If you’re an OFW in the USA, You CAN’T Invest in Mutual Funds in the Philippines

For the longest time, even before coming to the USA, I wanted to invest in Mutual Funds. I know that it is a better financial product than most banks’ savings accounts. We have spent more than 2 years in the USA and felt confident that it is time we spent some money to invest long-term. We had some amounts saved up.

I did my research, I read blogs, and checked some of the Filipino Financial groups on Facebook, and talked with my wife about it. My wife used to be a production staff of ABS-CBN News Channel’s “On The Money.”

I had a trip to Manila in October 2017 and we agreed that I will open a mutual fund investment account. I set my eyes on the Philippine Equity Fund. It was marketed as an aggressive, long-term investment fund. We did not want to withdraw the funds in the next few years anyway, so we thought we were in it for the long term.

So I checked out the requirements for opening a mutual funds account; downloaded the forms, checked what other documents I needed to present, and planned to go to a BPI branch to submit my application.

If you want to check the requirements for opening an account, go to http://bpiassetmanagement.com or download directly the PDF of the application form: https://www.bpiassetmanagement.com/upload/files/Downloadable%20Application%20Form__UITF_082216.pdf

When I went to the BPI Branch where I keep my account, I talked with a bank officer and she lodged my application. Surprisingly, she asked me to fill out another application form from ALFM, which is the subsidiary managing this account,.

I also needed to fill out the FATCA form, which determines whether you are a US person or not. FATCA stands for Foreign Account Tax Compliance Act (FATCA). This form asks if you are:

  1. A US Citizen
  2. A Green Card Holder
  3. Considered as a US resident for tax purposes
  4. Born in the US or a US territory

Essentially, if you are working in the USA and have stayed there for 183 days or more in the past 3 years, then you are considered a US person.

After filling out several pages of forms from BPI and ALFM, I discovered that as a US person, I am not allowed to invest in mutual funds in the Philippines!

It sucks.

But I understand that the United States has become more stringent in monitoring the movement of money of its citizens and permanent residents. So that meant that our plan to invest in a mutual fund did not materialize.

Oh well. It seems we need to look for other investment instruments and opportunities.

2 Comments If you’re an OFW in the USA, You CAN’T Invest in Mutual Funds in the Philippines

  1. J

    Hi! I am a Mutual Fund Representative here in the Philippines. I just wonder what specific things made you ineligible to get an MF here in the Philippines… Can you please kindly enumerate the kinds of questions in the forms you filled-out that brought you to the conclusion that you cannot invest here in the Philippines?

    I am quite concerned about this post of yours because I do have US-OFW clients who were able to invest in Mutual Funds just recently. One of them actually linked this blog of yours to me. I hope you can bring light to this. Maybe, I can even help you if there’s any chance. Or, should the US government had some changes made that I don’t know of, at least I would be informed thoroughly.

    Thanks! God bless!

    Reply
    1. Mighty

      Hey Joseph, sorry took me a while to answer your comment. I don’t really know what caused them to decide that I cannot invest in mutual funds in the Philippines. My suspicion is the Foreign Account Tax Compliance Act (FATCA) rule of the US government and those that it has agreement with. When I filled out the form, it was clear that I am a “US person,” and that is probably why I could not invest in mutual funds. On a related note, I sent an email to a Philippine financial company (it might have been Sunlife) asking about investing in their mutual funds as a US person. I was told that I cannot do it. I would suggest that you talk with the mutual fund companies and check about this matter. Even with the mutual fund option of COLFinancial, I was not able to sign up because I am considered a “US person.”

      Reply

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