TERM OF THE DAY
Standard of living Usually refers to a country’s per capita income, but some- times takes account also of additional conditions that matter for a person’s or household’s wellbeing, such as leisure or the quality of the environment.
Source: Bureau of Micro, Small and Medium Enterprise Development- Department of Trade and Industry
business The Manila Times
Stock market seen to trek south on overseas woes
BY KRISTA ANGELA M. MONTEALEGRE REPORTER
LOCAL share prices are expected to trek south as investors’ confidence remain shaky with foreign developments overshadowing the Philippines’ sound macroeconomic fundamentals. With developments overseas giving
credence to the negative bias in the market, last week’s slide may carry over this week unless something props up the market, analysts said. “We are also cognizant of external
influences, which at best are mixed, pulling local sentiments down,” said Jun Calaycay of Accord Capital Equities Corp. “While the index and numerous
stocks are near their respective support levels, there is definitely room to move further down,” said Prince Anthony Yeung of AB Capital Securities Inc. Week on week, the PSEi dropped
40 points or 0.98 percent buoyed by speculation China’s plan to increase its interest rate may affect global recovery. The Dow Jones industrial average
rose 40.26, or 0.4 percent, to 11,410.32 as exports rose to their highest level in two years and the US trade deficit
dropped to its lowest level in nine months in October. Analysts have not written off the
prospects of a Santa Claus rally to close out trades even though the final three weeks of December returned negative in three out of the last five years. At the bull’s final year in 2007, the
last three weeks punished investors with a 15.6-percent slump, said Calaycay. The main index
may find support at the 4,070 level and then at 3,950 if the former fails
to hold, said Yeung. While the outlook remains bullish for
the country, this has failed to translate to a sustained positive action in equities as reflected by the PSE index, Calaycay said. “Yet, if go we by theory, with the
market in the role of a leading indicator, we have reason to doubt what the fundamentals present,” he said. There are a good number of
companies whose stocks remain attractive considering their prospects next year with rallies seen as an opportunity to book profitable positions and retreats as an occasion to take positions heading into 2011, said Calaycay.
manila
times@gmail.com MONDAY
December 13, 2010
OFW households spending less on big-ticket items
BY LAILANY P. GOMEZ REPORTER O
VERSEAS Filipino worker (OFW) households have reduced their expenditures on big-ticket items
such as property and motor vehicles amid the peso’s strength, according to a survey by the Philippine central bank.
In the latest round of its Con- sumer Expectations Survey, the Bangko Sentral ng Pilipinas (BSP) said OFW households that used re- mittances to buy consumer durables fell to 28.9 percent in the fourth quarter from 31 percent in the pre- vious three-month period. Survey respondents who bought cars fell from 11.3 percent to 7.7 per- cent, quarter-on-quarter. The survey further showed that the percentage of OFW households that apportioned part of their remittances for amortization or full payment of home purchases also went down to 11.3 percent from 15.5 percent. OFW households that allocated part of their remittances to invest-
ments likewise dipped to 5.8 per- cent from 7 percent in the previous quarter, while those that set aside money for savings stabilized at 43 percent over the past two quarters, from only 7.2 percent in the first quarter of 2007.
Of the 534 households with
OFWs, 96.7 percent said they spent part of their remittances on food and other household needs. About 72.6 percent of respondents said they allocated their remittances for education, while 61.1 percent said they used the money for health care. Nearly half said they used the re- mittances for debt payments. The survey was conducted on Oc- tober 1 to 15 this year, when the
Customs to expand coverage of amnesty program
BY KATRINA MENNEN A. VALDEZ REPORTER
THE Bureau of Customs (BOC) will expand an amnesty program to cover owners of all types of under- valued goods.
Customs Commissioner Angelito
Alavarez told reporters that the Volun- tary Disclosure Program (VDP) would no longer be limited to owners of un- dervalued cars as the agency would expand its coverage to include just about all other goods so long as these are not illegal and prohibited articles. “We revised our proposed VDP before the finance department. We
want to expand the coverage of such program and not only be limited to owners of undervalued cars,” he said. He said the program would run during the first quarter of next year. The VDP is the BOC’s counterpart to the Bureau of Internal Revenue’s abatement scheme.
