The Definitive Guide to Stock Trading & Investing in the Philippines

Last Updated on – Jun 10, 2024 @ 6:34 am

Quick Take

How can I start investing in stocks in the Philippines?

To start investing in stocks in the Philippines, you need to open a trading account with a licensed stockbroker accredited by the Philippine Stock Exchange (PSE).

You can choose from traditional brokerages or online trading platforms like COL, First Metro Sec, or even GCash.

After opening and funding your account, you can start buying and selling stocks through the broker’s platform.

Investing in stocks can be a good idea for several reasons:

Potential for GrowthOver the long term, stocks have historically provided significant potential for growth. Although individual stocks can be volatile, the overall stock market has tended to increase in value, outperforming many other types of investments like bonds or savings accounts.
DividendsSome stocks pay dividends, which are portions of a company’s profit distributed to shareholders. These payments can provide a steady income stream and can be reinvested to purchase more shares, compounding the growth of your investment.
DiversificationInvesting in a variety of stocks can help diversify your investment portfolio. Diversification reduces risk by spreading investments across various economic sectors and geographic regions, helping to mitigate losses if one area underperforms.
LiquidityStocks are generally liquid, meaning they can be quickly and easily sold for cash. This liquidity makes it easier for investors to enter and exit positions and access their money when needed.
Ownership in CompaniesBuying shares means buying a piece of a company. As a shareholder, you benefit directly from the company’s growth and success.
Inflation ProtectionHistorically, investments in the stock market have provided returns that exceed the rate of inflation, helping to preserve the purchasing power of your capital over time.

What is Stock Trading & Investing?

Stock trading involves buying and selling shares of companies in an attempt to make a profit. These shares represent a portion of ownership in a company.

When you purchase a stock, you become a shareholder and gain potential financial benefits, like receiving dividends or selling the stock at a higher price than you paid.

Let’s say you want to buy a box of pizza. Realizing you’re 100 pesos short, you decide to have two friends share some of the costs in exchange for a few slices. For our purposes, these slices are the “stock”.

Rick offered to chip in 50 pesos in exchange for two slices. Marie offered the same deal.

They’re now both “shareholders”.

This, my friend, is the basic concept of stock trading. At its core, it’s all about making money through buying and selling stock. Whether you’re the company (pizza owner) or shareholder (Rick and Marie), money is made whenever an actual sale of stock (pizza) is made.

So how do you invest in stock, exactly? Going back to our example, Rick and Marie invested their money by buying your pizza. To make things easier, let’s continue with our scenario to learn the different ways to earn money from stocks.

Related: 10 Best Investments for Filipino Millennials

How does the Stock Market work?

What’s the first image that comes to mind when you hear the words, Stock Market?

When I was younger, it was an image of people yelling and punching orders through computers while glancing at numbers on big, wide screens. Blame it on the movies. I had no idea what they were shouting about.

All I know is that they were making money.

At least I got that last part right. The Stock Market is essentially a marketplace where people buy and sell stuff. But instead of produce, people trade money and stocks. Simple enough, right?

But in order to fully understand the whole concept of stock market trading, we have to understand what a “stock” is first.

Investopedia tells us that “A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings”.

In layman’s terms: It’s a “piece” of a company.

How can you earn money from buying/owning stocks?

Later that day, friends of Rick and Marie saw their pizza and offered to buy it from them. One friend offered Rick 35 pesos per slice while Marie’s pal proposed to buy all four slices for 100 pesos (25 pesos each).

They happily obliged. Both of them were able to net earnings of 5 pesos per piece.

Since Rick and Marie were able to sell their pizza, they made a profit. However, they also ran the risk of not getting anyone to buy their pizza—if their original intent was to resell it for profit. With an actual pizza as an example, its value depreciates with each hour that passes. After all, who would want to buy stale, old pizza?

In stock trading, you earn money when the value of stock you own appreciates and you sell it. In other words, its price per stock went up from what you originally purchased it for allowing you to sell with a profit. This is called Price Appreciation.

Another way you can earn is if the company you have stock on decides to share its earnings to stockholders. This is called Dividends. You can receive this type of income in the form of cash or stocks.

Lastly, Stock Rights is an opportunity given by companies to stockholders that allows them to purchase shares at a lower-than-current market price.

There are different strategies and timeframes for trading stocks, ranging from long-term investments to short-term trades.

Short-term trading styles include day trading, where positions are held for just one day, or swing trading, where positions are held for several days to capitalize on expected upward or downward market shifts.


How to Start Investing in the Philippine Stock Market

Investing in the Stock Market is a lot simpler than it sounds. With the advent of online brokers and cashless payment systems, setting up an account and trading has never been easier.

Here are the main steps:

1. Do your due diligence and understand the risks involved 

As with any financial endeavor, effort and diligence are keys to avoiding the pitfalls of lost money. Make an effort to understand key concepts. Know the risks.

