A Damaged Culture No More? Investing in the Philippines

The Philippines has the dubious distinction of being called “a damaged culture” or “the sick man of Asia,” but the country is also considered to to be one of the so-called Tiger Cub Economies of Southeast Asia and one of the Next Eleven (N-11) countries. Unfortunately, American investors have few options for investing in the Philippines as the iShares MSCI Philippines Investable Market Index Fund (EPHE) and the Philippine Long Distance Telephone Company (PHI) or PLDT are the only Philippine ETFs or ADRs trading on major US stock changes as other well-known Philippine companies like Ayala Corp (AYALY.PK), Globe Telecom (GTMEF.PK), Jollibee Foods Corp (JBFCF.PK), San Miguel Corp (SMGBY.PK) and SM Investments Corp (SVTMY.PK) are only thinly traded on the OTC.

Manila Bay, The Philippines
Before investing in the Philippines, investors should read James Fallows’ Atlantic Monthly essay: “A Damaged Culture: A New Philippines?”

Nevertheless, the election of Benigno “Noynoy” Aquino III, the son of former President Cory Aquino who replaced dictator Ferdinand Marcos, has fueled optimism that the Philippines has finally turned a corner. But before you consider investing in the Philippines through Philippine ETFs or stocks like the iShares MSCI Philippines Investable Market Index Fund or the Philippine Long Distance Telephone Company, investors might want to consider reading a controversial essay written by James Fallows for the Atlantic Monthly entitled: “A Damaged Culture: A New Philippines?”

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Speculators And Hit-And-Runs: Investing in Indonesia

Indonesia is the world’s fourth most populous country, has the world’s largest Muslim population and is considered a good candidate to be added to the so-called list of BRIC countries; but when it comes to investing in Indonesia, American investors would be limited to telco stocks PT Indosat Tbk (IIT) and PT Telekomunikasi Indonesia (TLK) as both trade as ADRs on the NYSE; Indonesia ETFs like the iSHARES MSCI Indonesia Investable Market Index Fund (EIDO), the Market Vectors Indonesia Index ETF (IDX) and the Market Vectors Indonesia Small-Cap ETF (IDXJ); and closed-end fund Aberdeen Indonesia Fund Inc (IF).

Borobodur, Java, Indonesia
Investing in Indonesia, like traveling there, is not without risk.

While that might be a larger than normal selection for American investors compared with other emerging markets, its still fairly limited given Indonesia’s potential economic importance. However, is investing in Indonesia even worth considering and if so, what should you invest in?

Before we look at the options for investing in Indonesia, let me tell you about my recent three week trip to the Indonesian island of Sumatra and the Indonesian city of Medan – which probably has one of the fastest growing economies in the country.

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