Friday, 1 June 2012

Country posts 6.4% GPD for 1st Quarter

After four quarters of lackluster performance, the Philippine Economy is off to a rousing start in the year of the water dragon as GDP grew by 6.4 percent in the first quarter of 2012 compared to an upwardly revised growth of 4.9 percent last year.  The above expectations growth benefitted from a regime of benign inflation and drew from the revitalized Services sector, particularly from Trade and Other Services.  It also got a big boost from manufacturing which has recovered some grounds that got eroded during the third and fourth quarters last year.

On the demand side, the growth came mainly from net exports and the robust Households spending.

With compensation of our overseas workers on the rebound, the Net Primary Income (NPI) grew by 4.0 percent pushing the GNI/GNP growth to 5.8 percent from 3.5 percent in 2011.

On a seasonally adjusted basis, GDP gained momentum growing by 2.5 percent in the first quarter of 2012 while GNI grew by a slower pace of 1.3 percent.  With the growth of Poultry, Livestock, Corn, and Coconut including copra, the Agriculture, Hunting, Forestry and Fishery sector posted a turnaround growth of 2.5 percent in the first quarter from two consecutive quarters of decline. However, Industry slowed down to 2.2 percent growth from 3.3 percent in the previous quarter. But the Services sector accelerated to 2.6 percent from 1.3 percent in the previous quarter as all its subsectors recorded positive growth.

With projected population reaching 95.2 million, per capita GDP grew by 4.6 percent while Per capita GNI grew by 4.0 percent and per capita HFCE grew by 4.9 percent. Per capita HFCE has been growing robustly since the fourth quarter of 2010.

Secretary-General, NSCB

Thursday, 31 May 2012

You worry too much

Business Mirror

One of the earliest disaster movies, Fire! was made in 1901. This silent film showed a burning house and told the story of the firemen who put out the flames and rescued the residents. The first movie about the sinking of the Titanic was filmed in 1913, one year after the sinking.
The 1970s were the golden age of disaster movies with the release of Airport, the Poseidon Adventure, The Towering Inferno, Earthquake, and a number of others.

Perhaps because I am of the generation that grew up with constant predictions of disaster, I don’t care about them anymore.

My generation grew up with the actual threat of global nuclear war. We were also told that overpopulation would eventually use up the food supply but that the pesticide DDT would probably kill us all first. It was absolutely critical to Save the Whales and the rainforests. Oil, water and clean air would all be gone by the year 2000.

In 1970 I first visited the science research facility at the Haleakalā volcano in Hawaii. On the wall, one scientist had a graph of the 10-year daily readings of carbon dioxide (CO2) levels in the air at this 10,000-foot elevation. He explained that CO2 was a greenhouse gas that, if the increase continued, would soon doom the planet to extinction through increased warming.

By now that graph probably reaches to the third floor.

There is something about our human nature that attracts us to “disasters.” While few of us will ever experience an airplane crash, being caught in a burning building, or watch an asteroid destroy the planet, we want to know what it feels like.

Further, with the world at our computer/Internet fingertips, perhaps there is also a sense of power that previous generations never thought of, much less experienced. Maybe there is a feeling of being able to control disasters even though they are few and far between.

If I were to buy a ream of bond paper and write down all the things that I need to think about, important things that might affect my life, priorities that I want to do something about, Senator Defensor-Santiago’s appointment to the International Criminal Court might appear on page 498, right after being kidnapped by aliens and right before experiencing the pain of childbirth.

Yet, there are some people who have included this in their daily agenda and are pushing computer buttons to do something about it. I find it a little amazing that there are not more serious situations that need addressing.

I only use this as an example and mean no disrespect to anyone’s concerns. But might this not be creating a disaster just to try to fix it?

When the stock market started going down in early May, people were speaking of a disaster, massacre and bloodbath. No. Sorry. The civil war in Syria is a disaster, massacre and bloodbath. A falling stock market is not.

