced employees or promoting some of the low rank and file regular employees who are exercising a great degree of responsibility in behalf of the corporation in their job performance. The corporation should consider absorbing as organic employees those who are handling intricate data and processes in behalf of the corporation.

       The management should likewise review the current laws that might not be properly implemented by the corporation.

   Young professionals should already start with saving or allocating or investing money/funds for their future offspring.

    Future researchers may conduct the research in another type of businesses, age bracket, and industry. It is also recommended that future researchers study whether or not there is a significant difference in terms of Financial Management practices depending on the nature of the industry or line of business of young professionals.


  1. COA Audited Report 2015



Expense/Income Monitoring Template

Happy new year!

As promised, please see attached excel file that you can/may use to monitor your daily expenses and all income. In business parlance, relevant information (such as derived from the link below) is vital to enable the management to make sound and informed decisions. This principle is likewise applicable in your personal finance, moreover, having relevant data are deterrent to yourself or to your spouse in committing something that is detrimental to your budget. For couples, it is important that proper disclosure of all income sources be reflected to make it a success.

Be your own FINANCIAL ADVISOR! The best day to start monitoring your finances is #Today!

For your reference. Edit as you may. The link is as follows:





The Ignore Cubes Doctrine

A bearish Philippine Stock Market in the coming months, here is what you can do:

  1. Exercise the doctrine of ignore cubes;
  2. Cut loses already: “sell the stocks held”;
  3. Lower down the price per share: “Peso Cost Averaging”; or
  4. Invest in less risky investments i.e bonds.

Your decision will be dependent upon your strategy: whether you are a short term trader or long term trader. 

  1. Doctrine of Ignore Cubes

As the word means, ignore the declines in the stock prices. You believe that changes in the stock prices are only temporary. You believe in the quality and strength of your stock ownership. The disadvantage of which is that it will take a long period of time to reverse the loses from your stock investments.

2. Cut loses already

It means that you are about to sell your stocks at a loss to minimize loses. This strategy is common among day traders. They believe that cutting loses are just part of their everyday trading.

3. Lower down your Price per share: “Peso Cost Averaging”

You believe that your stock ownership will be able to recover from the decline of the stock prices. You are employing the so called “Peso cost averaging”.

For example:

You purchased 1,000 shares of Jollibee Foods Corporation (JFC) stocks at 259.00 per share last 9 August 2016, while the current purchase price now, 11 November 2016 is 231 per share. Then assume that the price go down even further to P224/share in January 2017, however, let’s assume that due to the strong demand for JFC the stock price in February 2017 increased to P242/share. Further, let us assume that for Peso Cost Averaging, we purchased additional 1,000 shares when the prices are P224/share. For ignore cubes method, assume no further purchase.

I will compare the “Ignore Cubes Method” with the “Peso Cost Averaging method”.




Note: Computation above does not include transaction costs. 

It appears from my computation that performing the Peso Cost Averaging will at least give you a better position with your stock portfolio as compared to the ignore cubes method where despite the increase in the current price for February 2017, it still resulted to PhP17,000 loss.

Lesson: If the market go down, then its time to lower your average cost by purchasing additional stocks.

4. Invest in less risky investments i.e. bonds

If you cannot stomach the pains of vulnerability of stock prices, then go to safer and more conservative passive income source, bonds.


You need to decide for yourself.


The Author is advising readers to consult with your respective financial advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that investors may incur are imputable to their respective decisions.

Reverse Mortgage Program (RMP) Online Survey

Hi everyone!

I would like to seek your help by answering the questionnaire found in the link below. This survey is about Reverse Mortgage Program (RMP), a pipeline project of the National Home Mortgage Finance Corporation (NHMFC) with the aim of providing the Philippines’ first financial product which specifically caters to our senior citizens where they can acquire liquidity (cash) through their own house and lot or condominium units as mortgage.


NHMFC’s RMP is the first financial product that will be introduced in the Philippines which aims to address the financing needs of our beloved Filipino Senior citizens.

The senior citizens, driven by their personal intentions[1], apply for RMP from the originators/institutions. All borrowers, their spouse and heirs must undergo counselling[2] prior to loan approval. The NHMFC[3], consistent and empowered by its mandate, purchases the loan mortgages originated by the originators/institutions. NHMFC will be releasing the loan proceeds to the elderly borrower depending upon his choice or needs. Elderly borrower’s loan repayment will arise only after the occurrence of certain events[4].

I know that you have a lot of questions about the program, but as of now, the provided information above is sufficient for you to be able to answer the questionnaire below.

Who are eligible to take the survey?

  1. Filipino Senior Citizens (60 and above); or
  2. “You”- as a representative of your ascendant relatives by strictly answering the questions corresponding to their respective personal circumstances.

By answering the survey below, you have extended your helping hands to our beloved senior citizens which comprise 7.62% or 7.8Mn of our population based on the 2015 Philippine Statistics Authority (PSA) survey. As a token of my gratitude, I will update you upon approval of the program. Maraming salamat!

Please click link for the questionnaire:


[1] Such intentions may  include the following:

  1. For medical expenses (Mahabang Buhay);
  2. For travel or vacations or for personal necessities (Masiglang buhay);
  3. For planned business (Masaganang Buhay); and
  4. For payment of financial obligations (Maayudang Buhay).

[2] Counselling program includes the following:

  1. Risk and benefits of the RMP;
  2. Loan terms and conditions;
  3. Grounds for termination/cancellation of the loan;
  4. Responsibilities of the applicant;
  5. Responsibilities of NHMFC; and
  6. Legal issues.

