Saturday, 7 November 2009

Pacman shows RP ‘small but mighty’

By Francis Thimsel J. Ochoa
Philippine Daily Inquirer

HOLLYWOOD — Manny's time has come.

The Filipino ring icon, generally regarded as the world’s pound-for-pound champion, graces the cover of Time Magazine Asia edition—where he is featured in a five-page story—that will hit the US and global magazine stands this weekend.

Not only is he the first Filipino to grace the weekly magazine’s cover since the late former President Corazon C. Aquino, regarded as the icon of democracy, but he is also the first boxer in 20 years to be accorded the honor, after Mike Tyson.

“It’s amazing,” Manny Pacquiao said of the recognition that continues to collect at his feet since plowing through top-caliber opposition across different weight classes. “I never expected that to happen.”

The Filipino, Asia’s No. 1 boxer and revered in his home country with unparalleled fervor, is set to face Puerto Rican champion Miguel Cotto on Nov. 14 in Las Vegas, where he will try to become the first boxer to win titles in seven different weight categories.

In an interview with, Pacquiao expressed elation at gracing the cover of the prestigious magazine. His picture on the cover is accompanied by the words: “The Great Hope: Why Manny Pacquiao is more than just the world’s best boxer.”

‘Small but mighty country’

“I absolutely had no idea that when I started my career in boxing, to provide a better life for myself and my family, that I would now be where I am today and on the cover of TIME Magazine,” Pacquiao told

“A fighter’s dream is to win a world title and gain financial stability. But what is happening to me now is the most humbling experience of my life.”

In the interview, which is making its rounds online, Pacquiao said the world boxing stage had given him the chance to show the Philippines to be a “small but mighty country.”

“It is a great honor for me to be the face of my people and to let everyone know we are a small but mighty country,” he said. “I have great pride for all of the Filipinos living throughout the world and it is these people that I fight for each and every time I step into the ring.”

A demigod

Pacquiao has never failed to dedicate his matches to the Filipino people, and they have responded with an unmatched dedication to support him in every battle.

And the Time story, which refers to Pacquiao as the “face for the selfless,” captures exactly how his countrymen have reciprocated his affections for them:

“In the Philippines, Pacquiao is a demigod. The claim goes that when his fights are broadcast live, the crime rate plummets because everyone in the country is glued to a screen.”

Like Muhammad Ali

Top Rank chief Bob Arum, the fighter’s promoter, even likened Pacquiao to Muhammad Ali, undoubtedly the greatest boxer across all eras.

But take the iconic Ali out of the picture, and this era clearly belongs to Pacquiao, a reign that began when he destroyed former boxing poster boy Oscar De La Hoya in eight brutal rounds in December last year.

Time’s decision to put Pacquiao on its cover validates that claim.

The magazine story, titled “The Meaning of Manny,” traces the boxer’s colorful life, from the time he spent sleeping on cardboard boxes in street corners in Mindanao, to the fateful day in 2001 when—fighting as a substitute—he won his US world title debut in shocking fashion via a knockout victory over Lehlo Ledwaba.

Punch could’ve floored Tyson

Then on to his current run of smashing victories, the latest of which was a two-round knockout of British star Ricky Hatton last May.

His victory over Hatton has become one of boxing’s favorite highlight reels, his looping left finisher described by his upcoming opponent as a punch that “would’ve knocked out even Mike Tyson.”

That victory capped a string of wins that netted for Pacquiao three world titles in different weight classes—super featherweight (via decision against Juan Manuel Marquez), lightweight (9th round KO against David Diaz) and light welterweight (Hatton).

Fight of his life

Pacquiao, in fact, hasn’t lost since four years ago, when he dropped the first match of a thrilling trilogy against Mexican legend Erik Morales via unanimous decision. Pacquiao won the next two fights of that trilogy—both by knockout.

The Time story also explores his religious side and his entry into the political fray, which it describes as the “fight of his life.”

But it is unlikely that the result of his political battle will end up defining his legacy. In defying the limitations initially set on him by poverty, Manny Pacquiao has already won his biggest battle.

As trainer Freddie Roach was quoted in the story, Pacquiao “has nothing more to prove.”

EU foundation opens new IT lab in UP

By Alexander Villafania

MANILA, Philippines—The demand for more information technology (IT) skilled workers from the Philippines continues to grow as the global economy recovers from the credit crunch.

With it the European IT Service Center Foundation (EITSC) continues in its build up of more IT training facilities with the opening of a fourth center at the University of the Philippines Diliman campus.

The EITSC Computer Laboratory at the UP Diliman campus is part of a multi-agency project entitled “Establishment of Market-Driven and Technology-based Courses and Further Training for the Information Technology Sector in the National Capital Region.”