Not wanting to “go all religious,” but I believe there is truth to the thought that the more people embrace secular thinking, the more fearful they become even about the market. The bible quotes the words of Jesus as, “My peace I give to you. Let not your heart be troubled, nor let it be afraid.” Those are powerful words of calming influence, if you believe them.

But then again the apostles never knew how to deal with the PSE index losing 8 percent in two weeks, right? Maybe not.

As with falling airplanes, flaming buildings, and other disaster preparedness, stock investors may do well to listen to some further biblical advice. The book of Proverbs says, “Careful planning puts you ahead in the long run” and “Get all the advice you can, and you will succeed; without it you will fail.”

My No.1  stock-market advice is “Expect the best. Prepare for the worst. Capitalize on what comes.” Worry is not part of your trading plan.


E-mail to, web site is, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.

Health-care standard in the Philippines rises; four hospitals get international accreditation

Business Mirror

THE health-care system in the Philippines is considered generally to meet global standards, with hospitals and other medical centers in the country able to pass accreditation tests given by international organizations.

Four Philippine hospitals have been cited by Joint Commission International (JCI) for rendering the best service to Filipino patients. They are Makati Medical Center, The Medical City in Pasig City, St. Luke’s Medical Center (SLMC) in Quezon City and Chong Hua Hospital in Cebu.

Read the full article.

Tuesday, 29 May 2012

Economic risk on/risk off

John Mangun
Business Mirror

People who believe that a government can create jobs are wrong. A government can employ a person to do a job but a government does not have the financial means itself to pay the salary. A government must take the money from someone else to pay for its employee.

“The government can create jobs” relies on the fallacious argument known as the “Duck Test.” If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

The reason people make this incorrect assumption is that a government can look like a private corporation with a pyramid-shaped management structure and various departments with different functions. Swimming, like a private corporation, means having promotions, resignations, firing people and holding elections. A government can quack like a corporation with quarterly results, annual reports and lots of favorable forecasts.

But the look, swimming ability, and the quack do not make a duck a duck. It is the DNA of the Anatidae family of birds that makes the duck.

Part of the DNA of a corporation requires it to seek to earn a profit and gives its sole reason for existing. A government does not have profit as part of its DNA. Therefore, any job that a government creates is not to make a profit, as is true in a private corporation.

Many government employees provide services to the public that are then paid for by taxes, which, in effect, are a user fee. However, to expect a government to create and provide jobs is to assume that there is an ever-increasing demand for those government services. The Philippine government has actually tried that employment model. The number of government employees has grown by percentage faster than the general population although the two main services that people want, police and teachers, have not matched population growth.

History shows that all three branches of the government can stimulate jobs growth by reducing the risk of doing business by private-sector companies.

When you read about the factors that limit economic growth in the Philippines, it always comes down to the way that the government has failed to reduce the risk of doing business in this country.

Private enterprise needs a transportation infrastructure to get employees to their jobs and to get products quickly, and in an affordable manner, to the marketplace. The Philippine government has failed to assist in job creation.

Private business needs a legal system that can be relied upon for quick and impartial decisions. The Philippine government has failed.

The private sector needs fiscal and monetary policies that reward success and encourage investment. Another failure.

Every business needs a peaceful and orderly environment to operate where both the individual and the corporation feel safe and secure. More failure.

The private business owner needs to be able to be innovative and given the freedom and incentive to try new business models without burdensome government intervention. The Philippine government has failed to assist in job creation.

The highly successful outsourcing business has created hundreds of thousands of jobs because the Philippine government allowed and encouraged it to prosper on its own. The Peza incentives reduced the financial risk as these companies were starting up. The government provided encouragement for employees to join this new industry through some government-sponsored training programs. The government never halted the development of the outsourcing industry by lengthy and useless studies to figure out how the government could make the industry better.

Wisely, the government during the last 10 years acted as a facilitator, letting the private sector be the leader rather than trying to control the business as it is doing in so many other industry sectors.

Instead of taking the risk off, the government put more risk on by changing the rules as in the mining sector.

The risk of doing business in the Philippines will always be too high until the country has leaders who understand that the government is there to serve and not to control.


 E-mail to, web site is, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.