In 1997 several milestone events happened.
If you’re a British royalty fan, you must have grieved the death of Princess Diana. In a few days Mother Teresa, then known as the living saint, also died. If you’re a sports buff, you would remember that Tiger Woods broke records to be the youngest golfer to win the 1997 Masters at the age of 21. It was also the year when Mike Tyson bit off the ear of Evander Holyfield in The Bite Fight. J.K. Rowling’s super bestseller Harry Potter was published. For the movie buffs, it was the year Titanic was shown in cinemas.
While Microsoft was proclaimed the most valuable company, Steve Jobs returned to run Apple after being ousted a few years earlier.
Back home, the Philippines was under President Ramos and we were doing quite well. We were touted as one of the rising tiger economies. Back in our own home (as in the Fres-Fausto home), I was nursing our youngest baby Anton.
Four months after Anton was born, my husband Marvin was having another baby born on April 22, 1997. Okay, before you think that there was philandering going on, I’m referring to his “other baby,” the Fund Managers Association of the Philippines or FMAP.
They say affairs can happen with a simple coffee or lunch. It’s the same way with this 20-year old organization. What started as an informal group among a few fund managers back in the ‘90s, the era of Spice Girls and Backstreet Boys, getting together to share best practices and camaraderie, transformed into a formal organization with the objective to unite the players in the industry into a coherent voice acting in the best interest of the investing public. Incidentally, April is the Financial Literacy month.
If you talk to the founding president, Marvin, about FMAP, he sounds pretty much like a father talking about his own child. It has its ups and downs, but given his personality, he focuses more on the ups.
When FMAP was established on April 22, 1997, the Philippine Stock Exchange Composite Index (which was then called Phisix, a nickname I prefer to this day) was at 2,860.50. Then came the Asian financial crisis in July of the same year. It started in Thailand with the collapse of the Thai baht then spread to the rest of the region including the Philippines.
The Phisix went all the way down to 1,518 in eight months, a 47% drop since the inception of FMAP. When asked what sort of conversations were going on among his fellow fund managers at that time, Marvin said, “Well, we just tried to do our best given the situation, but I do remember holding our meetings in cheaper places. We were paying for our own meals and there’s a certain alarm that you tighten your belt when you see the market falling.” To those who remember the half-day trading sessions, market players’ lunches were pretty much affected by how the market closed at 12:00 noon back then.
The organization survived despite the lackluster performance of the market. It was a bear market from 1997 to 2002. To those who were not yet investing then, the index went down to three digits in 2001, the year we ousted another president by gathering once more in EDSA. The bull run that ensued starting 2002 encountered a huge and scary hiccup that rocked the global financial market during the 2008 crisis, which was primarily due to the sub-prime lending fiasco.
On the fixed income front, FMAP experienced double digit returns all the way down to single digit historic lows.
FMAP has indeed come a long way. It has experienced a few economic cycles during its two decades of existence. From a rising tiger economy to the sick man of Asia to the investment darling earning its first ever investment grade rating in 2013.
Unlike other organizations that are beset with cashflow constraints, FMAP’s healthy financials allows it to actively carry out its mandate to help in the development of the country’s capital markets for the benefit of the investing public, invest in the education of its members, and even contribute to charitable endeavors.
FMAP played a key role in finally having the PERA law up and running. (Personal Equity Retirement Act, a contributory and voluntary fund where participants can get tax-free returns from their investments).
It was also at the forefront of the legislation of the Revised Investment Code Act (RICA), an update of the Investment Code Act of 1960 and harmonizing the rules governing mutual funds and UITFs (Unit Investment Trust Funds). It has also helped in pursuing the Credit Information System Act that aims to establish a central credit information bureau and make funds available to small borrowers.
FMAP took part in the initiative to form the Financial and Capital Markets Advisory Council (FCMAC), sat at the Capital Markets Development Council, collaborated with the PSE to make Philippine equities more attractive to both local and foreign investors, and worked with Congress on the Collective Investment Scheme.
This 20-year old organization continues to work hand in hand with regulatory agencies such as the Bangko Sentral ng Pilipinas (BSP), Philippine Stock Exchange (PSE), Securities and Exchange Commission (SEC), Insurance Commission (IC), etc. to help further professionalize the fund management industry.
FMAP also has its Annual Equities and Fixed Income polls. This is their version of Oscars where they give awards for Best Equities and Fixed Income Houses, Best Traders, Salespersons, Economists, Analysts, etc. It adds excitement to this already competitive industry.
Moreover, FMAP continues to educate its members through their regular forums where they invite speakers from the government and academe and experts from various fields who share their experiences, challenges, and insights.
I’m glad that our fund managers know how to manage even their non-stock non-profit funds, allowing them to give back to society. FMAP has sent to school deserving scholars, 13 already graduated from the UP School of Economics with honors, two of whom as magna cum laude. It has likewise donated to the Gawad Kalinga.
All these activities have been carried out under the able leadership of 11 fund managers in a span of two decades namely Marvin Fausto, Wilfred Song Keng Po, Jo Ann Eala, Allan Yu, Fritz Ocampo, PJ Garcia, Tere Marcial Javier, Mike Ferrer, Sandra Deveras, Joy Tuplano, and Deanno Basas.
From an initial membership of nine institutions represented by 18 individuals managing PhP1 billion in 1997, FMAP has grown significantly to 48 institutions represented by 298 individual members managing PhP4.5 trillion in funds!
What makes FMAP tick? Next 20 years?
Asked what makes FMAP tick, Marvin said, “It’s the fun factor! Fund management is a serious job but we should never forget to have fun.” Well, I should know. I’ve lived with him for over 27 years. When the going gets tough, he stops to re-calibrate, not forgetting that it’s more sustainable if we’re more chill and happy with what we’re doing. I’ve also had the privilege of knowing most of the FMAP members. Believe me, no matter how serious (and sometimes boring, oops…sorry ) they may sound, these guys are hilarious and know how to have fun!
I asked Marvin how he sees FMAP 20 years from now, and after a pause he said, “Well, I’ll be pretty old by that time, but I see FMAP getting even stronger and more relevant, especially now as the group is taking further steps to articulate and enhance its brand, its reason for being. I see it as a premiere organization in the region fostering professionalism and camaraderie, maybe a model org that other groups can pattern themselves after.” “Will you still be actively involved?” was my follow-up question, to which he replied, “Maybe I will just be observing on the sidelines, giving my advice if they still want it.” Listening to him, I imagined a content happy old man proud of his legacy in this world, just like a father smiling with pride because his baby has turned out to be his great contribution to this world!
- Join me tomorrow as I interview the founding president of the Fund Managers Association of the Philippines (FMAP)
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Rose Fres Fausto is a speaker and author of bestselling books Raising Pinoy Boys and The Retelling of The Richest Man in Babylon (English and Filipino versions). Click this link to read samples – Books of FQ Mom Rose Fres Fausto. She is a Behavioral Economist, Certified Gallup Strengths Coach and the grand prize winner of the first Sinag Financial Literacy Digital Journalism Awards. Follow her on Facebook and You Tube as FQ Mom, and Twitter & Instagram as theFQMom.
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