Starting in 2004, this project is a partnership between the EITSC and the Hanns Seidel Foundation/Germany (HSF), with a funding of about 740,000 euros (P52 million).

The new facility is actually the third offsite location under the project. The fourth one is the EITSC Training Hub at the EITSC headquarters in Makati City.

The UP Diliman EITSC Computer Laboratory is a 52-square meter location with 25 computers, a projector, and a wall-mounted screen.

It is similar to the three other offsite facilities but the UP Diliman facility will have a new dualized training system (DTS) wherein the EITSC will partner with an industry organizations such as those in the business process outsourcing services.

The concept of the DTS is to enhance the employability of Filipino students, graduates and professionals in specific local industries.

The DTS will include a competency standard and a competency curriculum. For now, the curriculum includes 53 learning packages for the contact center service.

Some of the partners of the EITSC Computer Laboratory’s DTS are the University of Makati, Rizal Technological University, ATRIEV Computer School for the Blind, Rainmaker Asia, Accenture Philippines, and the UP System IT Foundation.

So far, the EITSC-HSF project has trained 773 professionals from 171 enterprises and 92 academic institutions.

China Bank nine-month profit rises 40.7%

Alria M. Ventanilla

CHINA BANKING Corp. reported a 40.7% year-on-year increase in net income to P3.21 billion in the nine months to September from P2.28 billion a year ago, on improved lending margins and trading gains.

In a statement Friday, Chinabank, one of the two banks controlled by business tycoon Henry Sy, said growth was boosted by the 29.5% expansion in net interest revenues and the 68.4% rise in non-interest revenues during the period.

Net interest revenues grew mainly on account of stronger lending and improved margins arising from continued growth in low-cost deposits. Non-interest revenues, meanwhile, were lifted by higher trading and foreign exchange gains as well as revenues from the disposal of acquired assets.

"With our continued focus on improving service, strengthening our balance sheet, and effective management of risks, we were able to sustain our growth momentum for this year," China Bank executive vice-president and chief operating officer Ricardo R. Chua said in a statement.

China Bank said its total assets inched up by 2.8% to P214.39 billion by end-September from its December level.

Total deposits grew by 42% to P174.04 billion.

Higher appetite for lending products by the corporate and consumer sectors allowed its average loans to rise by an annual 12%.

China Bank’s financial strength, as measured by capital adequacy ratio (CAR), remained sturdy at 13.38%.

On Friday, China Bank shares closed at their intra-day high of P362.50 apiece.

Globe nets P9.9 B in 9 months, up 12%

Manila Bulletin

Buoyed by the growth in its broadband and fixed-line data businesses, Globe Telecom hauled in consolidated service revenues of P46.9 billion for the first nine months of 2009, inching up 1% from last year’s P46.6 billion and netted P9.9 billion earnings, up 12% from P8.8 billion in the comparative period.

Globe is headed by Ernest L. Cu, president and chief executive officer, who took over that twin positions earlier this year.

The telco’s core net income, which excludes foreign exchange and mark-to-market gains and losses and non-recurring items, was steady at P9.4 billion.

Significantly, Globe’s broadband and fixed-line data concerns skyrocketed 69% and 22% from 2008, compensating for the lower revenues from the mobile and traditional landline segments.

The telco’s mobile subscribers dipped slightly from 23.7 million to 23.1 million in the same period as the company continued to churn out marginal subscribers acquired in earlier quarters and focused its acquisition drives towards better quality subscribers.

This shift in acquisition focus has translated to some early gains, with its mass market brand TM demonstrating higher revenues and ARPUs quarter-on-quarter despite a contraction in its SIM base.

EBITDA for the period stood at P27.6 billion, 3% below last year’s level, with EBITDA margin at 59% from 61% in 2008 as operating expenses and subsidy grew faster than revenues.

The company’s broadband business continued to gain momentum as subscriber base grew almost three-fold to over half a million subscribers, beating full-year expectations. All broadband products posted record quarterly net additions, with fully mobile Internet service Globe Broadband Tattoo leading the way.

The robust subscriber growth has translated to a revenue improvement of about P907 million or 69% from last year, closing the period with P2.2 billion in revenues.

“We will accelerate our broadband capacity build to capture the growing demand for the service and to solidify the gains we have attained,” noted Ernest L. Cu, President and CEO.

“While competition remains intense, we believe that we have the right strategies to further improve the competitive position of our mobile business,” he added. “We will strengthen our brand portfolio through innovative and affordable product offerings, resume the growth of our subscriber base through quality acquisitions, while continuing to upgrade and improve the robustness of our network.”

