MANILA, Philippines - The Philippine Stock Exchange index (PSEi) can rise to 18,000 by 2025 based on its growth in the past 10 years, leading online stockbroker firm COL Financial said.

“The PSEi increased more than threefold to 6,952 from 2,096 from 2005 to 2015. That was a compounded annual growth rate (CAGR) of 12.7 percent for that 10-year period. Even assuming a more conservative 10 percent CAGR, it is not hard to believe that the stock market can move to 18,000 by 2025,” said Marvin Fausto, a fund expert at COL.

Fausto advised investors to stay invested in stocks over the long term.

“Stocks have been proven to outperform all other asset classes in terms of returns and this time is no different. Leaving your money in a bank as most Filipinos do only results in inflation reducing the value of your savings with bank interest rates so low,” he said.

Supporting this growth potential of the stock market is the country’s growth story, Fausto said.

“Looking at the bigger picture for the next 10 years, the Philippine growth story is expected to be even stronger compared to the past decade. For instance, the country’s nominal gross domestic product (GDP) in 2005 was P5.7 trillion. Last year, nominal GDP more than doubled to P13.3 trillion.

If the economy moves at the same pace, nominal GDP can again double to P26 trillion by 2025,” Fausto said.

He also advised investors to manage risks by diversifying investments in different asset classes like bonds, stocks and mutual funds to reduce overall risk.

“In COL Fund Source, one can access the 26 major mutual funds of the six largest fund houses – ATR Asset Management, BPI Investment Management Inc., First Metro Asset Management Inc., Philam Asset Management Inc., Philequity Management Inc. and Sunlife Asset Management Inc.,” Fausto said.