[3] NHMFC is a major Philippine key shelter government owned and controlled corporation (GOCC) mandated by Presidential Decree (PD 1267). The primary purpose of which is stated in Section 4 stating that “The primary purpose of the Corporation shall be to develop and provide for a secondary market for home mortgages granted by public and/or private home financing institutions.”

[4] Loan repayment of the borrower, spouse, or heir thru refinancing, sale of the property, and dacion en pago upon occurrence of the following events:

  1. Death of the borrower;
  2. The borrower or his designated heir has not been residing in the house for a period of one (1) year except for medical reasons;
  3. The property is being rented out;
  4. Non payment of real estate tax; and
  5. Any other instance whereby the right of NHMFC over the property is impaired or violation of these rules has been committed, as determined by NHMFC.

How to invest in the Stock Market?

Updated: 22 December 2016- 5:25AM

There are many ways wherein you can invest in the stock market:

  1. You can go directly to an investment houses like First Metro Investment Corporation (FMIC),  U-Trade and Philam Asset management Inc. (apply for mutual funds);
  2. You can go to the bank Banco De Oro (apply for Unit Investment Trust Fund (UITF)) also try going to other banks such as Metro Bank and Security Bank;
  3. You can open online platform such as COL Financial, BPI-Trade; Philstocks and U-trade; or
  4. You can buy a life insurance with Variable Universal Life (VUL) that has an investment feature such as that of Insular life, Pru-Life UK (pioneer of VUL) and Sunlife Insurance.

Why did I choose COL Financial as a platform? 

  1. It can be used as a platform to buy individual stocks of any listed corporation of my own choosing during market hours 9:30-11:30 to 1:30-3:30, Mondays to Fridays;
  2. It has a platform that allows me to invest in mutual funds;
  3. Plus the fact that I don’t have to pay fees for external managers to manage my small investment portfolio, I manage my own investment;
  4. Minimal transaction costs, before you go investing see the list of costs and other FAQs in this website:
  5. Easy to withdraw my investments;
  6. All transactions are made online; and lastly
  7. At yan palang natratry kong online platform, at lahat ng kilala ko yan ang gamit, so I guess yan talaga. Will update this when I tried other platforms

1. 5 June 2016 platform

What is the best platform that is suited for you? 

  1. Depends on your needs
    1. Ano bang hanap mo? Invest then kalimutan? Then you need a fund manager. These investments have fund managers.
      1. Invest in Mutual funds, UITF, VUL life Insurance
    2. Or you want to handle your own investment?
      1. Then go for COL, BPI-Trade, U-Trade, Philstocks or others


Before we go any further, I just want to remind you that investment in the stock market is a risky investment in the short run but is an effective investment tool that beats inflation and taxes in the long run. So, pag may market fluctuation, wag kang magbenta agad. Relax ka lang. You have the data. You researched. You are backed up by mathematics. Don’t you be so nervous. Wag ganon ok? Keep Calm. Read:

  1. Overview of the Philippine Capital Market: Stocks and Bonds Market;
  2. Background of the Philippine Stock Market;
  3. Analysis of Publicly Listed Corporations; and
  4. Whole Picture: Magnified and Simplified

When you are already into trading/investing:

  1. The Ignore Cubes Doctrine

Steps in opening a COL Financial Account:

  1. Step 1: Open a bank account either BPI (not family savings bank), BDO, MetroBank, Asia United Bank;
  2. Step 2: Enroll the your bank account to online banking;
    1. The purpose of which is to make all your transactions online. It is your choice whether you make it an online process where “pila free” transaction is enjoyed. It’s your choice. The reason is that, in order to fund your COL account you will make a fund transfer from you bank account to your COL account.
    2. Please take note of your usernames, passwords and e-mail addresses, please secure them. It would be better if you make new accounts. Read my article on hacking entitled- Protect yourself COMELEC Data Leak: 55Mn Filipinos. Daming matitinding hackers ngayon. ingat
  3. Step 3: Once approved: Apply to the COL Financial and get the requirements here and fill up.
    1. You have to see to it that the signature appearing in your application is the same with any of your government issued IDs
  4. Step 4: Once filled-up, send to COL Financial application via LBC or any courier to the office mentioned in the link above;
  5. Step 5: COL Financial will interview you via Skype so try making a skype account already
    1. Be prepared to show your government IDs at least two during the video call.

The whole application took me two (2) weeks because I postponed opening said account due to an important tasks back then. So I guess you can finish that within 1 week depending on your timeline.


The Author is advising readers to consult with your respective financial advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that investors may incur are imputable to their respective decisions.


Whole Picture: Magnified and Simplified

Read this article after reading

  1. Tweaking the Old Practice: Saving Money
  2. How Money Works?

I will try to draw the overall picture of our investing lives thru numbers. Let us apply the ultimate rule in personal finance which is to “Pay yourself first” to implement this projection.

What I will teach you, if not all of you knows about it, is about the “power of compounding”. 1/ Google more on this one.

The power of compounding is applicable for income derived from the Stock Market investment such as mutual funds (MF), unit investment trust fund (UITF), exchange traded funds (ETF), individual investment to listed corporation thru various online platform and investment component of variable unit life (VUL) insurance. This is likewise applicable to your mortgage and other short/long term payable computation, in which case, the power of compounding is used against you.