If possible, strive to continuously learn more about the whole thing to increase your chances of making better decisions. Remember, it’s your money we’re talking about here.

2. Open a stock trading account with an online broker 

Most online stockbrokers generally require the same steps for new account holders.

First, you visit their website and download a registration form. Fill it out, submit it back to them, wait for approval, then start funding your account. We’ll discuss the actual steps required for each online broker in the next few sections.

3. Fund your account and start trading

Once your account is up and running, you may begin funding it for buying your first couple of stocks.

Also Read: How to Invest in Mutual Funds in the Philippines


Top Online Stockbrokers in the Philippines

Ask anyone currently trading in the stock market who their broker is and these two names are most likely to come up: COL Financial and First Metro Sec. And for a reason. These two are popular especially to newbies because of the ease in setting up the accounts and in using their website.

1. COL Financial

Established in 1999, COL Financial is considered to be among the top online stockbrokers in the Philippines. With an asset base of more than Php 62 billion from 200,000 customers, it prides itself as one of the pioneers in the digitalization of stockbroker services here in our country.

Here are some of COL’s offerings to its customers:

  • Direct market access and order execution
  • Expert insight and research
  • Streaming data and live charting
  • 24/7 access to your COL account and portfolio
  • Lowest commission rates
  • Mobile device access (iPad and iPhone)
How to open an account in COL financial

1. Visit their website. Click “Open an Account”- COL offers 3 types of accounts depending on your initial investment.

  • COL Starter (Minimum Investment: P5,000) – An entry-level account suitable for long term investing. Provides access to basic research reports, standard market information, and end-of-day charting data.
  • COL Plus (Minimum Investment: P25,000) – For active traders. Provides streaming quotes, comprehensive research reports and live chart data with some customizable features.
  • COL Premium (Minimum Investment: P1 Million) – For the premier investor. Provides access to all available features and a personal relationship manager dedicated to assist you.

2. Download and complete the application forms – After deciding on an account, you need to download and print forms and submit additional requirements to proceed.

3. Submit all forms and requirements – You can submit all requirements to COL Financial’s office in Ortigas or though iRemit branches. Another options is to attend a free COL seminar that they conduct regularly and submit the requirements there.

4. Funding your account – The last step is putting funds into your account so you can start trading. You can personally visit their office or through online banking. One important thing to note is that you should fund your account within 3 months after you submit all requirements. Failure to do so will require you to re-submit everything again.

How to fund your COL Financial account

COL Financial features a wide array of options for funding your account. These include bank transfers from BDO, Metrobank, BPI, and AUB. For specific instructions, please visit this page.


2. First Metro Securities

First Metro Sec is the stock brokerage arm of the Metrobank group. Established in 1994, they have been a trusted provider of online stock brokerage services in the country.

If you have an existing Metrobank account, the initial deposit will be waived. An initial deposit of Php 25,000 is required for non-account holders.

How to open an account with First Metro Sec

1. Visit their website. Click “Get Started” then “Open an Account”

2. Select from three options:

  • For Metrobank account holders.
  • Other Bank depositors (valid ID required).
  • On-site account opening (you download the form to complete it then submit it personally).

3. After completing all the required fields, an email will be sent. Click on the link to verify your account.

4. Upload the required documents.

5. For non-Metrobank account holders, they will set-up a video call with you.

6. An email confirming your account has been set-up will be sent

How to fund your First Metro Sec account
  1. Visit the Metrobank Online website and log in with your credentials.
  2. To add FirstMetroSec as a biller, navigate to CONTACTS, then click on BILLERS. Click the Add (+) button.
  3. For the Contact Name, enter your preferred label or nickname. Under Biller, select First Metro Securities Brokerage Corporation. For Subscriber Number, input your FirstMetroSec Account Code (e.g., OTAXXXXXX or OTXXXX-X). Type 660 for the Reference Code, then click CREATE.
  4. Enter your passcode to confirm.
  5. From the Dashboard, select Pay Bills.
  6. Input the payment amount, select your registered FirstMetroSec biller, and choose your source account. Select the payment schedule (NOW or LATER), then click NEXT.
  7. Review your transaction details, then click CONTINUE.
  8. Enter your Metrobank passcode.
  9. Review your transaction summary and click DONE.

You can also fund it through Bills Payment, OTC, Deposit slip, and other online banking services. For steps, please visit this link.


3. BDO Securities

BDO Securities is the investing subsidiary of BDO Capital & Investment Corporation, one of the top-performing banks in the Philippines.

This full-service brokerage firm offers an expanded suite of both global and local investment products beyond equities. They offer trading, research reports, diversification of investment, and wealth management.

BDO Securities aims to enable Filipinos across different life stages to achieve their short, medium, and long-term financial objectives.

