Filipinos warned on investment scams

DAVAO CITY (MindaNews / 17 Feb) – Filipinos have been warned again to be cautious about handing their money to companies who present themselves as authorized sellers of investment products with the proliferation of Ponzi investment scheme in the country.

During Tuesday’s press conference at the Seda Abreeza Hotel, Sun Life Asset Management Company, Inc. (SLAMCI) president Valerie Pama said that there have been various investors fooled by high investment returns of Ponzi scheme.

“If the investment returns are too good to be true, then it could be a scam,” she said.

According to the Securities and Exchange Commission (SEC), among the features of the Ponzi investment scheme include no SEC registration, offers or guarantees a huge profit in period, utilizes a binary network to earn commissions, no paper trail, promises, little or no financial risk, and provisions for a lock-up period where an investor cannot touch the investment.

“It also assures pay-off of investments in a short time, uses high pressure methods to convince investors to reinvest their earnings, unknown principal share office, address, founders, directors or officers, and orientation seminars are conducted informally,” it added.

Pama added that it also pays for investors to study the track record of the company in the industry.

She admitted that some of those investors who fell victim to scams have become cautious even with the legitimate institutions that are offering investment products that are registered with SEC.

She said investments are even being sold on Facebook, and some have invested without doing a research if the one selling has already flown out of the country.

SEC-Davao extension office head Javey Paul D. Francisco added that investment companies would be required to have a minimum paid-up capital of P50 million plus their products must have a clearance while the individual salesmen must secure a license.

He revealed that five more companies with similar investment scheme as the Jacama Sales and Marketing that was closed down last month by Davao City’s Business Bureau for violation of the Local Revenue Code of 2005 are operating here.

“We received raw information but we have to validate. If the information is accurate, we have to get testimony… whether from us, or from the public that this is how they operate,” he said

The Jacama was reportedly offering a cash back guarantee sales program to investors as the main product, although its permit with the city only granted them to operate as a retailer of general merchandise.

Francisco added that the company had drawn 15,000 to 20,000 investors before it was stopped by the city.

The firm’s business registration was also with the Department of Trade and Industry (DTI) since it was a single proprietorship.

“Education is always the best tool so you cannot be susceptible to scams,” Pama said.

She encouraged investors to invest in mutual funds, wherein funds from different investors are pooled together and then invested in the stock market by a fund manager.

The SLAMCI, for instance, offers mutual funds such as money market funds, bond funds, balanced funds, and stock funds/equity funds that investors can choose from.

The money market funds invest purely in short-term (one year or less) debt instruments; bond funds invest in long-term debt instruments of governments or corporations; balanced funds invest both in shares of stock and debt instruments; and stock funds/equity funds invest primarily in shares of stock.

The firm recently launched the Sun Life Prosperity Card, the first-of-its-kind in the market that can be given as gift worth P5,000, which “may be invested in any of the peso-denominated mutual funds managed by SLAMCI under its Sun Life Prosperity Funds.”

She said that there are risks in investing in mutual funds but are taken out if investors would go for long-term investments.

“Investments in mutual funds are not guaranteed. Banks are guaranteed but not enough to beat inflation. That’s why, we are encouraging the public to invest and demystify it. That’s the only way you can beat inflation,” she said.

Maria Charina M. Fuentes, head of Strategic Development and Trainings of SLAMCI, said that saving in the bank would not beat inflation.

“Money is losing its value when you save in banks,” she said.

Depending on the growth of the economy, when investors invest in the mutual funds, “it appreciates or grows over time”.

Of the 48 branches nationwide, two are in Davao City, one in Cagayan de Oro City, and one in General Santos City.

Maria Goretti Jimenez, head for agency sales for Mutual Funds, said that SLAMCI registered last year P50 billion assets under management, 2 percent of which is Mindanao’s contribution.