End-October 2009 GIR Level Rises to US$43.2 Billion

Bangko Sentral
Media Releases

The country’s gross international reserves (GIR) level rose to US$43.2 billion as of end-October 2009, US$0.7 billion higher than the end-September 2009 level of US$42.5 billion, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. announced today.

The increase in the preliminary GIR level was due mainly to inflows from foreign currency deposits by the National Government (NG) of the proceeds from its third bond issuance for 2009 and a loan from the Asian Development Bank, revaluation gains on the BSP’s gold holdings arising from the higher price of gold in the international market, and income from the BSP’s investments abroad. These receipts were partly offset by outflows arising from the payment of maturing foreign exchange obligations of the NG and the BSP, as well as foreign currency withdrawals by authorized agent banks (AABs).

The current GIR level could cover 8.0 months of imports of goods and payments of services and income. It was also equivalent to 9.1 times the country’s short-term external debt based on original maturity and 4.0 times based on residual maturity. 1

The level of net international reserves (NIR), which includes revaluation of reserve assets and reserve-related liabilities, likewise increased to US$43.1 billion as of end-October 2009, higher by US$1.2 billion from the previous month’s level of US$41.9 billion. NIR refers to the difference between the BSP’s GIR and total short-term liabilities.


1 Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

Friday, 6 November 2009

MVP buys 6.7% more of Meralco

By Zinnia Dela Peña
The Philippine Star

MANILA, Philippines - The Lopez family will hand over half of its remaining stake in Manila Electric Co. (Meralco) to the PLDT Group of Manuel V. Pangilinan, a move that will put the telecom magnate on the threshold of acquiring control of the country’s biggest power distributor.

Through First Philippine Holdings Corp.(FPHC), the Lopez family still has a 13.4-percent stake in Meralco. A bigger 20-percent block was sold earlier this year to the PLDT Group and is now held by Pilipino Telephone Co. (Piltel).

Following FPHC’sboard meeting yesterday, company president Elpidio Ibañez said the board granted Metro Pacific Investments Corp. (MPIC) – First Pacific’s local unit - a call option on 74.7 million common shares or approximately 6.7 percent of the outstanding capital of Meralco.

The deal effectively thwarted an offer made last week by Triratna Holdings Corp. led by Henry Sy Jr. – the eldest son and namesake of the country’s richest man - who offered to buy the entire 13.4 percent holdings for P300 a share or a total purchase price of P44.75 billion.

The Pangilinan-led group, under the banner of the Hong Kong-based conglomerate First Pacific, has the right of first refusal on the contested stocks and decided to exercise this option by matching the offer price put forward by the Sy-led company.

A call option is a financial contract between a buyer and a seller, wherein the buyer has the option to buy stocks at a specified time in the future.

Ibañez said the company decided to keep half of their shareholdings in Meralco to maintain a strategic presence in the country’s largest power distributor. “If you notice, all throughout the discussions, we were really just interested in selling half of our stake for now,” he said.

Ibañez said the call option is excercisable at any time from the date the call option is granted until March 31, 2010.

Analysts said the call option was intended to give MPIC more time to raise funds for the purchase of additional shares in Meralco.

Also part of the deal was a short-term loan to be extended by MPIC to FPHC amounting to P11.2 billion, or half of the 6.7 percent stake to be sold to the Pangilinan-led group.

Ibañez said the loan will reflect in a promissory note which will mature on March 31, 2010 and will have an interest of five percent per annum. The loan will be secured by shares of Meralco and First Gen Corp., a unit of FPHC.

Lopez patriarch Oscar Lopez, FPHC chairman and chief executive officer, said: “We are very happy with the agreement reached with Mr. Pangilinan’s group. It reflects a valuation that shows the strong growth prospects of Meralco. The proceeds no doubt will allow FPHC to pursue its new directions and further establish itself in the country as the premier renewable energy provider.”

Ibañez, however, noted that no sale has yet been consummated as MPIC has been given until March next year to decide on it.

He said FPHC intends to use proceeds from the sale to pay debt and infuse an additional P10 billion into First Gen. Around $20 million has also been allotted for First Philec Solar Corp.

Ibañez said the sale, when completed, will leave the Lopez family with just one board seat from the existing two seats they own.

He pointed out that the decision to sell to the Pangilinan group was unanimous. FPHC director and Meralco chairman Manolo Lopez did not join the meeting as he was abroad.

Sy, the president of Triratna, said their offer reflects the group’s “confidence in the future prospects of the power sector in general and Meralco in particular.”

But Sy, son of retail tycoon Henry Sy Sr. of the SM Group, is widely perceived to be an ally of diversifying food and beverage conglomerate San Miguel Corp., which earlier signified its intention to acquire the Lopezes’ shareholdings in Meralco.