Eligibility
  • Must be at least 18 years old
  • Must not be applying under a Sole Proprietorship account 
  • Must have a valid existing BDO Account
  • Must not have multiple user IDs enrolled in BDO Online Banking
How to open an account with BDO Securities
  • Sign up here.
  • For those who already have a BDO account and have activated online banking, simply log in using your username and password. An OTP will be sent to your mobile number.
How to fund your BDO Securities Account
  • Log in to your online trading account. You’ll receive an OTP through SMS.
  • On the home screen, click the “Fund Account” icon.
  • Select the currency you prefer, and select from which account you want to add your funds. You can also view your balance.
  • Enter the amount you want to fund, then click deposit.

Related: 8 Best Online Investment Platforms in the Philippines


4. BPI Trade

BPI Trade is the Bank of the Philippine Islands Securities Corporation’s stock exchange trading platform which promises seamless fund movement between the clients’ BPI banking accounts and their BPI Trading accounts.

How to Open a BPI Trade Account
  1. Go to https://new.bpitrade.com/. Select “open an account” and fill out the form with the required details and print it. 
  2. Bring the form to the nearest BPI or BPI Family Savings Bank. Make sure you have at least one valid ID with you, too.
  3. Wait for an email with the instructions on how to fund your BPI Trade settlement account. You will get this in three to five banking days after you apply. There is no minimum amount required when you open an account, but once you fund your settlement account, you have to keep the ADB at PHP 500, at least.
How to Fund your BPI Trade Account

Once you got your account open, you just need to log in to your BPI online account. There, you can find your settlement account number (from the main tab, choose account information, then profile tab). You can fund your account in four ways:

  • Through BPI Express online, transfer funds between your deposit account and settlement account.
  • If you prefer face to face transactions, simply do an over-the-counter deposit to your settlement account at the nearest BPI branch.
  • Through BPI ATM, you can transfer funds straight to your settlement account but your settlement account should already be enrolled for this to work.
  • Do a simple funds transfer via BPI mobile app.

Note that your transfer won’t reflect immediately in your settlement account. Give it a day, if you deposited before 10 pm and even two banking days if you deposited after 10 pm.


5. AB Capital Securities, Inc.

What is AB Capital?

Formerly known as Anscor Hagedorn Securities, Inc. or AHSI, AB Capital Securities, Incorporated is among the country’s top stock brokerage firms and one of the pioneers in the online stock trading industry.

It promises reliable stock research reports and smart recommendations for Filipino investors who need guidance with their stock investing decisions. 

How to Open an ABCeasy Account 
  1. Make sure you have a scanned copy of at least one valid ID, three signatures on a piece of paper, a copy of your proof of address, and bank account details.
  2. Take a photo with your valid ID
  3. Go to abcapitalsecurities.com.ph/register.php.
  4. Fill out the form with the necessary information.
  5. Upload all the requirements.
  6. Fund your account (initial deposit).
  7. Wait for a video call verification and activation email. 
How to Fund Your ABCeasy Account
  1. You can do an over-the-counter deposit at any BDO or Metrobank branch.
  2. You can do an online fund transfer through the platforms of our partner banks (BDO and Metrobank).
  3. You can deposit a cheque at any ABCSI branch.
  4. You can transfer shares to AB Capital from another broker.
  5. If you are abroad, you can wire transfer any amount to your AB Capital account and your US Dollar will automatically be converted.

6. Philstocks

What is Philstocks?

Established in 2001, Philstocks Financial Inc. has been providing quality trading experience to new and experienced investors, traders, and licensed agents.

They have a feature-packed online trading app that makes the experience easier when you’re on the go. They also provide portfolio management and a personalized trading experience.

How to Open a Philstocks Account
  1. Visit https://registration.philstocks.ph/.
  2. Read and agree to all the terms and conditions.
  3. Fill out the forms with your personal information.
  4. You’ll receive an email with the Customer Account Information Form, verification code, and signature counts that you need to download and fill out as well.
  5. Prepare 2 valid IDs, either 2 primary IDs or 1 primary ID and 2 secondary IDs.
  6. Upload your IDs and selfie for verification
  7. Bring all your requirements to the head office or the nearest Philstocks branch. If you are unable to appear in person, you can contact 542-3919 or email them at sales@philstocks.ph. You’ll reach a licensed salesman who can assist you with your application.
How to Fund Your Account
  1. You can deposit via Bancnet/Megalink through the Weepay Online Payment platform.
  2. You can do an over-the-counter deposit at any BPI or BDO branch.
  3. You can deposit your funds at any Philstocks Financial, Inc. branch.
  4. You can fund the account via BPI Bills Payment or BPI/BDO Mobile app.
  5. You can do a wire transfer.

7. ALPHASEC

Incorporated in 1989, Alpha Securities or ALPHASEC is a boutique operation that has been providing high-quality services to public investors.

The company has been nominated for PSE Bell Awards for Corporate Governance.

