FX trading gets Internet support

How can the foreign exchange currency trading in the Philippines benefit with the advent of the Internet and how can the flood of Internet finance scams be avoided or stopped?

The newly established Performance Foreign Exchange Corp. (PFEC), describing itself as the "largest Internet currency information services provider in the Philippines," offers Internet support for foreign exchange (FX) trading, 24-hour service and financial data.

At present, foreign exchange transactions in the Philippines total $100 million daily, while the world’s total daily turnover is $1.2 trillion.

The FX trading market is the biggest financial market in the world, according to PFEC, and it is 17 times bigger than the giant New York Stock Exchange.

International Data Corp. (IDC) and Computer Industry Almanac (CIA) predict that by 2005, there will be more than 600 million people using the Internet worldwide. PFEC offers people access to round-the-clock foreign currency movements, expert market analysis and the Internet platform with which to trade FX in "real-time."

PFEC recently inaugurated its new offices at the Enterprise Center in Makati, with Monetary Board member Melito Salazar Jr. calling for more companies to follow its example in promoting more economic activities.

On the entry of PFEC led by Singaporean Michael Liew, Salazar said, "The setting up of this company is a clear manifestation of the trust and confidence in the Philippine economy. If foreigners show faith and trust in us, then I think it is important that we Filipinos should have trust and confidence in ourselves."

Salazar congratulated PFEC for giving investors "the opportunity and the right information" to be able to engage in FX trading without exerting pressure on the Philippine monetary system.

He added, "As a member of the Monetary Board, I am happy with this kind of operation. It’s because if we want to look into how the euro and the dollar are going, then what we might choose to do is go to the bank and buy dollars. This, of course, puts pressure on the system."

How will PFEC use Internet technology to improve FX trading, encourage higher volumes of transactions and protect the welfare of small investors from any unscrupulous operators? How do local investors avoid the dangers of numerous Internet financial scams, pyramiding and other similar sophisticated business frauds?

PFEC financial consultant Jonathan Ocampo warned that Internet firms or financial companies "offering returns on investments which sound too good to be true – such as interest or profit of five percent or more monthly – the potential investor should exercise caution and cross-check with verifiable data in order to realistically assess the offer. The billions of pesos lost by well-intentioned investors in scams and non-viable business ventures can be avoided by studying the market carefully."