Thursday, 5 March 2009

Showbiz economic forecasting

John Mangun
Business Mirror

In order to form rational and educated opinions, it is necessary to keep an open mind. That is, to listen to both sides and be willing to assume that you do not know everything there is to know about a particular topic. Give those who speak to the other side of the issue the benefit of the doubt that they, too, are intelligent. I try to keep an open mind.

Then I realized something. Maybe people who hold a different opinion from me are idiots who cannot understand the facts they see. Or, worse, maybe they are fools who ignore the facts.

I keep reading the business section and then I am confused why so many people are so negative about the Philippine economy. Then I realized what the problem is. I am the one who is perhaps the idiot or fool. I must have been missing some important economic news that others are reading; therefore, I have reached a wrong conclusion that the Philippine economy is in good condition.

Look at the recent breakup of Pops Fernandez and Jomari Yllana. Obviously, this is representative of the major problems facing the economy. Mr. Yllana says about their breakup, “It’s not really about money,” even though they were just involved in a major business deal; a concert production. We know the truth. Business is so bad in the Philippines that even a very close intimate relationship could not stand the strains of a falling economy. I wonder if that is what happened to San Miguel Corp. and Japan’s Kirin beer. Kirin is trying to sell off its 20-percent share in San Miguel, Of course, Kirin is buying 40 percent of San Miguel Beer instead for P60 billion. But both parties said this “breakup” is not about money.

More important economic news from the celebrity world is found in the harsh corporate struggle between Dr. Vicki Belo and business rivals Manny and Pie Calayan. Business must be so bad in the Philippine bigger-breast/tiny-tummy industry that Dr. Belo tried to increase her market share by going after Calayan spokesman Boy Abunda. This, no doubt, also reflects the fierce competition in the telecoms/cell-phone battle between Smart and Globe. It will be very soon, because business is so bad, when we hear Manny Pangilinan of PLDT/Smart fight for the last few million available subscribers by saying that only people with fat, ugly thumbs can use a Globe cell phone. I guess Pangilinan is worried that the 2008 profit increase of 10 percent and 2009 projected increase of 7 percent is just not good enough.

I have been making positive predictions about the Philippine economy foolishly based on news that I thought was important, like Metro Pacific Investment group’s nearly P1-billion long-term investment in three major medical centers and hospitals—Cardinal Santos, Makati Med and Davao Doctors—which will generate P15 billion in over five years. Maybe if I had been following the 36D boob sector, I, too, would be down on the economy.

And then there is the Philippine Stock Exchange (PSE). All the “experts” from London to Makati have been saying that the Philippine economy is headed for a potential disaster, maybe even zero growth. And we all know that the stock market mirrors current conditions as well as sentiments for the future. But just like me, investors in the stock market must be really dumb about the economy. No matter how bad the Western and larger Asian markets fall, the PSE just keeps hanging steady. All the analysts tell us the PSE takes its cue from Wall Street. Yet, for some strange reason, the New York stock market is already down 25 percent in 2009, while the PSE is only down 2 percent. I mean, even Thailand’s investors are smarter than we are; their market is down 13 percent for the year.

However, to be fair, I probably do spend too much time reading the business section to help form my opinion of the economy. I saw something yesterday from another expert that said the Philippines should enact the reproductive-health bill because “continued rapid population growth in the Philippines is . . . slowing down economic growth.” That was from Ambassador Alistair MacDonald, head of the Delegation of the European Commission. Well, that is surely the final word we need on the Philippine economy and the future. Europe has proven that by having an aging population through population control, it guarantees economic-boom times forever. What could be better than having a bunch of old guys with no kids making decisions to borrow hundreds of billions of dollars for expensive houses and fancy cars and to play the financial markets? Who cares about the future when you don’t have any children who have to pay the bill when it comes due? Sounds like a great economic model to me.

In the meantime, since we are being told that the Philippine economy is soon going to collapse, you might just want to buy nearly every blue- chip stock you can get your hands on to make a 20-percent to 50-percent profit over the next nine months. It never hurts to face economic catastrophe with an extra million or two in the bank. I heard that in a movie once.

PSE stock-market information and technical analysis tools provided by Inc. E-mail comments to mangun@email.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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