How to Open an ALPHASEC Account
  1. As a policy, any new investor will be assigned an agent who will do a face to face interview and discuss policies regarding account application, payment schemes, and other important information the investor needs to know. 
  2. Download the Customer Account Information, the Customer Specimen Signature Card, and Online Trading Agreement forms from the website.
  3. Fill out the forms and prepare  two (2) copies of government-issued IDs. You will also need to provide a valid email account, as well as proof of billing with the same address on your ID and application form. 
  4. You have to submit a letter of intent to ALPHA indicating that you want to use the online trading facility, too. 
How to Fund the Account
  1. You may deposit funds at the ALPHASEC office or have the company messenger pick up the cheque from your location. 
  2. If you deposit to ALPHASEC’s bank account, you need to send a scanned copy of the deposit slip for verification and receipt issuance.

8. BASecOnline

BASecOnline is the online platform of BA Securities, a reputable stock brokerage in the country that provides sales, research and analysis, trade execution and post-trade service for their clients.

It was the first to offer PSETradex when it launched in 2013. 

How to Open an BASecOnline Account
  1. Fill out this form and submit.
  2. Wait for their salesman to call you or reach out to you via email to discuss the requirements needed.
  3. Fill out and sign the Customer Account Information Form, scan it, and send to sales@basecurities.com.ph.
  4. Wait for notification from BA Securities and finally register to BASecOnline using the Trading Account and IC number that will be given to you.
  5. Note that you are going to need two valid government-issued IDs with photo and signature as well.
How to Deposit Stock Certificates
  1. Take your Stock Certificates to their office.
  2. Bring a photocopy of your IDs and a signature card.
  3. Wait for the Stock Certificates to be cleared at the Stock Transfer Office.
  4. BA Securities, Inc. will credit the shares to your account and then you can put it up for sale.

9. GStocks 

GStocks is the online retail security trading service of AB Capital Securities, and it’s available on the GCash app. Through this in-app feature, investors can easily buy, sell, and manage their securities in companies listed on the Philippine Stock Exchange. 

GStocks PH is committed to giving investors a seamless and reliable trading experience by offering the following:

  • 24/7 portfolio access
  • Direct research reports
  • Direct order entry and modification
  • Stock watch lists

Not only that, but users can also take advantage of the following:

  • Real-time quotes
  • Bid and Ask column
  • Company disclosures
  • Intraday charts
  • Stock price alerts
  • PSE news
How to open a GStocks account

Here are the eligibility requirements to sign up for GStocks PH:

  • At least 18 years old
  • A Filipino living in the Philippines
  • Fully verified GCash user
  • Updated GCash information in the last 2 years
  • 1 valid government ID 

Note: If you’re an OFW or seaman, you can still open an AB Capital Trading Wallet as long as you have an SSS number and TIN.

Foreigners can also open an account if they present their passport and valid government ID. 

Here’s how to open your account:

Step 1: Open your GCash app and click “GInvest.”

Step 2: Select “GStocks PH.”

Step 3: Click “AB Capital Securities, Inc,” and select “Get Started.”

Step 4: Review your personal information. Then, affix your signature 3 times and take a photo.

Step 5: Input your employment details and other information and review. 

Step 6: Fill up the Investment Mindset Questionnaire and click “Next.”

Step 7: Upload 3 photos showing your signature. Then, accept the disclosures and agreements.

Step 8: Wait for your application to be accepted. The result will be sent to your email within 7 banking days depending on the assessment of your documents.

How to fund your GStocks account

Topping up your account is easy. Here’s how you can do it:

Step 1: Open your GCash app. Tap “GInvest,” select “GStocks PH,” and click “AB Capital Securities, Inc.”

Step 2: Select “Top up” and input the amount you want to top up. 

Step 3: Review the amount and confirm. You will be redirected to a page to confirm your successful top-up.

Keep in mind that the amount may take up to 1 day to reflect in your AB Trading Wallet. 


5 Things to Consider in Choosing an Online Stockbroker

All three online investment brokers we mentioned above are excellent choices. At the end of the day, however, it all boils down to your preferences and needs. Here are some tips to help you streamline the process of picking the right broker for you:

1. Broker Fees and Charges

All online stockbrokers charge a fee for their services. No matter how much you have in the account, it’s a good idea to familiarize yourself with the different fees structure featured by each online stockbroker.

The differences on fees among brokers may look small but if you have a large amount of assets, these differences can be significant enough. In general, the lesser fees the better.

2. Features, Usability and Reliability of the Online Broker’s website

The main reason why you opt to use an online broker is convenience and speed. Having the ability to check and trade using your computer and smartphone is what makes it tick.

That’s why it should be a given that all these online features are up and running and easy enough to use when you’re accessing it. You’re dealing with money here and time is of the essence. A few minutes (or seconds) can spell the difference between a gain or a loss.

3. Hassle-free funding and withdrawals

The ease of which you can deposit and withdraw money into your account is crucial. Not only does it save a lot of time, but it also makes you more disciplined in investing since it removes the friction brought about by the hassles of the physical process.

