The Philippines is home to a relatively small affluent population, and the country’s financial services sector is somewhat unsophisticated relative to many of its ASEAN-6 neighbors and other developed nations. Retail participation in the equities and mutual fund markets is very low, with the bond market traditionally more popular but the majority of allocations still held in deposits.
However, very strong economic performance over recent years and a new government committed to shaking off the image of the Philippines as the ‘sick man of Asia’ bodes well for the future of its financial services sector and the population’s financial literacy. Local wealth managers may not currently have a particularly large lucrative target market onshore, but this segment will grow significantly and wealth managers need to be ready to capitalize on the opportunity.
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Wealth in the Philippines: Sizing the Market Opportunity analyzes the Filipino wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically the report:
– Sizes the affluent market (both by the number of individuals and value of their liquid assets) using Verdict Financial’s proprietary datasets.
– Analyzes which asset classes are favored by Filipino retail investors and how their preferences impact the growth of the total savings and investments market.
– Examines HNW clients’ attitudes towards non-liquid investments, such as hedge funds, property, and commodities.
– Identifies key drivers and booking centers for offshore investments by Filipino HNW clients.
– At the end of 2015, 1.12% of the Philippines’ adult population was considered affluent, and this segment is forecast to grow by 50% over the next five years. The HNW segment accounts for 0.03% of the population, but holds over a third of the country’s liquid wealth.
– The Philippines’ retail investments market has doubled over the last five years, and Verdict Financial forecasts a compound annual growth rate (CAGR) of 9.2% to 2020 – adding $78.26bn in assets.
– The vast majority of HNW assets – 97.5% – are allocated to traditional liquid assets. Of the 2.5% held in illiquid assets, 95% is allocated to property (mostly direct property holdings).
– HNW Filipinos hold 12.8% of their total liquid assets offshore – a relatively small proportion in comparison to their neighbors in Indonesia, Singapore, and Hong Kong, where HNW investors offshore a third or more of their wealth.
Reasons To Buy
– Benchmark your share of the Filipino wealth market against the current market size.
– Forecast your future growth prospects using our projections for the market to 2020.
– Identify your most promising client segment by analyzing the penetration of affluent individuals in the Philippines
– both at country and regional level.
– Evaluate your HNW proposition by understanding how regulation is affecting your HNW clients.
– Review your offshore strategy by learning about HNW motivations for offshore investments and their preferred booking centers.
Related Reports by Radiant Insights:
Wealth Management Super League 2016; Comparing the performance of the world’s leading wealth managers –
Super League In-Depth Analysis: Barclays Wealth 2016 –
Table of Content
Critical success factors
Sizing and Forecasting the Wealth Market in the Philippines
Affluent individuals account for just 1% of the adult Filipino population
The Philippines’ affluent population is still extremely small but there are signs of an emerging investor class
HNW investors account for less than 0.1% of the market and the very rich will get richer
Overall growth of total liquid assets has been highly variable in recent years
Wealth held by affluent investors has risen robustly, providing wealth managers with ample opportunities
Filipino HNW individuals hold over one third of total liquid assets, a share that will rise
Drivers for Growth in the Filipino Wealth Market
The retail savings and investments market will continue to grow strongly
Upgraded GDP forecasts and continued government investment will keep the retail market buoyant
The Filipino retail market is heavily weighted toward deposits
Bonds and mutual funds will show the strongest growth rates moving forward
Deposits will see slower but steadier growth, supported by benign inflation and moderate interest rates
The formalization of savings will ensure robust deposits growth
Bonds are significantly more popular in the Philippines than the rest of Asia
A stronger local sovereign debt market has fueled growth in bond holding
Equities and mutual funds are more closely aligned with the fortunes of the stock market
Filipino stock market performance has been extremely variable in recent years
The performance of the stock market also has a direct impact on equities
HNW Investment Preferences
Filipino HNW individuals keep the vast majority of their assets liquid
Property is the most popular HNW illiquid asset, reflecting a lack of local alternatives
Filipino HNW individuals hold 12.8% of their assets offshore
Access to more investment options and client anonymity are the top drivers of offshore investment
China and Hong Kong are now the most popular booking centers for Filipino HNW individuals
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