Banco Filipino

The Monetary Board decided yesterday (March 17, 2011) to place Banco Filipino under the receivership of the Philippine Deposit Insurance Corporation (PDIC). This ends days of depositor uncertainty. Now the waiting begins. Depositors with balances of P5000 and below will be mailed postal money orders. Those with larger deposits need to file claims forms.
Unfortunately I have some money deposited with Banco Filipino. I was attracted to the higher interest rates and was quite aware of the risks, especially in light of the Legacy debacle. What's more I was already aware a few months ago of trouble brewing between the bank and the BSP. There were some news reports about their war of words, but I chose to ignore them. There are lessons to be learned here, I'll let you decide what they are.
Media Release on the BSP Website
Edit: Here's a page on the PDIC site where you can download a claim form: PDIC: How to file claims
Scroll to the bottom of the page for the form download link.

Risk Tolerance

Before investing in a mutual fund the prospective investor should first identify how much risk he or she can tolerate. This will help the investors choose a fund they will be comfortable with. A popular way to find out risk tolerance is to answer a series of questions. Mutual fund companies ask potential investors to complete a short questionnaire. Risk tolerance is identified according to the answers given. Similar questionnaires are also available on the Internet. The questions are about what kind of returns an investor wants or expects, the investment time frame, what losses the investor can tolerate, among others.

In my experience I've found that the results of these tests are only a good first approximation. There are other factors that affect investors attitude towards risk aside from investment philosophy. Changing personal and financial circumstances, increasing financial experience and knowledge, and age are all contributing factors. When I started investing in mutual funds this year I chose to invest in equity funds. I assessed myself to have high tolerance for risk. The recent stock market performance has tested that assessment. From the recent record highs the market index has dropped significantly, and bounced back again. It's an early and easy test, but it's made me reevaluate my risk tolerance.

Right now I'm sticking to equity funds but I'm also seriously considering moving to balanced funds. I don't want to act too hastily so I'll be in wait-and-see mode for now. Does this invalidate risk tolerance questionnaires? No, but it did teach me that you have to put a lot of thought into your answers to get a more accurate result, and that investor attitudes can change in a relatively short time frame.