More Filipinos are finding the value of saving for their future amid the aggressive push of the Bangko Sentral ng Pilipinas on financial inclusion and low-cost digital financial services.

Based on its 2019 Financial Inclusion Survey, the central bank said 53 percent of Filipino adults started saving, an increase from 48 percent in 2017.

The data was registered after the central bank in 2018 launched the basic deposit account, removing the main pain points of depositors which were maintaining balance and dormancy fees and encouraging more Filipinos to set aside some money through a lower initial deposit of less than P100.

Bank of the Philippine Islands (BPI) Wealth, the trust arm of the Ayala-owned bank, aims to level up Filipinos’ financial management skills and wellness also through more affordable and accessible investing tools.

BPI Wealth president and chief executive officer Maria Theresa Marcial takes on the challenge of turning most Filipinos from mere savers to wise investors with additional sources of passive income.

Citing financial inclusion surveys by the central bank, she said only 1 percent of Filipino adults owned investment accounts for stocks and mutual funds in 2015 and 2021.

“This highlights a significant lack of awareness but also creates a barrier to fully leveraging our growing economy,” Marcial said.

Since the launch of the basic deposit accounts, the central bank said their owners increased by 58 percent to 24.2 million last year from 15.3 million in 2022.

Meanwhile, the country’s economic growth hit 5.6 percent, higher than Vietnam’s 5 percent and Malaysia’s 3.8 percent based on data from the Philippine Statistics Authority and the International Monetary Fund.

Wealth Builder

BPI Wealth reported over P1 billion in assets under management (AUM) in the first half of the year after it launched a year ago low-cost investment fund for lower-income classes that requires a minimum capital of P1,000 from the previous P10,000 requirement.

Through the fund, clients can gain returns from a mix of investments in stocks and bonds categorized as unit investment trust funds or UITFs and Mutual Funds.

Along with the fund’s affordability, Marcial said its digital and app-based processes for account opening and fund tracking enabled more Filipinos to start their investing journey.

“Reaching P1 billion in AUM through digitally opened accounts is a strong validation that our digital initiatives are on the right path. It signifies Filipinos’ readiness to adapt to technologies that allow them to take control of their financial futures through investments,” she said.

To make investing easier, BPI Wealth recently introduced the Portfolio Management Account which allows clients to invest and track their funds in various investment options on a single platform called e-Invest.

For example, this account allows investments in Treasury Bills with a minimum capital of P500,000.

“We have a growing list of sophisticated investors. Going fully digital now gives them the benefit of accessing this specialized investment vehicle at the comfort of their home and their fingertips,” Marcial said.

In June, BPI Wealth shared that it partnered with COL Financial, an online securities brokerage, to offer UITF to more Filipinos.

Marcial said her team expects 15 to 20 percent growth in AUM this year under a low inflation environment. It aims to increase AUM to P3 trillion by 2026.

Last year, its AUM climbed by 40 percent to P1.22 trillion from P875 billion recorded in 2022.

“Our strategic focus will continue to be anchored on sustainability, innovation and customer obsession to help clients grow their wealth with ease,” Marcial said.

BPI Wealth has increased its customers to around 600,000 to 700,000 as more Filipinos developed financial literacy.

Automating investing

Last month, Marcial shared the main features of the BPI Wealth Builder, a first in the country the bank will launch “soon” to make investing an easy habit for Filipinos.

Marcial said BPI Wealth is just waiting for the approval for BPI Wealth Builder from the Securities and Exchange Commission and is optimistic that it could be obtained within this year.

BPI Wealth Builder requires a minimum capital investment of P1,000 and allows automatic top-ups starting at P100.

Marcial said investors’ funds will be placed in multiple investment instruments issued by local and foreign entities, enabling Filipinos to have additional sources of income.

BPI Wealth Builder offers automatic redemption of investment gains to enable flexibility in clients’ cash flows.

As a unique feature that helps investors maximize gains from their investment funds, BPI Wealth Builder activates free rewards and benefits that cover health, medical and life protection.

Marcial said investing always comes with risks but stressed a growing number of Filipinos have chosen to become educated about finances through guided experience from BPI Wealth’s skilled financial advisors and managers.

“We’re seeing markets becoming more buoyant. Bonds are going to do better because interest rates are lower and in equities, we’re seeing renewed interest,” Marcial said.

Global financial market analysts have seen chances of easing policy rates of central banks to commercial lenders as global inflation rates declined, leaving consumers extra cash for diversified investing.

“Deposit rates have started to go down, so fixed-income investors will start looking at other options. But, of course, there will always be risks like geopolitical factors,” she added.

BPI chief economist Jun Neri said the local central bank might again cut its policy rate next month and next year after a total of 50 basis point reduction in August and October. Due to economic uncertainties partly stemming from the official change of US presidency next year from Joe Biden to reelected Donald Trump, Neri said the local central bank might ease rates gradually.

Preparing for retirement

As an asset management firm, Marcial said BPI Wealth helps more Filipinos become financially secure in all life stages by reaching out to companies to create a retirement playbook for their employees as part of its innovative approach to long-term financial wellness.

She said the changing workforce demographics, their attitudes toward retirement, and global economic conditions call for effective retirement plans that augment workers’ benefits from government pension agencies.

According to the 2020 Mercer CFA Institute Global Pension Index, the Philippines’ retirement system ranked among the worst in the world at 36th out of 39 countries.

“As we look ahead, we remain committed to sustaining this momentum and launching more innovative initiatives that will advance our mission of enhancing financial well-being for all Filipinos,” Marcial said.

Expanding rich clients

“A big part of BPI Wealth’s retail segment comes from the GInvest platform by GCash. Our target for the retail investors will be more aggressive,” Marcial said.

BPI Wealth aims to double the number of its retail investors from 600,000 to 1.2 million.

GInvest by GCash, which is also owned by the Ayalas, allows a P50 minimum capital investment for various funds, such as the Philippine equity fund, technology fund and fixed-income fund.

“I think, on average, the investment of GCash users is P8,000. It’s a good start because we also want our broader segment to invest,” Marcial said.

Marcial said BPI Wealth can also attract a portion of the 10.9 million retail customers of the entire BPI group, which has a total of over 11 million customers.

Meanwhile, GCash users climbed to over 60 million or around 83 percent of the country’s adult population last year, according to global market researcher Statista.

Marcial expects more individuals in the country to achieve high and ultra-high net worth in the next two years as projected lower interest rates spur diverse investment opportunities.

She said the high-net-worth group could increase to 32,000 individuals by 2026 from 18,000 in 2021.

Meanwhile, the ultra-high net worth could expand to 441 individuals from 313 during the period.

High-net-worth individuals own at least $1 million in liquid financial assets, while the ultra-high net worth has accumulated at least $30 million.

Marcial said BPI Wealth currently holds 25 percent of the high and ultra-high net worth market, which consists of approximately 20,000 individuals. Moving forward, she added, her team aims to increase that client base by 5 percent.

“When we talk about high net worth and ultra-high net worth individuals, these are people with businesses and have children and grandchildren, so it’s really tapping a broader ecosystem,” Marcial said.

To protect wealth from one generation to another, BPI Wealth offers BPI Private Wealth Signature Experience, an upgraded brand of customer service that provides clients with customized banking, investing, family-wealth planning and lifestyle products and services.

“Clients benefit from a suite of banking solutions meticulously aligned with their individual financial aspirations,” Marcial said.

“Through this innovative approach, we assume the responsibility of managing portfolios while allowing them to establish guidelines, liberating their valuable time to focus on endeavors that hold greater significance — whether it’s pursuing passions or enjoying moments with family and friends,” she concluded.