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SOVEREIGN MAN

I didn’t see this covered in any western newspaper

phillipines

October 22, 2012,
Bangkok, Thailand

[Editor’s note: Tim Staermose, Sovereign Man’s Chief Investment Strategist, is filling in for Simon today.]

When it comes to investing in Asia, the two countries which soak up the vast majority of investment chatter are India and China. And with good reason, they’re the two largest economies in the region.

Yet one of the most compelling stories in Asia right now is an often forgotten about corner– the Philippines.

With a population of almost 100 million, the Philippines has a much larger population than Thailand. It’s a huge, growing market.

I lived in the country for nearly 15 years, and I’ve never seen the economy in better shape than it is today. Optimism is high.  The currency is strong.  Inflation is modest.  And most importantly, the economy is generating loads of new jobs.

Many of these jobs are in service sector industries such as calls centers, software development, and business process outsourcing firms that do accounting and administrative work for global businesses.

Consequently, a whole new middle class of educated young people has emerged. The average Filipino is now a 22-year-old graduate who can earn a significant income.

Demographers and development economists call this “the sweet spot.”  As these young people get married and start families, economic activity will accelerate even further.

Moreover, the Philippines is uniquely buffered by its domestic economy. While some of Asia’s export-dependent economies are feeling the malaise in the US and Europe, the Philippines is thriving from local consumer spending.

And recently, something happened to the Philippines that will give the country an even bigger boost for years to come. In fact this one event may have been one of the biggest game changers in the country’s modern history. Yet it was barely mentioned in any mainstream newspaper outside of the Philippines.

Two weeks ago, after decades of instability and fighting, the Philippine government signed a landmark peace agreement with the Islamic separatists in the southern region called Mindanao.

The Muslim majority in Mindanao has long campaigned for a separate state on the island. Now they’re getting an autonomous region, and they’re eager to cooperate in order to attract foreign investment.

The profound impact of this peace deal cannot be overstated. You see, Mindanao is exceedingly rich in metals, minerals, and fertile soil. In a US context, it’s as if California, Nevada, Texas, and Iowa had been off-limits for decades… but then suddenly became available to investors all at once. Major potential.

One way to capitalize on this potential is to own the Philippine peso (which you can do by opening a bank account in the country).

More specifically, though, there are a handful of companies that have been patiently investing in Mindanao for years, waiting precisely for this opportunity. They are about to benefit from the peace in a big way.

I’ve been studying these companies closely and will shortly be recommending one of them to subscribers of our 4th Pillar premium investment publication; the company is small and has recently taken a beating in the market, putting it within my crosshairs. It’s undervalued, and primed for substantial growth with limited downside risk.

In case you’re unfamiliar with the 4th Pillar, this is an investment alert service I manage which specializes in a very particular set of objectives– low risk, high yield, minimal volatility.

As you know, most people hold their savings in a bank account or money market fund. It’s extremely liquid this way, and, theoretically, low risk. But you’re not earning any interest.

My system provides the same characteristics– the portfolio is designed to be very low risk and liquid. Yet it generates a whopping 15% to 25% annually.

Personally, I don’t have the appetite to take financial risks. I’ve worked hard for my money over the years, and I’ve had it with those white-knuckled gambles in the broken stock market. In fact, my first rule of investing is actually “don’t lose money.”

I’d much rather make a 15% to 25% return that is both safe and stable, instead of taking huge risks to make 100% (or perhaps lose everything).

If this concept aligns with your investment objectives, I strongly recommend you give this a read. It’s an honest, clear, no-BS introduction to the 4th Pillar. Simply the facts.

Simon and I have temporarily opened enrolment to new members– the first time we’ve done this in more than a year. Due to the niche nature of this strategy, we intentionally keep the circulation small. And as such, we’re closing the doors again tomorrow at midnight.

Once again, you can read more about the 4th Pillar and sign up here. Of course, new members will receive my special report on Mindanao as well. And even if you return the 4th Pillar for a full refund, the Mindanao report is yours to keep.

To your financial independence,

Tim Staermose,
Chief Investment Strategist, Sovereign Man
Editor, The 4th Pillar.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

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About the author: Born to a Danish father and British mother, in Dar Es Salaam, Tanzania, Tim Staermose has led an international life since the day he was born. Growing up, he also lived in Egypt, Denmark, and Singapore, before eventually settling in Australia, where he completed his education and took out citizenship. Since then he has also lived and worked in Hong Kong, and Manila, Philippines, in the field of equity research — both for a bulge-bracket Wall Street investment bank, and for an independent investment research firm. Today, when not traveling the globe looking for investment and business opportunities for the Sovereign Man community and catching up with his diverse, multinational group of friends, he divides his time between Hong Kong, and the Philippines.

Comments on this entry are closed.

  • blue01

    The Philippines and Indonesia are the new Tigers. Young workforce, big population and w/c do not rely on exports for growth. They don’t have the big spurts during goodtimes as their neighbors but their economy does not slow as much as well during the slowtime. Nice and steady.

  • nobody1

    It is interesting that the economy is doing well…however, there is another side to this story….This is from a Filipino’s perspective: “Many countries like Germany, China, Japan, etc. are mining in this region and using our natural resources for their gain/profit. Many of these areas were preserved for indigenous tribes and many of them had religious communities etc. that were being killed by Filipino soldiers. Sounds like that movie “blood diamond”.

  • http://narth.com Nature 1

    Another thing Western newspapers -as well as most alternative outlets- won’t mention is how, despite having a “growing economy” & a “bright future”, India has a serious population problem & apparently many corruption problems as they refuse to feed their poor, which consists of the majority…900 MILLION: http://www.activistpost.com/2012/08/corrupt-indian-politicians-steal-145.html
    Couple that with the problem of India flooding other nations with “skilled workers” who turn out to have false credentials…Canada’s FSW program is currently suspended in part due to Indian scammers. Would make more sense for the Indians to clean up their dumps & give their poor some food & hygienic places to live before they build nukes, go into space, or take over foreign economies & make other ppl miserable with their unethical habits.
    Also, I hope the Phillipines isn’t intimidated by those ever-fanatical muslims, as it will hinder their progress. All across Europe & elsewhere, muslims continue to demand tolerance whilst causing alarming levels of criminal activity, whilst still trying to convince the public their religion is peaceful & takes care of all problems. If they don’t change their attitudes & behaviours quite soon, ppl’s patience with them will come to a screeching end with dire consequences.

  • PSP

    Perhaps if you don’t consider the Financial Times a Western Newspaper?!? They have been running stories for several months on this.

  • Justin Cooke

    As an American living in Mindanao I totally agree that the recently signed peace agreement may present an unprecedented amount of opportunity down here. The question remains though as to whether it will hold and whether the rebels will stick to the agreement.

    I just returned from two weeks in Thailand and, specifically, one week in Chiang Mai and it was interesting to note the similarities and differences between that city and Davao City. One major thing to watch will be whether the US and Australia ease up on the restrictions and warnings put on travel to Mindanao and Davao City specifically. If they ease up on those restrictions we’re likely to see a flood of investment and tourism dollars coming into a city that badly needs it, presenting a wide range of opportunity for those in a position to take advantage. It may just be an interesting couple of years down here in the south of the Philippines!

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