Less than 1% of Pinoys invest in stock market


Posted at Jun 16 2008 06:29 PM | Updated as of Jun 17 2008 02:29 AM

Less than one percent of all Filipinos invest in the local bourse, a study by the Philippine Stock Exchange (PSE) showed Monday.

The study, which was based on client profiles of trading participants, revealed that only 430,681 accounts were being maintained for Filipinos last year.

"These accounts represented not even one half of one percent of our total 89 million population," said Francis Lim, PSE president and chief executive officer.

Of the total, only 103,412 or just a little over one-tenth of one percent of Filipinos were active or involved in at least one trade per year.

"This is alarming, because feedback reaching us indicated that many countries in our Asian neighborhood with far bigger stock markets have very high proportions of their people involved in the stock market," Lim said.

Lim added that among Asian countries, Singapore has the highest proportion of its population, roughly 33.0 percent, investing in the stock market.  Japan and Australia followed with about 25.0 percent each; Malaysia, 18.0 percent; Hong Kong, 17.0 percent; and Korea, 10.0 percent.

The PSE survey also showed that the number of foreign accounts were much smaller than that of the Filipinos, numbering only 4,713 a year ago.

"That's the rationale behind our decision to intensify our market education campaign," Lim said.

"We also have to encourage other stakeholders, including our legislators and policymakers to help us entice more Filipino participation in our stock market, because we in the PSE cannot do the job all by ourselves."

According to Lim, the PSE has lobbied before Congress several market-friendly proposals to boost its campaign for more local participation. These include the Personal Equity Retirement Account, which proposes to extend tax incentives to those who invest in the local capital market; and the Credit Information System Act, which aims to establish an efficient, comprehensive and centralized credit information system in an effort to improve the availability of inexpensive credit for businessmen.

Also pending are the Corporate Recovery and Insolvency Act, which will replace the country's century-old and antiquated Insolvency Law and provide a new lease on life for listed companies and brokers that encounter financial difficulties; the Real Estate Investment Trusts, which aims to accelerate the development of real estate industry by offering incentives to eligible public companies that own and operate income-producing real estate; and the Collective Investment Schemes Law that will further promote collective investment schemes.