Philippine Mutual Funds Performance 2008-2019

Abstract

This paper examined the effects of macroeconomic variables as interest rate, inflation rate, and exchange rate on the performance of mutual funds in the Philippines from 2008 to 2019.

OLS and polynomial regression were initially tested for goodness of fit. The result showed that OLS regression was better suited for the analysis as it has a lower standard deviation.

Macroeconomic variables. The Philippines economic forecasts 2008-2019 outlook provided a declining trend from 5.20% 2008 to 4.3% in 2019. The downtrend in inflation provided an upturn of the mutual funds as seen in the inverse relation of the mutual funds (-coefficients), that is, an upturn of inflation rate reflects a corresponding downturn in mutual fund values.

Likewise, interest rates are expected to rise from 3.5% in 2008 to 4.0% in 2020. The results showed that an increase in interest rate will cause to increase the return of investors.

The dollar denominated funds as expected were vulnerable to inflation rate.

For the period 2008-2019, the Philippine mutual funds remained resilient and yielded expected results. The effects of macroeconomic variables as interest rate, inflation rate and exchange rates were not significant.