Philippines Stocks Warning 2017: Do not invest without thinking.

Now, before this article starts getting some heat. Let me warn you of the negativity of investing in stocks this 2017.

This is not an easy thing to say, knowing that a lot of people (roughly about 11% of our population) invest in stocks; telling them this truth might hamper their ability to invest, but if they have my Ebook – then anybody would know the secret on when and what to invest .

But listen here first and judge for yourself why you should not haphazardly invest in stocks this 2017.

There are 3 factors that contribute to this warning;

  1. The Duterte Administration Stand
  2. Tax Reformations
  3. End of Contract Enactment

First, I do not antagonize the Duterte administration, as a matter of fact, it is promising. But what I want you guys to know is that, “If you want to know when to invest, then know what is the current law”. Laws have the power to create or destroy businesses, so if you want to know your economical stand point- then look no further, start looking at the Law. Because when the law changes, businesses also changes.

But as what we investors often say “talk is cheap” – the administration promises are of course, no offense, is “cheaper”. Often the promise of a good financial standing by the government in the Philippines must not always be taken on face value. We have to remember that governments do not per se know how to deal with business itself. Businessmen knows how to deal with businesses, but often the government just neglects the business world’s suggestion. We can see this now, and often, the change that we are expecting do not come in quickly in economical terms. We often hear the promise of urban, foreign, reserve and traffic development; but we can only see the immediate actions for such problems – not the solution itself. For example, the administrations stand within the Filipino Sovereignty and foreign policy is as murky as a swamp – it is so unclear that other foreign investors are having a hard time investing with us. With the iron clad rules and also controversial police methods, we are also losing tourism investments that is negatively impacting the economy.


Second, the Tax reforms and newly created deductions can and may hurt your investments. This includes the retirement of other pensioners. Why? Let me explain.

The administration proposed to cut off much of the income tax median people earn in the Philippines, but to counter-act this loss, they also proposed to enact an “excise tax” for petroleum products. For the common folk, we often hear hurrays saying “I only have to pay less tax now!”… but in reality, the tax that that the petroleum will receive would also deduct much more than our revised tax deduction.

Don’t believe me? Think about this; Tell me one particular “thing” that does not use petroleum in  your daily life? Pretty much everything we own use electricity, and electricity uses fuel, which came from petroleum. So if there are more petroleum tax to pay, then expect to pay more for your bills. This also includes your bills especially your daily travel expense; public or private, you will have to use a vehicle that uses fuel – thus another tax to pay for.

Then, when you retire at age so and so, your money will not be high enough to compensate for the surge of tax “chains” that will happen because of higher petroleum tax in the near future. Why? because taxes never go down, they only go up.

This is where the second problem lies, with this kind of tax reformations, investors that rely on fuel or any branch of their business that is associated with fuel, will suffer tremendous income loss. This will ensue a short term loss in the market, but will provide a longer negative impression to foreign investors. The government must start looking at this possibility because, like it or not, the Philippines is a consumer country – we import products thus this tax proposition will only hurt businesses because it will demand more money for what its worth for. Nobody will invest in a country with high taxes.


Third, another problem is the ENDO or end of contract disbandment that the administration was trying to pursue. This of course, for the middle class was good; but the problem with this system is that, the law will require all employments to be permanent so benefits can be attained. This is good… In paper only.

In reality, this will further hurt other job seekers and current employees that could be valuable for a business. Because you have to hire people on permanent basis, then you must pay them all the same. This socialistic mindset is good if the employer can pay, but with the current market and investment future, businesses might opt to not hire people instead. So rather than creating more jobs, you might find yourself searching for more instead. And ofcourse, instead of a bullish market ( or stocks going up), your investments might suffer because companies might go down in the mean time, the reason? Loss of manpower with qualified personnel.

Because it will come down to its virtue of who is more “beneficial”. Is it…Uneducated and inexperienced workers? or educated and efficient workers? You can see that this will only hurt the middle and the poor class. The employers and the business class will just adjust their premiums and standards – but in the end, the working class will lose.


In conclusion, upon reading this article you might ask if “Should I not invest in stocks?”. Well… No. All I am saying is that do not invest in stocks yet with the expectation that the economy will also go up. It’s not gonna happen yet. In due time, the economy will prosper, but not without a few ” stocks gloom” seasons. You have to let this season pass by unless you are investing by “Short Selling” – buying a stock on sell order; when the stocks go down, you will gain profit.

But, I highly suggest to not yet invest your whole money “so much” in stocks right now. I do suggest that you diversify your investment portfolio or change your stocks investment strategy such as instead of buying, do a short selling instead. Also, you can still invest in stocks in a “company” that can always be profitable even when the market becomes volatile (we call this “blue chip” such as Jollibee, Meralco, or SMDC) – this way, regardless of stock market drops, that company (hopefully) can still create profit.

This is rough times to say that the philippines’ stocks is strong and is recovering – It’s not. It will  recover in due time after the businesses or the taxes are enacted in a way that would benefit not only the filipino people, but also other foreign countries.

There are other ways to invest your money right now, if you want to know more, then you got to read my next article about “How to invest stocks in a downtrend 2017” – this is a good article to read if you want to invest on volatile market or unsure stocks index forecasts.

Other than that, hope and hold still…and while you’re at it, get my Ebook instead so you can educate yourself with the right financial education.



"Jay Penn" is a Financial Literacy Mentor and Investor who is best known for his Book "Polymath's Profit". He is also an expert in the field of Maritime, Engineering, and Emergency Medical from his past careers. Experienced with Security Analysis, Crisis Prevention, Contingency Planning, and Global Maritime Distress Safety System. Currently instructs Nautical Sciences and is an avid Researcher of Business and Economics. He is also recognized as the "Top Maritime Instructor" for 3 consecutive years in the Maritime Education from 2014; raising the standard for the Maritime Industry and Training.

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