Triratna was among those pre-qualified to bid for the 25-year concession of power grid operator National Transmission Corp.(TransCo) in 2006. Aside from the Sy family, the other major shareholders of the private firm during the time were San Miguel Corp. president Ramon S. Ang, Joselito Campos of Unilab and foreign partners Newbridge of the US and Tenaga National Bhd. of Malaysia.

The younger Sy, however, distanced himself from the San Miguel Group, saying Triratna will be majority owned by him after it completes the buyout of its original partners.

The Pangilinan-led group, which has the right of first refusal on the contested block, currently holds 34.7 percent of the power utility giant through Piltel’s 20 percent stake and infrastructure holding firm MPIC’s 14.7 percent.

The PLDT Group’s decision to exercise its right of first refusal would subsequently trigger a mandatory tender offer to the other shareholders.

Under the Securities and Exchange Commission’s tender offer rule, an entity that acquires 35 percent of a listed company must buy the remaining shares held by minority shareholders at the same price.

San Miguel, which has been diversifying from the food and beverage markets to power, toll roads, and telecommunications, owns 27 percent of Meralco. Together with ally Global 5000 Investments Inc., the San Miguel Group holds a total of 34 percent in the utility giant.

GMA Network net income higher by 10% in nine months

Emilia Narni J. David

Profits of broadcast company GMA Network, Inc. rose by 10% from January to September even as big advertisers have made cutbacks.

In a press briefing yesterday, GMA Network said net income rose to P2.1 billion for the period compared with P1.9 billion last year.

Nine-month revenues went up to P10 billion from last year’s P9.3 billion, due to higher airtime revenues and international subscriptions.

Airtime revenues for January to September reached P9.2 billion, an increase of 5% from P8.8 billion in the same period last year. The rise in airtime revenues came from flagship Channel 7, QTV Channel 11, and radio.

Despite higher airtime revenues, GMA Network said there was a decrease in advertising minutes.

In the third quarter, the network’s advertising minutes fell by 6.6% to 25,774 minutes from 27,581 minutes last year. The network said though that its advertising minutes were still higher than those of competitor ABS-CBN Broadcasting Corp., which logged a 16.6% decrease in minutes.

GMA Network Chairman Felipe L. Gozon said the company recorded a cutback from big advertisers but noted that smaller advertisers have been taking up the slack. Advertising in October and November has also been picking up.

“So far for November, sales figures for advertising have amounted to P767.9 million and that is only for [Channel 7]. In November 2008, we had P930 million so we will definitely have higher advertising numbers,” said Mr. Gozon.

Gilberto R. Duavit, GMA chief operating officer, said “this quarter is the strongest year-end quarter we have had.”

General and administrative expenses of the company grew by 18% to P2.6 billion mainly because of higher personnel costs after management signed a three-year collective bargaining agreement with employees.

“There was a one-time payoff of P150 million to our employees, which increased our expenses by 18% in the third quarter but that would only affect us now and not in the future,” said GMA Network Chief Financial Officer Felipe S. Yalong.

Subscriptions to international channels GMA Pinoy TV and GMA Life TV totaled 600,000 as of September.

Mr. Yalong said the network was still on track toward meeting its target net income of P2.8 billion by the end of the year.

“We are confident that we can reach our target because based only on our October and November numbers, we are doing good,” he said.

Mr. Gozon pointed out that the early filing of candidacy may affect the placing of ads by political figures but said big volume advertisers are going to advertise more because of the lack of political activity.

“There would be no campaign ads in December because politicians have already filed their candidacy. The campaign period will not start until February. Politicians can’t show ads and television stations also can’t. It’s not bad because big volume advertisers cut down ad spots during elections so we are banking on these advertisers to put in ads in place of political ads,” said Mr. Gozon.

GMA Network was able to make P400 million from political ads, P300 million of which were from private entities including politicians with “advocacies.”

Another BPO firm expands RP presence

Philippine Daily Inquirer

MANILA, Philippines--UST Global, a leading provider of end-to-end IT, BPO services and solutions, will expand its Philippine workforce by hiring 1,000 recruits. Over the next few years, UST expects to increase the number of its workers at the IT services and BPO center to over 5,000.

This reflects the growing demand for the company’s outsourcing services and strengthens the Philippines’ presence as UST’s second largest location outside the United States, following India.

“UST is grateful for the help and support from the government of the Philippines in establishing and expanding our presence here,” said Joe Nalkara, chief operating officer for UST Global. “The natural cultural compatibility with the US and time zone efficiency make the Philippines an important part of our growing Asian presence and long term global strategy.”