Under the proposed VDP, sur- charges and penalties can be dis- pensed with, Alvarez said, adding that, “I proposed that they [those who would avail of the program] may only pay for the basic tax due to government.” Under the Tariffs and Customs Code, delinquent traders, import-
ers and taxpayers are liable to pay surcharges of 25 percent to 50 per- cent, a 12 percent interest per an- num, and penalty that could go as high as eight times the original value of the imported good, at the discretion of the bureau. Alvarez said the BOC is eyeing to raise at least P2 billion from the program. At end-November, the bureau in- curred a P30.16 billion deficit on its collection target for the period after it raised only P231.7 billion. The BOC is tasked to collect P280 billion for this year, an amount that Alvarez conceded would no longer be
met given the zero-duty treatment of three imported commodities, namely petroleum, semi-conductor and elec- tronics, and Japan-made vehicles. He said the VDP is not mainly for
revenue generation but for giving the erring taxpayers the “rare oppor- tunity” to come forward and be spared from criminal prosecution. “As much as possible we don’t want to flood our courts with cases that can be settled extra judicially. Hence, those who are guilty of undervalua- tion or technical smuggling should grab this chance. Otherwise, they face the very high risk of being criminally and civilly charged,” Alvarez said.
The year of living dangerously in the euro zone area
BRUSSELS: It was Europe’s ‘annus horribilus’ with game-changing bailouts for Greece and Ireland, more emergency financial rescues seem- ingly guaranteed and tens of millions of citizens expressing rage when the boom times went belly up. Even humble journalists working through the night of Sunday May 9, 2010, when the 27 states that make up the European Union cooked up a trillion-dollar public-debt war-chest, knew they were covering events of lasting significance. Three days earlier, three people died at a bank in Athens that caught fire after rioters threw firebombs in anger at the price to be paid by ordinary Greek people for their government’s 110-billion-euro international bailout. As Greek President Carolos
Papoulias warned that his country stood on the “edge of the abyss,” the world watched and wondered: can this really be contained? Ireland’s bailout was scarcely less. And experts predict Portugal and Spain will need more. Commentators homed in on the fact that the worst- affected have been ‘young democra-
cies,’ for whom the memory of mili- tary dictatorships remain fresh. When euro finance ministers held just the first of many such emergency sessions that Sunday — outside trad- ing hours — it was clear the contagion couldn’t be controlled. Once it was Argentina, Indonesia or Mexico staring at bankruptcy. Now Europe faces radical reform if it is to properly anchor a 10-year-old cur- rency with a central bank but no cen- tral government, and compete with the new world’s developing giants. First though, with loans, come in- terest — and as the Scottish historian Niall Ferguson says in “A financial his- tory of the world” the terms can feel as rapacious as those offered by Glaswe- gian loan-sharks.
And so the bailout culture
spawned the age of austerity. From the Greek ‘austeros,’ mean- ing bitter or harsh, when wine or fruit makes the tongue dry, austerity was one of those words that entered the lexicon of everyday life. Millions have already been affected. French footballing icon Eric Cantona failed with a Facebook call
for people to withdraw their savings and bring down the banks. But 2010 austerity even extended to the animal kingdom when Andrex, an iconic toilet roll brand, decided to save money and employ a digitized dog rather than the puppies that set apart its advertising for the previous 38 years. French Finance Minister Christine
Lagarde, who spent much of her ca- reer as a lawyer in the United States, called the May 9 deal a “historic turning-point.” How we think about wealth, pov-
erty, taxation, politics and government changed irretrievably—and ordinary people did not hide their anger. The gates of the Irish parliament
were rammed by a cement-mixer truck with ‘Toxic Anglo Bank’ written on it on a Europe-wide day of pro- test at the end of September. The offer from non-euro London of a loan to help Ireland’s collapsed banking system revived centuries of mistrust over English motives. In Brussels that same day, as many
as 100,000 marched in protest. Once Winston Churchill mort- gaged the ‘Great’ in Britain and bank-
rupted the Treasury to defeat Hitler. But Germany now calls the finan- cial and political shots in Europe. And the rationing applied by Germa- ny’s Chancellor Angela Merkel, the euro paymaster, will similarly be felt for many years to come. The reason is simple: massive cuts to public services; capping and reduc- tion of salaries (while publicly bailed-out banks restore huge prof- its); bumper tax increases; cuts to social welfare; and pension fund raids either directly (in the case of Ireland) or indirectly (as in France, where President Nicolas Sarkozy ex- tended the retirement age). The effect on European politics is
clear, with far-right parties currently in government in Italy and sitting in the parliaments of Austria, Bulgaria, Denmark, Hungary, Latvia, Slovakia, Sweden and The Netherlands. “It’s the European version of the Tea
Party movement,” said Fabrice Pothier, director of the Carnegie Europe think tank, referring to the ultra-conservative faction in the United States. “A very re- actionary response to the crisis.” There will be more.