Imagine visiting the bank to deposit some additional funds only to be stuck in traffic for an hour. Not fun. You might end up scrapping the whole idea and possibly losing on some potential gains.

Some online stockbrokers offer seamless integration with banks allowing you to deposit and withdraw funds the same way you send bill payments online. This makes things a whole lot easier.

4. Trading Tools, Researches, and other Features

Assessing and predicting a stock’s value is the name of the game here. That’s why you’ll need all the resources and data you can get to make a sound decision.

Some online stockbrokers like COL Financial and First Metro Sec feature charts and additional resources on their websites that may help guide you in your selection.

5. Top-Notch Customer Service

The need to ask questions, concerns, feedback, and report service issues pops up from time to time. Having speedy and helpful customer service assistants ready to address your queries is a nice bonus.


10 Stock Investing and Trading Tips for Beginners

It’s always exciting the first time we try something out, right? Sometimes, the anticipation itself is enough to give us a feeling of exhilaration that builds up to the actual moment we do it.

And I’m willing to bet that you’re reading this because you heard or read about other people’s success stories in the stock market. Stories of regular folks making thousands and even millions in just a few months.

It’s exciting.

You’re ready to pull the trigger, ready to get a piece of the action. But before you dive into this whole thing, here are some useful advice:

1. Due diligence is required

Take time to understand and study how the stock market works. Since you’re reading this, you’re off to a good start.

Know that for every incredible success story out there, there’s dozens of less fortunate ones. Should this deter you in investing in the stock market?

Absolutely not.

But it should serve as a caution. More often than not, only modest gains are realized. But that’s the great thing about it. It shouldn’t be like gambling. It’s never always a win-or-lose situation.

A lot of people delve into stock trading for modest gains. They use it as an alternative and faster investment vehicle to reach their ideal financial goals. And you can do it too. With the right knowledge, discipline, mindset, and expectations.

Related: Investment Statistics in the Philippines

2. Know your Risk Profile

Risk profile refers to a person’s willingness to take risks. It’s typically used in determining a person’s investment allocation strategy.

For example, a high-risk profile has more tolerance towards high volatile stocks that can reach dramatic gains yet at the expense of a higher chance of incurring a loss. It’s a “Win Big or Go Home” mindset.

Conservative profiles tend to favor “safer” investments with the trade-off being the slower growth pace of gains. Some use a mix of both, combining both risk-heavy and conservative stocks in their portfolio.

By knowing what your Risk profile is, you can craft an investment strategy that aligns well to your investment philosophy and goals.

3. Stick to your financial plan

Stock trading opens up a wonderful opportunity to grow your money at a faster rate versus banks. This doesn’t mean, however, that you should put all your money into it. Be smart.

Stick to your financial goals and obligations (having emergency funds in the bank, investing your money in other vehicles, etc) so you won’t run into the risk of losing it all in a highly volatile scenario.

Having insurance, emergency funds, savings for personal use, educational fund, and others are important and should not give way to the more “exciting” stock market investment.

4. Brush up on the basics first

The first thing you learn when playing basketball is dribbling the ball. The basic mechanics of throwing down the ball and bouncing it back to your hand requires practice and fine-tuning.

In trading stocks, it’s crucial to learn about the most commonly-used definitions and jargons so you can keep up to speed to the material and research you’re analyzing. You can’t begin advancing your knowledge if you can’t even understand the terms you’re reading.

You can start by reading books about investing, watching YouTube videos, tutorials, articles and more. Google is your friend. You may also join Facebook groups or join communities of like-minded individuals so you can further expand your knowledge.

5. Learn to manage your emotions

Think of all the unfortunate events that happened in your life simply because you lost your nerve. Sucks, doesn’t it? More often than not, bad things happen when we let our emotions get the best of us, especially when it comes to money.

It’s easy to fall into the hype and FOMO of “hot” stocks that everyone seems to be snagging left and right. Decisions of whether to buy or hold affected by our emotional attachment and ego. Learn to use your brain over your feelings as much as you can.

Stick to your game plan.

Research and analysis are still your best tools when it comes to determining a stock’s value.

6. Timely and constant monitoring is crucial

Some people might argue that they’re no longer checking their reports as often since they’re invested in blue chip stocks (more on this later) and are in it for the long game.

While there’s some bit of wisdom in it, constant monitoring is still recommended. Remember a big reason why you’ve chosen to invest in the stock market is due to the higher gains you can get versus letting your money sit in the bank. And inaction can be as costly as being hyperactive.

You might miss some great opportunities if you let your money stay with underperforming stocks. Find a good balance on your activity scale and allot a specific period for checking your portfolio’s performance.

7. Be mindful of fees and charges

We mentioned this on the previous section. All brokers are not created equal and knowing which ones provide the service you need with the corresponding fees you can live with is an important factor to consider in the whole process.