UST invested in the Philippines to take advantage of the country’s highly skilled IT workforce.

Thursday, 5 November 2009

Kodak makes grand comeback here

Manila Bulletin

After two years of being represented only by its authorized nationwide distributors in the Philippines, Kodak makes a grand come back this year with the re-establishment of its Philippine office, particularly its Consumer Digital Imaging Group.

According to Kodak Phils. Ltd. Country Business Manager for Retail Printing Cathy Pacia said the company is gearing up to further grow the Kodak business in the country with its array of innovative products ranging from its fast-moving paper and consumer film products, trendy digital cameras, cost effective and eco-friendly digital printers, as well as creative photo gift items for all occasions.

“We are in exciting times when digital technology has inspired Kodak worldwide to grow by leaps and bounds with its product offerings. Kodak has indeed done a good balancing act, aggressively promoting our digital imaging portfolio, while preserving our traditional film and analog camera business,” Pacia said.

Pacia explained that the photo printing business has slowed in the past years due to the growth of digital photography which saw consumers just storing in their computers images taken through their digital cameras. The industry, however, is again well poised for growth as consumers are starting to appreciate the many creative ways they can employ to enhance and print their digital photos with the advent of exciting and new interactive printing services, that is, from Kodak.

In May of 2007, Kodak announced its transition into a “distributor model” for the bulk of its business comprised of Consumer Digital & Film and Photofinishing Group. Its operations consequently reverted back to one where a local company, Techtrends Corporation, just represented the Kodak parent company, multinational Eastman Kodak Company, in the Philippines.

Techtrends Corporation, aside from its sub-distributorship agreements with different outlets in Luzon, Visayas and Mindanao, also own the Kodak Express one-stop digital shop franchise which now have a formidable nationwide network of more than 350 stores.

With Kodak Philippines re-establishing its presence in the Philippines, it will be playing a big part in coordinating its marketing and promotional activities with its authorized nationwide distributors led, primarily, by Techtrends. Two other distributors, Wordtext Systems Inc. and Euro Color Imaging Corporation, are also briskly pushing the Kodak’s continuous growth in the Philippines.

Anna Cabanos, Kodak Phils. Ltd. Country Business Manager for Digital Capture and Devices, said, “Kodak has brought back its Philippine office to ensure that the Filipinos are always kept abreast of the latest exciting offerings from Kodak.”

SMC reports P57-B profit in first 9 months, up 172%

Manila Bulletin

Diversifying conglomerate San Miguel Corporation reported a recurring net income (before one-time gains) growth of 6 percent to P7.61 billion from the P7.13 billion recurring profits from the same period in 2008.

The firm said in a disclosure to the Philippine Stock Exchange that strong first nine months results were driven by the sustained growth of its beer and liquor units, along with higher productivity and continuing cost discipline across all businesses.

Net income as of September 2009 reached P57 billion, 172 percent more than the P20.9 billion profit in the same period last year.

One-off items this year include gain from the sale of SMC’s 43.25 percent stake in domestic beer of P50.7 billion which was used to prepay the SMC’s debt of $923 million or P44 billion, and the gain from discontinued operations of J. Boag in 2008 of P5.7 billion Net income last year included gains from the initial public offering of beer unit San Miguel Brewery Inc. and sale of other assets.

SMC said consolidated revenues grew 4 percent to P126.5 billion in the first nine months of 2009 while operating income ended the period at 12 percent higher at P13.1 billion.

Volume improvements combined with cost management and stable raw material prices boosted San Miguel Brewery’s performance after a difficult first three months for the Company’s beer unit.

SMB Inc. revenues and operating income were both up 5 percent in January-September to P37 billion and P11.3 billion, respectively.

SMC is planning to raise P17 billion from the private placement of its Series 1 Preferred Shares to beef up its warchest after issuing P65.49 billion worth of it in exchange for common shares accounting for 27.63 percent of its capital. The firm said its board has approved the issuance, through private placement, of up to 226.8 million Series 1 Preferred Shares.

The proceeds from the issuance will be used to finance investments and acquisitions of SMC. The SMC board has authorized Management to determine the issue price and dividend rate of said preferred shares.

SMC president Ramon S. Ang said the principal reasons given by shareholders for availing of the earlier Exchange Offer were the higher face value of the preferred shares of P75.00 per share versus the market price of the common shares when the exchange was first announced.

The preferred shares also promise a higher dividend rate of 8 percent per annum, which translates to P6.00 per share per annum versus the common dividend of P1.40 per share given in the past many years.