This will give you the ultimate number of what to expect out of your effort of delaying the consumption of your money! You can apply this to your own advantage:)

Your working knowledge about the “power of compounding” will be helpful in your study of the stock market. Read further my discussion about the stock market before you invest or better yet, read more stock market books such as the “The Intelligent Investor” by Benjamin Graham, endorsed by Sir Warren Buffett. You should know the risks involved with investing money.

Your knowledge about this will give you the right mentality about your investment. It should be noted that it is ok to be risk averse, but you should be for the correct reasons backed up by mathematical computations, fundamental analysis and technical analysis. See the bigger picture!

This will be further discussed in the Analysis of Publicly Listed Corporations.

As to how to invest in the Philippine Stock Market read this: How to invest in the Philippine Stock Market?

Chill ka lang sa the numbers, we will elaborate one sample problem which is age 45 later (yellow highlight).

Table A: Investment Table with PhP1,000.00 Monthly Investment Up to Retirement

1. 4 June 2016 whole picture.png


Assumptions used in the above computation:

  1. That monthly income of PhP1,000.00 per month is put in the investment vehicle at the end of every month
  2. That the return of the investment vehicle has an average of 12% per annum (These are aggressive types of funds: UITF, VUL and MF)
  3. That the PhP1,000 per month (end of the month) is payable until the date of retirement which is 60 years old
  4. That the Nominal Gain is not adjusted to inflation
  5. That we cannot predict the market of whether it can return a 12% per annum. It maybe higher or lower.

Lesson from the Table:

  1. Start early in investing to experience exponential growth;
  2. If you are now an adult with kids, teach your kids the value of investing at early age;
  3. The longer the wait, the higher the return of fruits of your investment;
  4. You start investing now for your retirement; and
  5. You should have been retired already, provided you had known about early investing.

So to verify my computation above, let us assume that you are age 45 now. hehe (hindi naman halata)

This is the long cut computation: Short cut is discussed in the “Analysis of the Publicly Listed Corporations”

