Can OFWs invest even when they’re abroad?

QUESTION: I’ve been reading your investing articles and want to try it myself. However, I’m an OFW. Is there any way for me to invest in the Philippines while I’m abroad? —Bea via e-mail

Answer: It’s heartening that OFWs respond to financial education positively and quickly. While it’s unfortunate that our banks still require mountains of forms, signatures and personal appearances, it’s not impossible for OFWs abroad to open accounts and start investing. It just initially requires some amount of time and effort to secure your financial future.

Below, I’m going to show you how you can invest in the Philippines even while you’re abroad.

Mutual funds

You can open a mutual fund from overseas. Once you’ve selected the mutual fund you want to participate in, contact an agent who can assist you with opening an account. You can submit forms via DHL or FedEx, and deposit your funds via wire transfer to specific accounts for the mutual fund.

Or, because a lot of mutual fund companies accept deposits from major Philippine banks, if there’s a branch or remittance/representative office near you, you can make your deposit there. You can then view the performance of your mutual fund online. Companies like Sun Life, First Metro, and Philam have online facilities that OFWs can use to monitor their investments.

Also, COL Financial, an online stockbroker, launched in May the COL Fund Source, which is basically a mutual fund supermarket. I’ll tell you more about opening an account with them later.

UITFs

Many banks require a personal appearance for you to open a UITF account with them but some banks can help you open an account overseas. If you already have a PNB account, you can open a UITF account online. They also have the “Global Filipino Funds” UITF, specifically for OFWs and available as a peso money market fund or a dollar money market fund.

If you already have a BDO, BPI or Metrobank account, you can contact your Philippine branch via e-mail or telephone and they can facilitate your application for UITFs by sending you the required forms, which you can fill out, sign and then send via courier.

If your bank was not mentioned, get in touch with it to ask about opening a UITF from abroad. If it’s not possible, set aside a day or two to open an account the next time you’re here and monitor your investments’ performance online.

Stocks

Many online stockbrokers will allow you to open an account from overseas. Once you’ve chosen an online stockbroker, send them an e-mail and they will assist you in your application. Usually, you will need to fill out some forms and send scanned copies of a government-issued ID. Funding your account will involve wire transfers or remittances. COL Financial, for example, will accept two forms of overseas remittance: through iremit.com or by sending a remittance to COL’s BDO account. If you do the latter, you’ll have to e-mail them your receipt to ensure your funds are properly credited. Check with your online stockbroker for options.

Bonds

The Bureau of the Treasury (BTR), through accredited banks, offers Multicurrency Retail Treasury Bonds, available in US dollars or Euros. OFWs can participate for as low as US$100 or €100. OFWs have a tax advantage with bonds, too: for investments of up to $100,000, the BTR will assume the payment of the 20 percent final withholding tax for the Target Retail Investors (which include OFWs and migrants with Filipino citizenship, their parents, children, spouses).

These 3- and 5-year bonds are sold by the following agents: BDO, BPI, DBP, First Metro, Landbank, ING Bank, Metrobank, and PNB. Nominate your settlement account, fill out some forms, submit an ID and your OFW contract to avail yourself of the tax exemption. Consult your bank for more details.

Real estate

According to a MoneyMax.ph article about the best investments for OFWs, “Most OFWs prefer to invest in real estate rather than other vehicles. One reason is because owning a home is tangible and concrete compared to stocks and mutual funds.” But buying property from abroad isn’t as straightforward as the other methods of investing. You need to entrust the process to someone physically present in the Philippines, such as a relative. You will have to give them Special Power of Attorney (SPA) to act on your behalf, a form that needs to be notarized by the Philippine consulate.

They can also apply for housing loans on your behalf, but you will need to provide supporting documents, which vary from bank to bank. The property developer will assist you in the process of purchasing from them as well, but it’s your representative that will be handling everything so it’s very important that you pick someone you trust.

Investing in the Philippines for OFWs is not as easy as it could be, but it’s definitely doable. Hopefully, this article can help OFWs and their families take the first step in providing for their future via investing.

I will conduct finance seminars at Doha, Dubai, Abu Dhabi, Sharjah and Singapore in September and October 2015. For details, please visit my website, www.randelltiongson.com, or follow me on Facebook and Twitter (@randelltiongson).

Randell Tiongson is registered financial planner of RFP Philippines. To learn more about personal financial planning, attend the 49th batch of RFP Program on Aug. 22- Oct 10. For details, inquire at [email protected] or text <name><email><RFP> at 0917-3464126.