PGMA leads the groundbreaking of the $ 40-M SoKor project in Clark

CLARK FREEPORT, Pampanga, Nov. 5 (PNA) -- President Gloria Macapagal-Arroyo on Thursday led the groundbreaking of the $ 40- million South Korean project at the former Grand Duty Free area here.

The President, together with Clark Development Corporation (CDC) president Benigno Ricafort and other local officials, lowered the ceremonial time capsule that signaled for the construction of the 10-storey building in a 1.69-hectare area.

The groundbreaking is an offshoot of the signing of an agreement between Ricafort and Donggwang Clark Corp. Chairman Shin Kun Lee during the Chief Executive’s state visit to Korea when she attended the ASEAN-Korea Leaders’ meeting last May.

Ricafort said the proponent expects about 500 job opportunities for residents of the Metro Clark area and in neighboring towns and provinces in Central and North Luzon.

He said the construction of the building covers the first phase of the huge tourism project that the Korean firm will establish at the Next Frontier in Sacobia Valley here.

He said the planned $ 150-million resort complex to be constructed at the Next Frontier area will initially employ 1,000 workers.

The site development planning of the project is on-going, with construction to start upon CDC’s approval of the development plans, he said.

Earlier, the same Korean firm also informed the CDC that an estimated P218 million will be poured for the construction of a 1.8-kilometer spine road and the 4.5-kilometer East Road 2 that connects the Next Frontier to the McArthur Highway.

These roads are in support of the 300-hectare tourism estate to be developed by Donggwang in the Next Frontier area.

Ricafort said the road projects will be built “with no cash out” on the part of the CDC and will be considered as advance lease rentals following standard government procedures.

Donggwang Construction Co. Ltd (DCC) is the mother company of Donggwang Clark Corporation. DCC is one of the largest construction companies in South Korea.

The company boasts of a total asset amounting to 1.2 trillion won or around $ 945 million.

DCC currently owns and operates three golf courses and condotels in South Korea namely, Sorak Sun Valley Country Club, Dongwon Sun Valley Country Club, Iljuk Sun Valley Country Club, and the Japan-based Yabe Country Club. (PNA)

Pasig looking beyond the storm

Vernadette Joven and Dino Maragay

Aboitiz, RCBC defy economic slowdown

Jenniffer B. Austria and Eileen A. Mencias
Manila Standard

ABOITIZ Equity Ventures Inc. and Rizal Commercial Banking Corp. booked higher earnings in the first nine months despite the worldwide economic slowdown that started late last year.

Cebu-based Aboitiz Equity Ventures said its net income rose 74 percent to P5.9 billion during the period, with its power unit contributing 54 percent to group profit followed by the banking group (26 percent), the food group (14 percent), and the transport group (6 percent).

The group also booked a non-recurring gain of P543 million from the termination of the planned sale of Aboitiz Transport System to KGLI-NM Holdings Inc.

“It is very assuring to know that all our businesses are not only profitable and performing well, but have strong cash flows and healthy balance sheets that are important to sustain their growth,” group president Erramon Aboitiz told the Stock Exchange.

He said Aboitiz Power Corp. contributed P2.9 billion to group income, Aboitiz Power P2.3 billion, and Aboitiz Equity P1.4 billion.

Union Bank of the Philippines handed over P1.3 billion, and City Savings Bank P56 million, Aboitiz said.

The Yuchengco Group-controlled Rizal Commercial Banking Corp. said its net income rose 47 percent to P2.82 billion from P1.92 billion, and it rose despite a P739-million increase in provisioning for losses.

The bank’s operating income increased by P1.93 billion to P12.11 billion, with net interest income growing by 19.4 percent and non-interest income by 18.3 percent.

Most banks reported a fall in non-interest income—gains from trading, foreign exchange and asset sales—last year, but many have been reporting a turnaround from that income source this year.

RCBC said its non-interest income soared to P4.56 billion from P3.85 billion a year ago, boosted by the sale of an office building.

“RCBC adopted strategies meant to prepare itself for a volatile economic environment in 2009,” chief executive Lorenzo Tan said.

“The bank raised an additional P4.2 billion in tier 2 capital, sustained an aggressive low-cost deposit campaign, exercised prudence in its loan approvals, and achieved exceptional trading gains by riding the market’s volatility successfully.”

The bank opened 14 new branches this year, bringing its total to 335, and installed 86 more automatic teller machines to bring the total to 469.

The bank’s capital-to-risk ratio improved to 19.26 percent from 17.3 percent. And its higher tier 2 capital put it well above the 10 percent required of banks.

BDO sees GDP growth exceeding government target

Erik de la Cruz
Business Mirror

The domestic economy will grow by 2.3 percent this year according to Banco de Oro Unibank (BDO), a more upbeat forecast than the government’s growth projection of 0.8-1.8 percent.