Some investors might opt for a broker with higher fees just because he finds their service and features more robust.

Also, both the Phil Stock Exchange and Securities Clearing Corporation of the Phil charge transaction fees. There’s also a sales tax when you sell your stocks.

8. Consider your long-term goal

Some people invest in the stock market with a specific goal in mind. Some do it to save for retirement, others leverage it for funding future educational expenses, some invest to fund their dream home or vacation.

We all have our reasons. By knowing how much your goal is at a certain point in time, you can have an idea of how much you will need to invest and allocate to your portfolio. It also sets the tone for your investment strategy since you now have a target figure and date.

A portfolio’s growth depends on 3 main factors:

  • Capital
  • Net annual earnings on your capital
  • Number of years of your investment
9. Start Small

Did you know that less than 1% of Filipinos trade stocks? There’s a belief that stock trading are only for the affluent and the rich because it requires tons of capital to invest. As you’ve seen the plans from online stock brokers earlier, this is not true.

You can start with as little as Php 5000.

For beginners, it’s recommended to start small so you can test the waters while accumulating the know-how about the whole process. As you get the hang of it, gradually allocate more funds into it while constantly expanding your knowledge.

Important: Only invest money you’re willing to lose.

Also Read: How to Become Rich

10. Know about the companies you’re buying

With all the ticker symbols and information flashing on your screen, it’s easy to get overwhelmed when you’re starting.

Don’t fret, stick with the core principle of stock trading which is to buy low and sell high. And to do this, you have to do your research on the companies that you are buying.

Don’t simply follow the herd.

The most successful people in the stock market are those who make it a point to truly understand what a company does and how it operates. They understand and see the underlying values that will help them determine if a company is worth investing on.


Top 10 Blue-Chip Stocks in the Philippines

What are Blue Chip stocks?

Blue chip stocks belongs to companies that have operated for many years and typically have market capitalization of billions of dollars.

These are the well-established, household name companies that are market leaders in their respective sectors.

Below are some of the top publicly-listed companies and stocks to invest in the Philippines (stats based on Investing.com’s historical data):

1. SM Prime Holdings Inc. (SMPH)

Industry Real Estate
Date FoundedJanuary 6, 1994
HeadquartersPasay City
What they doDevelops, operates and maintains popular commercial shopping centers.
Business SegmentsMalls, Residential, Commercial & Hotel, and Convention centers.
10-Year Return+67.48%

2. Ayala Corp. (AC)

IndustryReal Estate
Date FoundedJanuary 23, 1968
HeadquartersMakati City
What they doHolding company that provides real estate, telecommunications, utilities, logistics, financial and insurance services.
Business SegmentsParent Company, Real Estate and Hotels, Financial Services and Insurance, Telecommunications, Water Infrastructure, Electronics Manufacturing, Power generation, and Automotive, IT/BPO and Others.
10-Year Return-2.64%

3. Jollibee Foods Corp. (JFC)

IndustryGaming, Lodging & Restaurants
Date FoundedJanuary 28, 1978
HeadquartersPasig City
What they doDevelops, operates, and franchises fast food stores under the trade name Jollibee.
Business Segments Food Service, Franchising, and Leasing
10-Year Return+28.42%

4. BDO Unibank, Inc. (BDO)

IndustryBanking
Date FoundedAugust 16, 1967
HeadquartersMakati City
What they doProvision of commercial banking services.
Business SegmentsCommercial Banking; Investment Banking; Private Banking; Leasing and Financing; Insurance; and Others.
10-Year Return+122.13%

5. Metro Pacific Investments Corp. (MPI)

IndustryUtilities
Date FoundedMarch 20, 2006
HeadquartersMakati City
What they do Engages in real estate and infrastructure project investment.
Business Segments Water, Toll Operations, Power, Healthcare, Rail, Logistics, and Others
10-Year Return: +10.68%

6. Globe Telecom, Inc. (GLO)

IndustryTelecom
Date Founded1935
HeadquartersTaguig City
What they doProvision of telecommunications services – Digital mobile communications, fixed line communications, and broadband services
Business SegmentsMobile Communication Services and Wireline Communication Services
10-Year Return+22.36%

7. Bank of the Philippine Islands (BPI)

Industry: Banking
Date Founded: August 1, 1851
Headquarters: Makati City
What they do: Provision of commercial banking services
Business Segments: Consumer Banking, Corporate Banking and Investment Banking
10-Year Return: +44.8%

8. Megaworld Corp. (MEG)

Industry: Real Estate
Date Founded: August 24, 1989
Headquarters: Makati City
What they do: Property-related activities such as project design, construction and property management
Business Segments: Real Estate, Rental, Operations, and Corporate and Others
10-Year Return: -60.35%

9. San Miguel Corp. (SMC)

Industry: Oil, Gas & Coal
Date Founded:1890
Headquarters: Mandaluyong City
What they do: Manufacturer and seller of beverage, food, and packaging products.
Business Segments: Beverage, Food, Packaging, Energy, Fuel and Oil, and Infrastructure.
10-Year Return: +80.65%