Example: At age 45 you started investing at a return of  12% per annum

Table B.1: Given

1. 4 June 2016 other investment

Table B.2: Long Cut Formula

Month Amount Invested Amount Earned Balance of Invesment
1 ₱1,000.00 ₱0.00 ₱1,000.00
2 ₱2,000.00 ₱10.00 ₱2,010.00
3 ₱3,010.00 ₱20.10 ₱3,030.10
4 ₱4,030.10 ₱30.30 ₱4,060.40
5 ₱5,060.40 ₱40.60 ₱5,101.01
6 ₱6,101.01 ₱51.01 ₱6,152.02
7 ₱7,152.02 ₱61.52 ₱7,213.54
8 ₱8,213.54 ₱72.14 ₱8,285.67
9 ₱9,285.67 ₱82.86 ₱9,368.53
10 ₱10,368.53 ₱93.69 ₱10,462.21
11 ₱11,462.21 ₱104.62 ₱11,566.83
12 ₱12,566.83 ₱115.67 ₱12,682.50
13 ₱13,682.50 ₱126.83 ₱13,809.33
14 ₱14,809.33 ₱138.09 ₱14,947.42
15 ₱15,947.42 ₱149.47 ₱16,096.90
16 ₱17,096.90 ₱160.97 ₱17,257.86
17 ₱18,257.86 ₱172.58 ₱18,430.44
18 ₱19,430.44 ₱184.30 ₱19,614.75
19 ₱20,614.75 ₱196.15 ₱20,810.90
20 ₱21,810.90 ₱208.11 ₱22,019.00
21 ₱23,019.00 ₱220.19 ₱23,239.19
22 ₱24,239.19 ₱232.39 ₱24,471.59
23 ₱25,471.59 ₱244.72 ₱25,716.30
24 ₱26,716.30 ₱257.16 ₱26,973.46
25 ₱27,973.46 ₱269.73 ₱28,243.20
26 ₱29,243.20 ₱282.43 ₱29,525.63
27 ₱30,525.63 ₱295.26 ₱30,820.89
28 ₱31,820.89 ₱308.21 ₱32,129.10
29 ₱33,129.10 ₱321.29 ₱33,450.39
30 ₱34,450.39 ₱334.50 ₱34,784.89
31 ₱35,784.89 ₱347.85 ₱36,132.74
32 ₱37,132.74 ₱361.33 ₱37,494.07
33 ₱38,494.07 ₱374.94 ₱38,869.01
34 ₱39,869.01 ₱388.69 ₱40,257.70
35 ₱41,257.70 ₱402.58 ₱41,660.28
36 ₱42,660.28 ₱416.60 ₱43,076.88
37 ₱44,076.88 ₱430.77 ₱44,507.65
38 ₱45,507.65 ₱445.08 ₱45,952.72
39 ₱46,952.72 ₱459.53 ₱47,412.25
40 ₱48,412.25 ₱474.12 ₱48,886.37
41 ₱49,886.37 ₱488.86 ₱50,375.24
42 ₱51,375.24 ₱503.75 ₱51,878.99
43 ₱52,878.99 ₱518.79 ₱53,397.78
44 ₱54,397.78 ₱533.98 ₱54,931.76
45 ₱55,931.76 ₱549.32 ₱56,481.07
46 ₱57,481.07 ₱564.81 ₱58,045.89
47 ₱59,045.89 ₱580.46 ₱59,626.34
48 ₱60,626.34 ₱596.26 ₱61,222.61
49 ₱62,222.61 ₱612.23 ₱62,834.83
50 ₱63,834.83 ₱628.35 ₱64,463.18
51 ₱65,463.18 ₱644.63 ₱66,107.81
52 ₱67,107.81 ₱661.08 ₱67,768.89
53 ₱68,768.89 ₱677.69 ₱69,446.58
54 ₱70,446.58 ₱694.47 ₱71,141.05
55 ₱72,141.05 ₱711.41 ₱72,852.46
56 ₱73,852.46 ₱728.52 ₱74,580.98
57 ₱75,580.98 ₱745.81 ₱76,326.79
58 ₱77,326.79 ₱763.27 ₱78,090.06
59 ₱79,090.06 ₱780.90 ₱79,870.96
60 ₱80,870.96 ₱798.71 ₱81,669.67
61 ₱82,669.67 ₱816.70 ₱83,486.37
62 ₱84,486.37 ₱834.86 ₱85,321.23
63 ₱86,321.23 ₱853.21 ₱87,174.44
64 ₱88,174.44 ₱871.74 ₱89,046.19
65 ₱90,046.19 ₱890.46 ₱90,936.65
66 ₱91,936.65 ₱909.37 ₱92,846.02
67 ₱93,846.02 ₱928.46 ₱94,774.48
68 ₱95,774.48 ₱947.74 ₱96,722.22
69 ₱97,722.22 ₱967.22 ₱98,689.44
70 ₱99,689.44 ₱986.89 ₱100,676.34
71 ₱101,676.34 ₱1,006.76 ₱102,683.10
72 ₱103,683.10 ₱1,026.83 ₱104,709.93
73 ₱105,709.93 ₱1,047.10 ₱106,757.03
74 ₱107,757.03 ₱1,067.57 ₱108,824.60
75 ₱109,824.60 ₱1,088.25 ₱110,912.85
76 ₱111,912.85 ₱1,109.13 ₱113,021.98
77 ₱114,021.98 ₱1,130.22 ₱115,152.20
78 ₱116,152.20 ₱1,151.52 ₱117,303.72
79 ₱118,303.72 ₱1,173.04 ₱119,476.75
80 ₱120,476.75 ₱1,194.77 ₱121,671.52
81 ₱122,671.52 ₱1,216.72 ₱123,888.24
82 ₱124,888.24 ₱1,238.88 ₱126,127.12
83 ₱127,127.12 ₱1,261.27 ₱128,388.39
84 ₱129,388.39 ₱1,283.88 ₱130,672.27
85 ₱131,672.27 ₱1,306.72 ₱132,979.00
86 ₱133,979.00 ₱1,329.79 ₱135,308.79
87 ₱136,308.79 ₱1,353.09 ₱137,661.87
88 ₱138,661.87 ₱1,376.62 ₱140,038.49
89 ₱141,038.49 ₱1,400.38 ₱142,438.88
90 ₱143,438.88 ₱1,424.39 ₱144,863.27
91 ₱145,863.27 ₱1,448.63 ₱147,311.90
92 ₱148,311.90 ₱1,473.12 ₱149,785.02
93 ₱150,785.02 ₱1,497.85 ₱152,282.87
94 ₱153,282.87 ₱1,522.83 ₱154,805.70
95 ₱155,805.70 ₱1,548.06 ₱157,353.76
96 ₱158,353.76 ₱1,573.54 ₱159,927.29
97 ₱160,927.29 ₱1,599.27 ₱162,526.57
98 ₱163,526.57 ₱1,625.27 ₱165,151.83
99 ₱166,151.83 ₱1,651.52 ₱167,803.35
100 ₱168,803.35 ₱1,678.03 ₱170,481.38
101 ₱171,481.38 ₱1,704.81 ₱173,186.20
102 ₱174,186.20 ₱1,731.86 ₱175,918.06
103 ₱176,918.06 ₱1,759.18 ₱178,677.24
104 ₱179,677.24 ₱1,786.77 ₱181,464.01
105 ₱182,464.01 ₱1,814.64 ₱184,278.65
106 ₱185,278.65 ₱1,842.79 ₱187,121.44
107 ₱188,121.44 ₱1,871.21 ₱189,992.65
108 ₱190,992.65 ₱1,899.93 ₱192,892.58
109 ₱193,892.58 ₱1,928.93 ₱195,821.51
110 ₱196,821.51 ₱1,958.22 ₱198,779.72
111 ₱199,779.72 ₱1,987.80 ₱201,767.52
112 ₱202,767.52 ₱2,017.68 ₱204,785.19
113 ₱205,785.19 ₱2,047.85 ₱207,833.04
114 ₱208,833.04 ₱2,078.33 ₱210,911.37
115 ₱211,911.37 ₱2,109.11 ₱214,020.49
116 ₱215,020.49 ₱2,140.20 ₱217,160.69
117 ₱218,160.69 ₱2,171.61 ₱220,332.30
118 ₱221,332.30 ₱2,203.32 ₱223,535.62
119 ₱224,535.62 ₱2,235.36 ₱226,770.98
120 ₱227,770.98 ₱2,267.71 ₱230,038.69
121 ₱231,038.69 ₱2,300.39 ₱233,339.08
122 ₱234,339.08 ₱2,333.39 ₱236,672.47
123 ₱237,672.47 ₱2,366.72 ₱240,039.19
124 ₱241,039.19 ₱2,400.39 ₱243,439.58
125 ₱244,439.58 ₱2,434.40 ₱246,873.98
126 ₱247,873.98 ₱2,468.74 ₱250,342.72
127 ₱251,342.72 ₱2,503.43 ₱253,846.15
128 ₱254,846.15 ₱2,538.46 ₱257,384.61
129 ₱258,384.61 ₱2,573.85 ₱260,958.45
130 ₱261,958.45 ₱2,609.58 ₱264,568.04
131 ₱265,568.04 ₱2,645.68 ₱268,213.72
132 ₱269,213.72 ₱2,682.14 ₱271,895.86
133 ₱272,895.86 ₱2,718.96 ₱275,614.81
134 ₱276,614.81 ₱2,756.15 ₱279,370.96
135 ₱280,370.96 ₱2,793.71 ₱283,164.67
136 ₱284,164.67 ₱2,831.65 ₱286,996.32
137 ₱287,996.32 ₱2,869.96 ₱290,866.28
138 ₱291,866.28 ₱2,908.66 ₱294,774.95
139 ₱295,774.95 ₱2,947.75 ₱298,722.69
140 ₱299,722.69 ₱2,987.23 ₱302,709.92
141 ₱303,709.92 ₱3,027.10 ₱306,737.02
142 ₱307,737.02 ₱3,067.37 ₱310,804.39
143 ₱311,804.39 ₱3,108.04 ₱314,912.44
144 ₱315,912.44 ₱3,149.12 ₱319,061.56
145 ₱320,061.56 ₱3,190.62 ₱323,252.17
146 ₱324,252.17 ₱3,232.52 ₱327,484.70
147 ₱328,484.70 ₱3,274.85 ₱331,759.54
148 ₱332,759.54 ₱3,317.60 ₱336,077.14
149 ₱337,077.14 ₱3,360.77 ₱340,437.91
150 ₱341,437.91 ₱3,404.38 ₱344,842.29
151 ₱345,842.29 ₱3,448.42 ₱349,290.71
152 ₱350,290.71 ₱3,492.91 ₱353,783.62
153 ₱354,783.62 ₱3,537.84 ₱358,321.46
154 ₱359,321.46 ₱3,583.21 ₱362,904.67
155 ₱363,904.67 ₱3,629.05 ₱367,533.72
156 ₱368,533.72 ₱3,675.34 ₱372,209.05
157 ₱373,209.05 ₱3,722.09 ₱376,931.14
158 ₱377,931.14 ₱3,769.31 ₱381,700.46
159 ₱382,700.46 ₱3,817.00 ₱386,517.46
160 ₱387,517.46 ₱3,865.17 ₱391,382.64
161 ₱392,382.64 ₱3,913.83 ₱396,296.46
162 ₱397,296.46 ₱3,962.96 ₱401,259.43
163 ₱402,259.43 ₱4,012.59 ₱406,272.02
164 ₱407,272.02 ₱4,062.72 ₱411,334.74
165 ₱412,334.74 ₱4,113.35 ₱416,448.09
166 ₱417,448.09 ₱4,164.48 ₱421,612.57
167 ₱422,612.57 ₱4,216.13 ₱426,828.69
168 ₱427,828.69 ₱4,268.29 ₱432,096.98
169 ₱433,096.98 ₱4,320.97 ₱437,417.95
170 ₱438,417.95 ₱4,374.18 ₱442,792.13
171 ₱443,792.13 ₱4,427.92 ₱448,220.05
172 ₱449,220.05 ₱4,482.20 ₱453,702.25
173 ₱454,702.25 ₱4,537.02 ₱459,239.28
174 ₱460,239.28 ₱4,592.39 ₱464,831.67
175 ₱465,831.67 ₱4,648.32 ₱470,479.98
176 ₱471,479.98 ₱4,704.80 ₱476,184.78
177 ₱477,184.78 ₱4,761.85 ₱481,946.63
178 ₱482,946.63 ₱4,819.47 ₱487,766.10
179 ₱488,766.10 ₱4,877.66 ₱493,643.76
180 ₱494,643.76 ₱4,936.44 ₱499,580.20