AFP 10,000-hour rule: Nothing is simple as it first appears
OW do you assess if the con sultant you’re dealing with has the solid expertise and reputation to help your organization? I’m asking this question because I’ve been hear- ing a lot of perplexing stories about people who’ve just secured their col- lege diplomas and now gainfully earning some money as “manage- ment consultants.” Obviously, they’re not part of the usual 5-month contractual jobs that you can find in organizations con- trolled by greedy owners whose known management strategy is lim- ited to the accordion hiring and fir- ing of people. I am generalizing here. But as you can imagine when I gen- eralize, I don’t care if you get hurt. Anyway, for the benefit of those who
H REYLITO A.H. ELBO
were born yesterday, I should explain that a “management consultant” is an expert on his chosen field. One typi- cal day, he appears to be a dignified person who comes up to you wearing the most expensive Armani™ suit at a cocktail party in Shangri-la Hotel to give you his calling card that includes an address in a Makati virtual office. I found the encounter immensely
entertaining, especially after about three glasses of red wine, because for one thing many of these “consultants” are actually graduates of La Salle and Ateneo who spoke with a comical ac- cent, which I suspect they practice dur- ing a basketball championship match. At least the wine helped me raise an intellectual question before a 26- year old something “consultant:” “What makes you think you’re quali- fied to do the job of a consultant?” Upon hearing that apparent abra-
sive question, the people at my ta- ble looked at me, and then leaned toward the guy in Armani™ grey suit. “I’ve a master’s degree from Waseda
University,” said the young man. “Wow! That’s a big deal. Do you speak Japanese?” I asked.
“Sukoshi dake” (a little), he replied. As it happened, I was standing next to Millet, a human resource manager from a major Japanese corporation. I asked her if she would consider hir- ing Mr. Armani as a consultant. “It depends,” Millet replied as if she
was a lawyer defending an accused person before a court of justice. Without allowing Millet to con-
tinue, I ventured to say: “I thought a consultant must have at least 20 years of corporate experience. If not, a consultant must have spent an enormous time, at least by spend- ing a minimum of 10,000 hours honing his management skills.” It turns out that Millet knows what I’m talking about. “You must have read Malcolm Gladwell’s Outliers which basic theme is the 10,000-Hour Rule?” I said: “You’re right.
Gladwell
claims that greatness requires enor- mous time. He cites the Beatles who performed over 1,200 times from 1960 to 1964, amassing more than 10,000 hours of playing time. The same thing is true in the case of Bill Gates who started working in a high school computer at the age of 13
and since then spent at least 10,000 hours on programming.”
Millet offered a counter-argument: “The trouble is that 10,000 hours can be easily achieved in about two years. Take this: 365 days times 24 hours will give you 8,760 hours.” Me: “Millet, don’t take the num- bers literally. I guess the 10,000- hour rule must only be considered the tipping point. Incidentally, it’s another book by Gladwell.” It turns out however that the Armani guy who went back to our table was an OK guy who possesses a God-given ability to borrow your Rolex™ watch and tell you what time it is. More importantly, he’s a prom- ising excellent fellow who will walk off with your watch with you as the willing victim. Then you’ll say: “No problem. That China-made watch is forged with toxic materials.”
Rey Elbo is a business consultant special- izing in human resources and total qual- ity management as a fused interest. Send feedback to
elbonomics@gmail.com or follow him on Twitter at reyelbo.
COMPANY Pepsi Cola
JTH Davies Holdings
NiHAO Mineral Resources
15.5 12 10 0
»OFWS BUYING HOMES 15.5
(in percent) 11.3 3Q 4Q
peso averaged 43.44 to the US dol- lar, down from the previous month’s 44.31 average.
