Investment Banking in Philippines

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Investment Banking In Philippines Overview

Investment banking in Philippines is one of the most significant parts of the financial industry that helps entities raise funds, and also engage in fruitful merger and acquisition (M&A) deals. In the Philippines, the banking sector is pretty wide, and many banking and non-banking institutions offer a whole gamut of services.

The Philippine Stock Exchange has witnessed a surge in the listings and the credit for making this happen goes majorly to the investment banking services that the entities offer. The investment banks in the region help firms raise capital through various public offerings, including initial public offerings (IPOs).

Investment Banking In Philippines Overview

Investment Banking in Philippines Explained

Investment banking in Philippines has been a crucial part of the financial interface of the region. From helping firms to raise funds for growth and expansion of their businesses to guiding companies choose better deals involving mergers and acquisitions. Investment banks not only serve to be a facilitator of financial transactions but also act as a guide and mentor for several investors. The diverse role that it plays makes it one of the most wanted sectors of any nation.

This sector ensures maintaining sustainability and managing risks by having flexible measures designed per individual requirements of the clients. It takes into account the changing trends and regulations, watching out currency fluctuations, and monitoring global policies and adopting lawful conduct every time it serves the client’s requirements. These are the elements that make them the most ethical and reliable source of financial guidance.

There are 36 commercial banks, 492 rural banks, 57 thrift banks, 40 credit unions, and around 6000 plus non-banking institutions. To control and direct these banks, the Bangko Sentral ng Philipinas was established. In July 1993, this central authority was founded. It was created as per the Philippine Constitution, 1987, and the New Central Bank Act, 1993. The Bangko Sentral ng Pilipinas was established to regulate all the banks and also help these banks inform the right policies.

As per Moody’s analytics, the Philippines’ banking sector is looking quite positive. The most important factor for which Moody’s analytics has been very positive about the banking sector of the Philippines is the way the central bank of the Philippines has curbed the effect of inflation over the years. Investment banking industry is expected to generate a revenue worth $1.31 billion in 2024 with an annual growth rate of 1.76%, amounting to a total of $1.22 billion by 2028.

Services

Investment banking in the Philippines offers a range of services to their eminent customers.

Let’s look at the most significant services these investment banks provide –

M&A Advisory

A merger or acquisition is an opportunity to expand its horizon for a company that looks to grow. Investment banking in the Philippines offers that room and assistance for any corporation to expand through public takeovers, cross-border deals, or joint ventures at an international level.

Debts & Equity Capital Markets Financing

Investors don’t always know which trends can help them make more money or prevent them from making more profits. Investment banks in the Philippines understand the intricacies of the debt and capital markets. So they help their clients spot the trends, help them understand the nitty-gritty of the global market, and let them make smart moves around their investments.

Bespoke Financing

Through bespoke financing, the investment banks in the Philippines help their clients understand the need for the right financing. For example, the company may look for structured financing, leveraged, or specialized financing.

Investment Research

This is another most important service offered by investment banks in the Philippines. In doing the research for their clients’ investment banks in the Philippines use quantitative analysis, statistical modeling, and data science.

Top Investment Banks

Here is the list of top investment banks in the Philippines –

ABCapitalOnline.com, Inc.
Asian Alliance Investment Corporation
Asian Focus Group Inc.
BPI Capital Corporation
Eastgate Capital Partners, Inc.
First Abacus Financial Holdings Corporation
First Metro Investment Corporation
FSG Capital Inc.
Insular Investment & Trust Corporation
Investment & Capital Corporation of the Philippines
Mabuhay Capital Corporation, Inc.
Medco Holdings, Incorporated
Navarro Amper & Co
PNB Capital and Investment Corporation
Punongbayan & Araullo
SB Capital Investment Corporation
Unioil Resources & Holdings Company, Inc

Recruitment Process

The investment banking career is quite lucrative for any finance professional. However, unlike the other investment banks in various countries, alot of emphasis is given to work-life balance. Therefore, the best way to approach an investment banking career in the Philippines is to go for an internship with the top investment banks there and then learn the way up to becoming an associate.

A few things that one needs to look for while applying for an investment banking career are –

How the investment banking firm approaches experience and how much professional growth one may get while pursuing their career in that particular investment bank.
Whether there is any paid training offered or not.
The investment bank provides any life insurance, health benefits, and retirement plan.
Whether there is an option for paternity or maternity leaves available if required soon.

The most important thing to consider is how well one connects the career growth with their family goals. Since in the Philippines, one of the most important aspects is family, having a good work-life balance is what every professional desires.

Culture

In an investment banking career, culture plays a big role. That’s why in the Philippines, the investment banking career is approached completely differently. Since most of the banks in the Philippines are foreign banks, in investment banks, one would see a mix and match of a foreign culture. The work ethic is very strong, and investment banking professionals work hard, around 80 hours to 100 hours.

Investment banking professionals also value heritage and tradition. That’s why balancing both work and spending time with family is considered most important.

Salaries

The Philippines is famous for getting cheap labor. However, the most unfortunate thing about an investment banking career in the Philippines is that the compensation of an investment banking professional is way too low.

The median compensation in an investment banking firm is PHP 353,749. While the investment banking professionals are raking in millions in the US and Europe, the investment banking professionals in the Philippines earn around USD 6000 in a year for under ten years of experience.

If one works their way up and can become a partner in a top-notch investment bank, they may earn a lot more, though.

Here’s a chart created by PayScale that might be helpful –

source: payscale.com

Exit Opportunities

An investment banking career is normally seen lucrative to people for ten years or less. After that period, most of them begin searching for another options. The possible options that a finance professional can choose when exiting the investment banking sector include corporate finance career, careers in commercial banking, or starting one’s own business.

Since banking in the Philippines is huge and well-controlled, commercial banking is always a viable exit route. Besides that, one may choose to enter the private equity market, hedge fund and asset management niches, venture capital career, startups/entrepreneurships. The only difference that exists between investment banking and these other industries is that the former is about advising and guiding others, while most of the rest options come with the implementation part and doing it on their own.