Internet, technology and online investing
MANILA, Philippines - We are living at a time of incredible transformation driven by the Internet. The changes affect our society, culture, and politics at such a basic level that it’s unleashing a new wave of human creativity.
In the first decade of the 21st century, the number of people connected to the Internet globally increased from 350 million to more than 2 billion. In the Philippines, a little more than one-third of our population (or about 34 million Filipinos) have Internet access, and that is expected to grow quickly with cheaper smartphones. The digital divide will collapse once more Filipinos access the Internet through their mobile phones, which have more than a 100% penetration rate.
What does this mean?
It means life as we know it will drastically change. Look at how mobile banking is allowing companies to send their payroll and pay people in parts of the Philippines where law and order is weak through their mobile phones. Eliminating the travel of money means fewer security concerns and less violence, eliminating headaches for managers in those areas.
You don’t have to look far to see how it’s changing our lives. Like online shopping and e-commerce, which in the past year accounted for about P40 billion in online spend, according to Visa and Mastercard.
Retailers are growing e-commerce, minimizing overhead costs and inventories. The growth is partly driven by group buying websites that give as much as 90% off the prices of your favorite establishments and services.
New startups like AVA are building online exclusive brands, while Zalora and Lazada are trying to push online shopping to new heights with safe and secure payment options and generous return policies.
If you trust the Internet with your money, then investing in one of the world’s most dynamic economies — yes, that’s the Philippines — follows.
“Back in the day, access to stock trading was only available to seasoned investors and high net worth clients,” financial analyst Jose Bernardo told Rappler. “The reason for this was primarily due to reach and economies of scale.”
In order to be able to invest in the stock market, you needed to have a lot of money. “The only way you could trade through a broker is if you knew somebody in the brokerage company or if a sales representative approached you to take you on as a customer,” Bernardo said.
Which often left out young professionals and the working class. That is changing.
“The presence of online brokerages are harnessing the power of technology to reach a wider market and to bring down costs,” said Bernardo.
Online investing is made easy by companies like COL Financial, the Philippines’ leading online stockbroker, consistently ranking number one based on the investor survey of the Philippine Stock Exchange for the highest transaction volume in the industry.
“What we wanted to do is to give people the access to buy and sell stocks on their own without having to call somebody,” said Eleanore Teo, COL Financial’s marketing manager. “We’re educating people who want to manage and take control of their own investments.”
The Philippines is now one of the top economies in the world to attract investors with a 6.6% GDP rate helping give the Philippines investment grade status for the first time. As of April, the Philippine Stock Exchange index or PSEi has hit 28 all-time highs this year alone.
What do you need to start? P5,000 for an initial deposit. Apply for an online account and fill out the application form. It’s as easy — and affordable — as that and you can start investing in the companies that are growing the economy. We charge the lowest allowable commission rate at 0.25%, according to Teo, which means you receive the maximum value for your investment. “Less than 1% of the Philippine population is investing in stocks,” she said.
The returns seem worth the risk. “Most of my initial startup investment for stocks was just extra cash I had in the bank,” said Carl Stephen Ong, an entrepreneur and an online stock investor. “I found out that it was a misconception that you needed so much cash to begin with. It's more that I am making my hard-earned money work even harder for me.”
Investing online means you can buy and sell stocks any where. All the information you need to guide you is updated real time, and here’s the best part: you’re not in it alone. You’ll get the help you need to start.
So will the Internet change the world? It's already happening. And it's not all positive.
Technology is only as good as the people who use it. In the last week of April, the Twitter account of news wire service AP (Associated Press) was hacked. A false report of explosions at the White House wiped out US$136 billion from the Standard & Poor's 500 Index in about two minutes, highlighting the risk of computerized trading. The market recovered by the 3rd minute.
The Philippine market is far from the algorithmic trading of the S&P's US$18 trillion market, but we can learn our lessons.
Online trading is here to stay and online investing makes the gains of the market available to a wider sector of the Philippine population.
Don't get left behind.- With reports from Peter Imbong/Rappler.com