Check that the ending balance value of investment at age 60 in the Table A above and the balance of Table B.2 row number 180 are the same. This validates our formula in our Table A.

The balance of PhP499,580.20 is the value of your investment at your retirement age of 60 years old. Out of your total investment of PhP180,000.00 payable every month end at PhP1,000.00 for the past 180 months, you gained PhP319,580.20 or 177.54% return of investment (ROI).

Explanation for the Table:

1. 4 June 2016 A.  computation

1. 4 June 2016 C.  computation

1. 4 June 2016 B.  computation

1. 4 June 2016 D.  computation


We can tweak the scenarios of your investing pattern depending on your capacity to invest. Another example:

  1. Investing at the end of every month PhP1,000.00 to an investment vehicle with an annual return of 12% for five (5) years
  2. At the end of five (5) years, we will hold it until your retirement

1. 4 June 2016 other investment


The Author is advising readers to consult with your respective financial advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.


Analysis of Publicly Listed Corporations

Last week ko na po munang magpopost ng about sa stock market. Sariling Sikap muna kayo after posting these four articles.

Yes, we will be covering all the industries but only for selected corporations listed in the Philippine Stocks Exchange (PSE).

The Philippine Stock Market has the following industry composition:

  1. Holding Firms – SM Investment Corporation: SM  and Ayala Corporation: AC
  2. Mining and oil – Philex Mining Corporation: PX
  3. Industrial – Jollibee Foods Corporation: JFC and Meralco: MER
  4. Property – Ayala Land Inc: ALI
  5. Financials – Metropolitan Bank Corporation: MBT
  6. Service – Globe Telecom: Glo

For starters, you can pattern your investments with that of the Blue Chip stocks of the Philippine Stock Exchange Index (PSEI) which is composed of 30 giant corporations. The good news in investing to these corporations is that you are assured of strong fundamental ratios (meaning: Matatag), however, the bad news is that, they are costly. Accountants would know that:)

For additional information: you can access data of your prospect corporation and analyze their operations thru reading these documents:

  1. General Information Sheets;
  2. Annual Reports; and
  3. Other significant documents usually found in their websites.