The economic research team of the country’s biggest bank, in a report released on Wednesday, predicts growth next year will be a bit faster at 2.5 percent, but below the government’s target of 2.6 percent to 3.6 percent.

“The country is struggling to rise above the challenges in the wake of the recent calamities that besieged the country,” says BDO chief market strategist Jonathan Ravelas, referring to the onslaught of recent back-to-back typhoons.

But on a positive note, he said “growth prospects continued to improve” following the better-than-expected performance of the economy in the second quarter of this year, and with the global economy now recovering from the deepest slump seen in decades.

“Strong indicators of rising economic activity have supported the rise in the global financial markets,” Ravelas said. He noted, however, that “the US and the rest of the world are still a few distance away from full recovery as joblessness remains high and demand has not returned to pre-crisis levels.”

He painted a more upbeat scenario in 2010, saying the Philippines’ gross domestic product (GDP) will grow a bit faster because of “a much-improved global outlook as developed countries post positive growth while Asian [nations] lead economic recovery.”

 He said domestic demand will drive GDP growth next year, boosted as usual by money remitted by Filipinos abroad, and further by election spending and the government’s rebuilding efforts in calamity-stricken areas.

With the global economy expected to pull out from recession by next year, Ravelas said investors will become more willing to invest in riskier emerging-market assets. The Philippines, particularly the local stock market, is thus expected to benefit from increased capital flows, he said.

Foreign direct investments are also seen picking up next year, especially after the May elections, as the new government bares its economic-growth agenda for the next six years, he said.

A “healthy” external-payment position will boost the peso-dollar exchange rate to 46 next year from a projected year-end level of 47.75 this year.

“The [balance of payments] is expected to post a higher surplus, fundamentally supported by remittances, increased capital inflows and revived exports,” Ravelas said. The country’s gross international reserves “should remain [at] record levels, adequately covering import requirements.”

He expects the Bangko Sentral ng Pilipinas to hike its key interest rate by 75 basis points in 2010 from the current record-low level of 4 percent.

Interest rates will have to be jacked up, he said, as inflation is bound to rise on pump-priming measures and election spending, and with expectations of higher consumer prices going forward amid increasing demand.

The government’s budget deficit is projected to be at a level equivalent to 3.5 percent of GDP this year. The ratio is expected to drop to 3 percent next year and further to 2.88 percent in 2011, he said.

How to trade in stocks

John Mangun
Outside the Box
Business Mirror

One of the most interesting characters of the stock market history is Jesse Livermore. After making and losing several multimillion-dollar fortunes trading the market, Jesse committed suicide in 1940, not because he was broke; he had $5 million in the bank. He had simply lost his confidence in trading stocks. And this was a man who made $3 million in the crash of 1907 and $100 million in the famous crash of 1929.

Adding to the mystique of the man is that his only son, Jesse Jr., also committed suicide, by inhaling natural gas in 1976; his son, Jesse III, killed himself exactly the same way in 2006.

Livermore was the No.1 example of a trader, not an investor. The $3 million that he earned as profit in 1907 was lost in a series of brief trades in cotton.

His success in 1929 was the realization that there was not enough capital and liquidity in the US economic system and eventually that fact would catch up with the market and cause stock prices to fall. He successfully shorted the market prior to the crash. It was the same formula he had employed in 1907.

By 1934 he was broke again and he never regained his touch. In 1940 he wrote How to trade in stocks, a book that never found favor with market players because of his unusual and novel ideas. One quote probably says it all about stock trading and stock traders: “The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.”

Reading Livermore is what first got me interested in technical analysis as a very young trader and then as a stockbroker. Livermore wrote, “All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis.” This thought is the foundation of technical analysis. The lessons that Livermore learned and the “trading rules” he practiced were finally popularized in the book Reminiscences of a stock operator by Edwin Lefevre in 1940; Lefevre is the front man for the book that Livermore probably wrote himself.

The most important fundamental of Livermore’s trading was to cut losses quickly. This is the most difficult of all trading habits to follow.

Cutting losses quickly is the No. 1 strategy that a trader must employ. Look at 2008. Those that bought, held, and hoped were wiped out. Rationalizing a losing position is the best way to go broke. I cannot overemphasize to my market update subscribers that a position that breaks below technical support should be sold and sold without ever looking back and without any regret.

Stocks will not always—maybe not even the majority of the time—go in the direction you want them to. But holding a losing position is like having a death wish. A falling stock that you own at a higher price may seem bad. But I guarantee you that tomorrow or next week or next month, you will wish you had sold it when it was only “bad” because eventually that position will become a losing nightmare.