10. Universal Robina Corp. (URC)

Industry: Consumer Products
Date Founded: September 28, 1954
Headquarters: Quezon City
What they do: Manufacturer and distributor of consumer food products.
Business Segments:Branded Consumer Foods, Agro-Industrial Products, Commodity Food Products, and Corporate Business
10-Year Return: +1.35%

Also Check: PSE Stock Price: Complete List of Philippine Stocks


Fundamental Analysis vs. Technical Analysis

In stock market investing, there are two main schools of discipline when it comes to analyzing the value of a stock: Fundamental Analysis and Technical Analysis. To better understand what each is for and how they differ, read on to the next few sections.

What is Fundamental Analysis?

Here’s our key take-away, Intrinsic Value.

Fundamental Analysis is the study of the underlying factors that contribute to a company’s financial health and earning performance. Why is this important?

Fundamental Analysts believe that by identifying factors like a company’s earnings, growth, and value in the market is the best way of pinpointing the value of its stock.

In this investing philosophy, even external factors are considered (e.g overall economy and industry conditions) because Fundamental Analysts believe that these two can affect current and future performance of a company’s stock.

Bottomline, it uses health and performance as key metrics for determining a quantitative rating to decide if a company’s stock is overvalued or undervalued.

What is Technical Analysis?

This type of investing method focuses mainly on stock volume and price.

Technical Analysts argue that all intrinsic values are already factored into the price, hence it’s no longer a priority to study them.

Technical analysis rely heavily on stock charts to spot patterns and trends that will allow them to forecast a stock’s future performance.

Difference between Fundamental Analysis and Technical Analysis

If I was tasked to explain the difference between Fundamental and Technical analysis to a complete stock market newbie, I’ll use a simple weather analogy.

Some people may try to guess the chance of rain using a number of factors: location, humidity, wind direction, cloud formation, scent of air, the sky, and even behavior of certain animals. These are “intrinsic” values. These people use Fundamental Analysis to determine if it will rain or not.

On the other hand, some people may simply look at historical data of the previous days and weeks, analyzing weather reports to predict the chance of rain. These people use technical analysis.

To be clear, you’re not supposed to use one style of investing only. In fact, most investors use a combination of both to determine a stock’s worth. And it makes sense, right? Why restrict yourself to a particular style when you can have the best of both worlds?


10 Active Stock Trading & Long-Term Stock Investing Strategies

If Technical and Fundamental Analysis are the “tools” needed to make sound investment decisions, Active and Long Term trading reveals an investor’s approach to trading with respect to time.

Active Trading is based on short-term stock movements and can be categorized into 4 subtypes:

1. Day Trading

As its name implies, it’s all about buying and selling securities within the day. Positions change the next market day.

2. Position Trading

Day traders use short-term charts for making their next move. On the other hand, Position traders use longer-term charts and a combo of other strategies in order to “see” the market trend.

I like to think of them as surfers. They hop on the next wave (trend) and jump off once it dies down. It’s a harder to implement though during periods of high market volatility.

3. Swing Trading

During the time of market price volatility in between trends, that’s when Swing traders get in on action.

They capitalize on these fluctuations to determine their buy or sell position. Short-term opportunities are what Swing traders look for and exploit.

4. Scalping

To “take as many small gains as possible” is the the mindset of a scalper. And no, it’s not really a bad thing. They do this by trading based on small price changes that will rake them (small) earnings. It’s quantity over quality. It’s imperative to follow a strict exit strategy because one big loss will wipe out all their gains.

Whereas the long-term approach to value investing in stocks has these 6 prominent subtypes:

5. Buy and Hold

This is your strategy if you’re in it for the long term. Investors who use this strategy are not deeply concerned with short-term movements because they believe that even if the market went down in the short term, the longer time frame should net a positive value.

6. Long Pull Selection

An investing strategy that look out for fast-growing companies in the assumption that its earnings will grow higher compared to the market average. It can be risky since it rests on the potential of capital gains and not dividend income.

7. Bargain Purchases

Similar to the concept of bargain hunting if you’ll ask me. It makes use of various proven and tested investing strategies to look out for securities that are believed to be below their true value.

8. General Trading

Main strategy is to spot market trends and and participate in its general direction.

9. Selective Trading

Method on selecting stocks based on the perceived potential of better performance compared to others in a few months to a year.

10. Buy Low, Sell High

Exactly how it sounds like. Technique that uses stock market expectations and sentiments as indicators to exploit to determine if you should buy or sell.

Investing in the stock market may be risky, but can also be incredibly rewarding. To me, I see it as another way of growing our money faster. And that is enough of a reason to try it out.

The earlier we figure it out, the earlier we can get better value for our money. As Benjamin Franklin once said, “An investment in knowledge pays the best interest.”