Igoogle mo lang. To ensure safety of the money of the investors, PSE is imposing rigid reportorial requirement to these corporations thru submission of reports. These reports are available to investors.

Summary of Key Rules Observed Based on the Performance of the Individual Corporations:

  1. Invest early to enjoy exponential growth of investment between 10-15 years of your 15 years investment and 15-20 years of your 20 years investment;
  2. If your a long-term investor: ignore short term stock prices fluctuations except for long market price decline caused by financial crisis or market depression as the case of Ms. Napoles’ Pork Barrel Scam in 2013;
  3. At least annual adjustment of the investment portfolio to achieve higher return;
  4. Observe diversification¹ of your investment as some corporations are affected by negative news and financial crisis while others are not;

The real meaning of diversification is to invest in different investment vehicles not within the same umbrella or family i.e. investment in bonds, investment in stocks, investment in money market, investment in foreign exchange currency, investment in real estate, investment in time deposit, derivatives, and others not known to my knowledge so far.

¹For the sake of discussion in this page, we’ll use the term diversification as a method used to invest in different companies within the stock market.

For uniformity of our discussion, let us subject all the corporations with the same analysis:

  1. That we will be buying 100,000 shares as our entry in all the corporations irrespective of the stock price per share at that specified year as drawn in the graph of each corporation;
  2. That same 100,000 shares will be sold in full at current year 2016; and
  3. That we will now project our income for the next 5, 10, 15, 20, 25 years investment period if we buy atleast 100,000 shares at current year 2016 using the current stock prices and subjecting it to the rate of return from calendar year 1998 (after the Asian Financial Crisis- 18 year period)

Before that, I will teach you how to compute for rate of return of the Stocks to easily grasp our discussion. Ok?


How to compute for interest return? Practice…

Meralco Electric Company: MER

3. MER 1 June 2016

Let us Attack Graph A: Given set of Facts

  1. We will be trying to compute the interest return supposed you bought the 100,000 shares of stocks of Meralco back in 1993 where it was trading at PhP30.00 per share
  2. Further let us assume that the stock price per share at calendar year 2016 for Meralco is trading at PhP360.00 per share. (verify in the table above).
  3. Finally let us factor in the effect of inflation rate in our investment. Let us assume that the inflation rate for the past 18 years is 4.71% (Based on Banko Sentral ng Pilipinas (BSP) data). We will be using this rate in our computation of the real rate of return. (Read: How money works)


  1. Compute for:
    1. Nominal rate of return and the real rate of return of our investment in Meralco;
    2. Compute for our supposed income when we sold the 100,000.00 shares at calendar year 2016 at PhP360.00 the market value of the investment as shown in the above table.


1. Computation 2 June 2016.png


  • The interest rate of return when you purchased stocks in 1993 at PhP 30.00 per share and holding it until calendar year 2016 at PhP360.00 per share for a total of 23 years as investment period is

11.41% Nominal Return 

11.41% is the Nominal rate of return (non-adjusted to the effect of inflation). The inflation rate is 4.71%² for the past 18 years. The Real rate of return is 11.41%- 4.71% =

6.70% Real Rate of Return 

²I had no data for a 23 year period inflation rate for the Philippines, but for the sake of discussion let us just use 4.71% which represents the inflation rate for the past 18 years.

  • The income from selling the investment is:

1. Computation  2 2 June 2016

Note: See the amount of investment in 1993 pegged at a monetary value of PhP3,000,000.00. We all know that that amount is very huge and it is not that easy to invest in one shot payment. What you can do is to spread that investment in one to five years depending on your capacity to pay.

How to compute monetary nominal gain and real rate of return using the Interest Rate of Returns previously computed at 11.41% and 6.70% respectively?


1. Corrected return last 2 Jun 2016

It does give you the same result. You can apply these formulas at investing proposals, on decision points involving future values, on whether to accept new job offer or stay at your current job, in your mortgages, in computing for your long term loans and others.

If someone really had invested this amount of money to MER in calendar year 1993, he is now enjoying his retirement as a millionaire! From PhP3,000,000.00 in 1993 to a staggering PhP36,006,197.72. Hayop! kulang nalang buntot! That is 1,100% return. Remember that of Warren Buffett’s Berkshire Haltaway Corporation his return was 513,055% from a stock price of less than $20.00 to $200k+ from 1986 to year 2k+. The “power of compounding”.

Simple lang hindi ba?

Now, you are ready!!!!!!

Reiterating the premise of our analysis for uniformity of computation: 

  1. That we will be buying 100,000 shares as our entry in all the corporations irrespective of the stock price per share at that specified year as drawn in the graph of each corporation;
  2. That same 100,000 shares will be sold in full at current year 2016; and
  3. That we will now project our income for the next 5, 10, 15, 20, 25 years investment period if we buy atleast 100,000 shares at current year 2016 using the current stock prices and subjecting it to the rate of return from calendar year 1998 (after the Asian Financial Crisis- 18 year period)

Assignment niyo muna to:)

I will update later.


