Wealthy Filipinos

[johnrxx99]

http://www.abs-cbnnews.com/business/11/24/...ay-risky-assetsAs frenzy bailouts and ownership changes among investment banks and insurance firms hit headlines and bottomlines, wealthy Filipinos who park their money in offshore accounts have been more picky in their choice of financial instruments, a private banker based in Singapore observed. "Asian clients, including Filipinos, are going back to banks and have been shying away from brokerage houses and equities," said the banker whose clients include the wealthiest in the Philippines, Thailand, Indonesia and Malayasia. She talked to abs-cbnnews.com/Newsbreak on condition of anonimity. "They call me even in the middle of the night because the volatilities [in the market value of investments] frighten them," she added. Major losses in the offshore investments of Manila's Who's Who has been flooding coffee shop talks. The extent of the total losses, however, remains a mystery. Wealthy Filipinos prefer to invest their personal money outside the country to keep these away from the prying eyes and reach of Philippine-based courts, politicians, their own family members, among others. Private banks cater to the super affluent, defined as those with assets in excess of US$3 million.A resident of posh Dasmarinas Village in Makati City tried to help put their losses in perspective. "Let's put it this way: if my neighbor used to have $15 billion, their offshore losses have cut that to just $5 billion. Sure, they are $10 billion poorer, but they still have $5 billion stashed away."Private banking started in the Philippines when well-off Filipinos began stashing away their cash and other assets in other countries, like Switzerland, after former president Ferdinand Marcos declared martial law in 1972. Philippines is said to be the second biggest source of offshore clients in Asia, next only to Indonesia where investor confidence is also weak. By some accounts, total funds of Filipino clients invested offshore before the start of the US-led global financial crisis is in the vicinity of $60 billion, dwarfing the almost $2 billion foreign direct investment that the government hopes to achieve this year, and could have easily funded the strategic national infrastructure projects. Controversial projects such as the Chinese-funded Northrail and ZTE telecommunications projects only cost $500 million and $330 million, respectively. "They don't have an option but to keep their funds outside the Philippines," the Singapore-based private banker said. "The best they could do is to park their money in safe assets. There are few who are contrarians and would like to bet on low-priced assets. But there are more who are not after the highest possible yield now. They just want to make sure their capital is intact," she added. Similar attitude is observed by finance professionals who cater to mid-range clients, defined as those who at least have $300,000 to $500,000."Nothing beats sticking to the fundamentals: diversify and ladder the maturities," one fixed income dealer said.

[tom_shor]

So they suck all the money out of the economy and hide it elsewhere. Nice guys.