Stock Investing FAQs

Here are some frequently asked questions (FAQs) related to investing in stocks in the Philippines:

What is the minimum amount required to start investing in stocks?

The minimum amount required to start investing can vary by brokerage. Some online platforms allow you to start trading with as little as PHP 5,000. It’s best to check with specific brokerages to understand their account minimums.

For instance, GStocks doesn’t have a minimum required deposit amount to open a trading account.

Are there risks involved in stock trading?

Yes, investing in stocks involves risks, including market risk, liquidity risk, and volatility. The value of stocks can fluctuate significantly, which means you can gain or lose money. It’s important to research thoroughly or consult a financial advisor to align your investments with your risk tolerance and financial goals.

What are blue-chip stocks? Should I invest in them?

Blue-chip stocks are shares of well-established companies with a history of sound financial performance and steady growth. These stocks are generally considered to be safer investments compared to other stocks. Investing in blue-chip stocks can be a good strategy for long-term growth, especially for beginners.

Can I invest in international stocks from the Philippines?

Yes, several Philippine brokerages offer options to invest in international markets (ie: eToro, BDO feeder funds, and GoTrade).

Alternatively, investors can open accounts with international brokers that accept Filipino clients. It’s important to understand the regulations and tax implications involved in investing abroad.

What are dividends, and how do they work?

Dividends are portions of a company’s earnings distributed to shareholders as a reward for their investment. Companies can issue dividends regularly (e.g., quarterly or annually). As an investor, you can receive dividends as cash payments or as additional shares of stock.

How are stock earnings taxed in the Philippines?

In the Philippines, capital gains from the sale of shares not traded on the stock exchange are taxed at 15%, while gains from shares traded on the PSE are not subject to capital gains tax but are instead subject to the stock transaction tax at 0.6% of the gross trade amount.

Dividends received by local individual shareholders are subject to a final tax, which can vary based on whether the dividends are from a domestic or foreign corporation.

What is a stock index, and why is it important?

A stock index is a measurement of a section of the stock market. It is computed from the prices of selected stocks, typically a weighted average.

It’s used by investors and financial managers to describe the market and to compare the return on specific investments.

In the Philippines, the Philippine Stock Exchange Index (PSEi) is the most important index, comprising the top 30 companies in terms of market capitalization and liquidity.


What’s Next? Other things to learn:

Below are other useful resources and tools you can use to further grow your knowledge in stock trading/investing:

Charting & Stock Chart Patterns:

Stop Loss & Limit Orders:

List of Philippine Stocks:

Other Useful Guides:

Disclaimer: All information listed in this article is for information purposes only. Although utmost effort was made to ensure accuracy of information on this website, readers must not solely rely on it in making any investment or financial decision since it does not take into consideration the risk tolerance, financial situation, investment goals, and experience of readers. It is best to consult a professional financial planner or your bank before investing to make a more informed choice and limit your risk exposure.

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About Amiel Pineda

Amiel Pineda is the Head of Content at Grit PH.

He started freelance writing in 2010 doing product reviews and tech news. In 2018, he became a full-time freelancer, writing in the financial space and creating content for clients in various niches.

Prior to freelancing full-time, he worked 7 years in the financial services industry for a Fortune 500 company.

He also writes on his personal blog, Homebased Pinoy (https://homebasedpinoy.com/), where he shares tips and guides as a work-from-home freelancer, along with NFT-game guides.

Education: Technological Institute of the Philippines (Bachelor of Science in Electrical Engineering)
Focus: Freelancing, Entrepreneurship, Financial Products, Investing & Personal Finance

Reader Interactions

Comments

  1. Francis JOHNS says

    I am a British citizen with Philippines Permanent Residence. I have A and B Shares in Royal Dutch Shell ( the head one and not the Philippines one). How do I sell my shares in the Philippines.
    Thanks

  2. France Edolmo says

    Hi I am France Edolmo

    Iam a licensed Finance Planner, I’m in the business of Investment and Insurance consultation since 2016 and already help a lot Filipinos take their first step to their financial goals without sacrificing their Family/Life/Relationship goals. One thing I’m proud about is helping this client of mine retire at age 55 and lived until 75 having a passive income of 1.5M annually without him having to work, with the help of different investment and insurance vehicles. Now if this is something you would like to hear or see;
    You can reach me thru the following contact details:
    09971776945 – Globe
    09301525768 – Smart
    e-mail: france.edolmo@fwdlife.com.ph

    Inflation runs in average of 5% annually while bank interest is .5% to 1% only, imagine how much money you are losing every year.

  3. Ivan says

    This is definitely helpful. More and more people have taken an interest in stock investing so it is important to understand it so you can be sure before you invest anything.

  4. Ivan says

    Ask yourself what outcome you would like and do your research so you have a clearer picture of how to achieve that outcome- is it retirement? Make sure to do the math on what this will cost and also what you can afford. But seek professional help if needed.

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