Table A. SM Investment Corporation,  Ticker name: SM

5. SM 1 June 2016

Table B. Ayala Corporation, Ticker Name AC

5. AC 1 June 2016


Table C. Philex Mining Corporation, Ticker name PX

5. PX 1 June 2016


Table D. Jollibee Foods Corporation, Ticker name JFC

5. JCF 1 June 2016

Table E: Manila Electric Company, Ticker Name MER

3. MER 1 June 2016


Table F. Ayala Land, Inc. Ticker Name ALI

5. ALI 1 June 2016


Table G. Metropolitan Bank and Trust Company, Ticker Name MBT

4. MBT 1 June 2016


Table G. Globe Telecom, Ticker name Glo

5. GLo 1 June 2016





The Author is advising readers to consult with your respective financial advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.


Overview of the Philippine Capital Market: Stocks and Bonds Market

What is capital market?

Google says it is the part of a financial system concerned with raising capital by dealing in shares, bonds, and other long-term investments.

Table A shows Osingat Corporation taps the Capital Market to fund its various activities

Philippine Stock Market Overview 20 May 2016

In simple borrowing of funds, Osingat Corporation may borrow money from domestic, foreign or government financial institutions. However, when the amount of borrowing is of significant sum of money to fund business expansion, to pay maturing long term payable and for other purposes, Osingat Corporation may tap the capital market thru either the equity market (Philippine Stock Market) or the bond market thru corporate issuance or asset backed securities. In a simple bank loan transaction, the money that Osingat Corporation borrows comes from the bank which primarily came from bank depositors. However, in the capital market, the money that will be gathered by the corporation comes from individual investors like you and me.

A. What happens when Osingat Corporation Pursue the Capital Market Transaction Thru:

  1. Equity Market: Philippine Stock Exchange (PSE)
    1. Before we go to that, Osingat Corporation, if he chooses not to go Public thru PSE, he can actually issue shares of stocks to new stockholders (konting tao lang). However, if he pursue to go public via Initial Public Offering (IPO) in the stock market, then Osingat Corporation is actually letting investors of significant volume to have ownership to the corporation. When Osingat Corporation go public, the shareholders minimize the risk of capital loss in times of bankruptcy, however, it will negatively result to dilution of their earnings from the corporation brought about by the entry of new stockholders. Ikaw yung new entry (new stockholder), if you buy stock of Osingat Corporation in the stock market thru whatever platform that you might have used.
    2. In case of bankruptcy (Dead end) of Osingat Corporation, you as stockholder may incur capital loss because we have the so called order of priority in settlement of claims which is as follows:
      1. External Creditors (dito papasok yung may investment sa bonds);
      2. Internal creditors;
      3. Preference shareholders; and
      4. Common shareholders (dito ka papasok as stock investor)

Since you (as stockholder) are last in the settlement hierarchy, there really is a chance to lose capital investment. Kaya you need to be aware sa news of what happens to your corporation, whether it has healthy financial ratios or not, whether it has a pending lawsuit, good financial performance as reflected in the financial reports, a good income projection and others.

2. Bonds Market: Philippine Dealing Exchange

If Osingat Corporation instead issued bonds than an IPO, then the corporation has become a borrower of funds from many bondholder investors in which case in times of bankruptcy, bond holders are the number 1 priority in the settlement hierarchy. They are the first to be settled from the assets of Osingat Corporation. That is the reason why, investing in bonds are somewhat less risky as compared to that of the stocks in the stock market. Ok?

B. Point of view of Osingat Corporation: Cost of Money

  1. Domestic, Foreign or Government Financial Institutions (GFIs)

If Osingat Corporation borrowed money from the above institutions, he incurs payment of interest until the maturity of the obligation. Upon maturity, the corporation will have to pay for the lump sum (whole) amount of the loan.

     2. Capital Market transaction

                1. Stock Market Thru IPO

The cost of money here is the payment of dividends in the form of cash, property dividend in the form of shares of stock of another corporation and properties, script dividends, liquidating dividends and other form of dividends to the shareholders.

       2. Corporate Bonds Issuance

The cost of money is the payment of interest rate and payment of the principal at the maturity. Same as a bank loan.

Table B shows the Composition of Osingat Corporation

Individual Corporation 20 May 2016

Why do Corporation tap the capital market?

Because they need money!

Corporations, as juridical entities, have assets which include cash, accounts receivable from customers, inventories, investment properties, property plant and equipment, prepaid expenses and intangible assets. Osingat Corporation’s assets are partially funded by liabilities and the remainder of which come from the capital contribution of incorporators[1].

The rule of thumb in borrowing money (loans or thru bonds) for corporations and for individuals (Tayo) is that no more than half of our assets should be funded by liabilities except for capital intensive corporations which caters to capital intensive undertaking or by the nature of the business transaction as that being a fiduciary of funds. You read more about the concept of leverage.

Prior to investing in Osingat Corporation, you as an investor should have a learning knowledge of the business that he is doing. You should be concern at his capacity to operate in perpetuity, going concern principle[2]. You are also concern of whether he can return your investment and can give you income for giving your money for the corporation’s use. You should also be concerned of any lawsuits that the company is facing. Your primary concern is the preservation of your capital investment and of course earning money.

A. How do Osingat Corporation check their Financials (Fundamental Analysis)

  1. Financial Reports

1. Statement of Financial Position or Balance Sheet. This report gives the financial position of the corporation. The reflected accounts here are called real accounts[3] for they are permanent. The data reflected here indicates whether the company has the power to exist in the long run.

2. Statement of Financial Performance or Income Statement. This report gives the picture of financial performance of the corporation. The accounts here are called nominal accounts[4] for they are closed at the end of the accounting period. The data here gives you an idea of the performance of the corporation in terms of revenues or loses incurred during the calendar year.