The peso-dollar exchange rate has
lost five percent since the January average of P46.02:$1.
Money sent home by Filipinos
working abroad grew by 7.8 percent to $13.8 billion in the first nine months this year, from $12.8 bil- lion last year. For this year, the BSP expect re- mittances to grow by 8 percent from the 2009 full-year inflows of $17.3 billion. For the first quarter of next year, more households expect that their
expenditures on basic goods and services, specifically on food, elec- tricity, fuel, personal care and transportation, to go up, indicat- ing that substantial inflationary pressure could come from these goods and services.
The BSP earlier reported that con- sumer confidence hit an all-time high of -8.5 percent in the current quarter from -14 percent in the pre- vious quarter amid the country’s sound macroeconomic fundamen- tals and brighter prospects ahead. Inflation in November was re- corded at 3 percent or slightly higher than the previous month’s 2.8 percent.
Last month’s price uptick brought
the year-to-date average inflation to 3.8 percent or close to the lower end of the BSP full-year target of between 3.5 percent and 5.5 percent. BSP Gov. Amando Tetangco Jr. had said the central bank would continue to monitor the impact of new policy measures in major economies on domestic liquidity, global growth prospects and inves- tor risk appetite to see if adjustments are needed.
Infrastructure tack likely to sustain investments
BY BEN ARNOLD O. DE VERA REPORTER
THE government’s infrastruc- ture tack will sustain the dou- ble-digit growth in invest- ments next year, according to the Department of Trade and Industry (DTI). “We’re bullish [about investment commitments in 2011]. It’s hard to put a number now, but there should be double-digit growth next year,” DTI Secretary Gregory Domingo told re- porters last week. “We’re hoping infrastructure
munications, would be in- cluded in the Aquino admin- istration’s Medium Term Phil- ippine Development Plan (MTPDP) 2011-2016. Domingo said the DTI also expects additional investments in the business process out- sourcing, mining and tourism industries. The department’s two investment promotion agencies have posted growth in project ap- provals so far this year. The Board of In-
■ Gregory Domingo
investments will start to kick in. Some announced PPP projects are coming in next year and over the next three years,” said Domingo. PPP refers to public-private partnership projects, which the government expects to fuel eco- nomic growth next year. To prepare for the expected influx of infrastructure projects, the Cabinet would meet this week to determine the nation- wide infrastructure require- ments of various sectors such as agriculture, tourism and in- dustry, Domingo said. The DTI chief said the out- put of this Cabinet session, which would be led by the de- partments of Energy, of Pub- lic Works and Highways, and of Transportation and Com-
vestments (BOI) re- cently reported that pledges with the agency until end-October reached about P237 billion, almost threefold the about P80.4 billion gener- ated in the same ten-month period last year.
The BOI is expecting full-year
investments worth P287 bil- lion—the same level as 2008. The incentives-giving agency last year approved only P124.175- billion worth of investments. Investments committed to economic zones at end-Sep- tember totaled P80.62 bil- lion, up almost a third from the P61.05 billion pledged during the first three quarters of last year. The government expects
investments this year to reach P200-billion, or 15-per- cent higher than last year’s P175.365 billion.
STOCKHOLDERS’ MEETING SCHEDULE DATE
TIME PLACE
Dec. 15, 2010 Starts at 10am Grand Ballroom A, The Bellevue Manila, North Bridgeway, Filinvest Corporate City, Alabang, Muntinlupa City
Dec. 16, 2010 Starts at 3pm 7th floor, STI-Head Office Lounge, Phil. First Building, 6764 Ayala Ave., Makati City
Dec. 17, 2010 Starts at 4:30pm
5th floor, NiHAO-Sun Plaza, Shaw Boulevard corner Princeton Street, barangay Wack- Wack, Greenhills East, Mandaluyong City
GeoGrace Resources
Dec. 17, 2010 Starts at 3pm 5th Floor, NiHAO-Sun Plaza, Shaw Boulevard corner Princeton Street, barangay Wack- Wack, Greenhills East, Mandaluyong City
B 1
BEYOND THE BUZZWORDS
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