3. Statement of Cash Flows. This report indicates the usage of cash during the period covered. Cash usage is classified as either operating cash flows, investing cash flows or financing cash flows.

2. Financial Ratios

1. Current Ratio. It is computed by dividing current assets over current liabilities. This indicates the capacity of Osingat Corporation to settle short term obligations using current assets.

2. Earnings per share (EPS). Earnings per share is calculated by subtracting preferred dividends from net income and dividing by the common shares outstanding.

3. Price Earnings ratio (PER). It is computed by dividing market price per share by EPS. PER is used as a reference in order to determine the profitability of a certain corporation. The lower the PER the better the company’s performance

4. Earnings to price ratio (EPR) (My favorite) You must learn this to your advantage. It is computed by dividing the EPS by Market price per share. The percentage computed is the comparable with the returns or interest rates offered by the banking institutions or any other investment vehicles.

In my discussion of Analysis of Publicly Listed Corporation, we computed for the return for the period lapse as indicated in the graphs, while the computation of EPR is the actual rate of return for the corporation in the short term basis.

You need not worry about computing these ratios. These data are readily available online. You can check by using these links:

Wall Street Journal:

The question now: Which is better, stock investor or bond investor?

  1. Your point of view as “Investor”
    1. In terms of Income
      1. In the United States (US) the average annual return of bonds is 2.8% while for period 1871 to 2006, the return in the stock market is 6.8% that is inflation adjusted already. If we add 4% inflation rate, the return is about 10.8% per annum. That only means that the return of stocks is higher as compared to that of the bonds. Source: My online course at Financial Markets course by Yale University.
      2. For the Philippines made an analysis of the PSEI return which is about 7% for investments made in PSEI in 1986 or a 30 year period. However, that return should have been higher, I was a bit sleepy when I computed that so I entered the wrong value at 1986. If I corrected that computation, the return would be closed to that of the US stocks return. See my discussion on the “Background of Philippine Stocks Exchange”.

Just to share, you can beef up your knowledge by enrolling to free online courses. I am using these websites:

    2. Risks involved in your investment

The concept of risk that you should never forget is that “The higher the risks, the higher the returns”.

Well, the riskier investment is the investment in stocks, because as we discussed earlier, stock investors are the last persons to be settled in times of corporate bankruptcy.

Bond holders on the other hand are the first in line when it comes to settlement during bankruptcy.

Your Sources of Income: Passive Income

  1. Day Job
    1. I would like to make a separate discussion about this. A day job is a usual 8AM to 5PM daily routine every day and for some BPO employees, a distorted working hours. You will feel that you are oblige to do the same routine everyday. If you cannot decode it by yourself, let me tell it to you that you are being a slave of money, you are working for money. Read the book Rich Dad, Poor Dad by Sir Robert Kiyosaki.

1. 6 June 2016 Rat race.png

2. Passive Income such as making diversified investments

1. Passive income is making your money work for you. You are earning money even if you are not working at all. This is being smart. You should master earning passive incomes.

2. Income from investment in mutual funds (MF), unit investment trust fund (UITF), exchange traded funds (ETFs), bonds, treasury bonds and bills, real estate, foreign currency trading and others.

Osingat Corporation’s Decision Point?

The Corporation, with the wisdom of management and the right decision making of the Board of Directors, try to make the best possible action plan for the corporation of whether to issue bonds or pursue an IPO. Every facet of the corporation should be taken into consideration.

Supposing Osingat Corporation Pursued Initial Public Offering

If that is the case, then the stocks of Osingat Corporation will be for grabs for all the stock traders in the stock market. Well, as investor again, you got to do some research. You need to understand the fundamental analysis. Example: you have to determine if Osingat Corporation has undervalued assets or a competitive product line if that is the case, buy and hold it in the long run. You’ll be millionaire by holding it long enough.

Table C: Overall Picture of PSE as a Passive Income Tool

Access to the PSE 20 May 2016

The above table shows you the whole picture on how you can tap the Stock Market as an investment tool for your passive income. That is literally making your money work for you! Warren Buffet is the best investment guru that does investing in the stock market. He started at age 11. His recent transaction is the purchase of Apple stocks calendar year 2016. Ikaw? Ilang taon ka na? I’m 25 years old (cy 2016). Yes! Late na tayo, pero may kasabihan nga tayo. It is better to be late than never. May masabi lang:)

Now, this is the exciting part. This is the part wherein we consolidate all the discussion above.

I hope you now see the whole picture of it!

You, as stock investor can buy directly the stock of Osingat Corporation thru your online platforms which may include COL Financials, BPI Trade, Philstocks and U-Trade. You can also purchase Osingat Corporation when it is included in the portfolio of the investments of the mutual funds, unit investment trust fund, and variable universal life insurance. If that is the case, invest!

Well, that is Osingat Corporation. Now, choose your desired Company to invest in and “THINK”. Apply what you learned here and in the successive analysis tools that I shared in Background of Stock Market and Analysis of Publicly Listed Stock Corporations.

Having that knowledge, hindi ka na kakabahan sa market fluctuations. As long as you know where you are going, you are doing just fine.

Kumusta? You ok?

If you learn something from me, kindly share this to your friends list sa social media i.e facebook, twitter, instagram, linkedin. Share the information to those who are willing to learn something new.

Appreciate that if you do. Thank you!


[1] The original investors that have the #Balls to start the corporation.

[2] That corporations exist in perpetuity. #MayForever

[3] Google mo nalang.

[4] Google mo nalang din.


The Author is advising readers to consult with your respective financial advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.