Knowing at what point to cut a position can be found through technical analysis and the price supports that the charts show. Livermore called these “pivotal points.” Not only do these pivotal points show trends but they reflect momentum. Higher highs and higher lows as we having now on the long-term PSE Index charts are a solid indicator that a current uptrend is merely taking a slight pause for the moment.

Cutting losses quickly protects a losing position. However, profit-taking can be just as problematic. Although an
aggressive speculator, Livermore did not like losing. He never committed and traded all his funds at one time. He would buy a stock as it rose, putting more and more money into the stock as it went higher. Livermore was neither a “bottom fisher” nor a “bargain hunter.” I know my own advice is frustrating sometimes when I tell people to wait as they see an issue going higher and I have not suggested buying. You want to make sure the upward momentum is there before you make your major commitment of funds.

When should you take profits? Livermore did this: he liked taking one-half of his profit at a predetermined level and then let the balance of the position run. Once a stock has reached a resistance point, sell shares equal to some or all of your profit and leave your original investment amount in place. Or take your original investment out of the market and let the profit amount run.

Perhaps, most interesting to the average stock-market player is that Livermore believed that often the best issues were those that were making new historic highs. Our conventional wisdom tells us that a stock at the high is not a bargain. Yet, Livermore understood that when a trader buys at a new high, for that moment in time, the only holders are happy holders. Cloudless skies are above and there are no longer-term investors waiting to sell at the high just to break even. Buying at the high should not be discounted as a part of an overall strategy.

The final word on trading strategies perhaps best comes from George Soros: “It doesn’t matter how often you are right or wrong—it only matters how much you make when you are right versus how much you lose when you are wrong.”

PSE stock-market information and technical analysis tools provided by Inc. E-mail comments to

Ayala Corp. sets new take on CSR

Miguel R. Camus
Business Mirror

AYALA Corp., the country’s oldest conglomerate, launched on Wednesday a new initiative which its current stewards believe will secure the company’s place in the future.

Ayala Corp. officials released the company’s first corporate sustainability report, a new measure hinged on the philosophy that businesses can be profitable and responsible at the same time.

“We had CSR [corporate social responsibility] and other initiatives, but now it is becoming a more concrete engagement. We would like to think we are the first in the Philippines doing this and it is also starting globally as well,” said chairman and chief executive officer Jaime Augusto Zobel de Ayala during yesterday’s briefing.

“Just because you are a responsible business entity does not mean you are a disaster from a financial point of view,” he added.

The report covers indicators in the triple bottom line of economic, environmental and social performance using Global Reporting Initiative standards. Units included in the report are units Ayala Land Inc., Bank of the Philippine Islands, Globe Telecom, Manila Water Co. Inc., Integrated Microelectronics Inc., among others.

For his part, vice chairman, president and chief operating officer (COO) Fernando Zobel de Ayala said the sustainability report will widen the company’s standards beyond the profit and loss statement. He added the company is currently working on a way to replicate this measure into its various business units.

On November 10, Ayala Corp. will hold the first Sustainability Summit where about 250 Ayala business heads will gather on how to address urgent sustainability issues such as resource conservation, enabling communities, lowering carbon footprint in production, among others.  

Jaime said CSR activities were previously focused on external effects that the conglomerate did not spend enough time looking inward.

“So by writing reports and looking inwardly, every unit is now made responsible for its own behavior and they know other units are watching,” he said, noting that this method will accelerate the process of fostering a strong sense of social responsibility across its units.

“It’s the beginning of a process…and over a period of 5 or 10 years [we] will have that kind of transformation,” said the company chairman.

This alternative approach to business, however, may limit the future prospects of the firm, a fact not lost on its leaders.

The Ayala COO admitted that there are lengthy discussions on the issue of sustainability and how it affects the business direction of the group.

“You’d be surprised at the amount of debate that takes place as we are study a particular sector to find out what the implications are,” he said, adding this may limit the choices of the Ayala group in terms of businesses it plans to enter.

For his part, Jaime said there is a “98-percent chance that we won’t go into [a certain business] if it doesn’t feel philosophically right.”

“At the end of the day, what has served us well as a group is the reputation of the company and the brand. We need to constantly reinforce that…those will be the tough choices that we make,” noted Fernando.

Meanwhile, the demand for this type of responsible business standard is growing. Citing the company’s experiences, Fernando said employees applying in the firm put a lot of focus on the conglomerate’s social responsibility initiatives.

“Actually, more and more people are joining businesses where they can have an impact. Another one is customers who we know are demanding responsible behavior,” he said.

Overall, officials believe that as the firm maps its course, having a sustainable business may be the way to secure its relevance in the future.

“We feel this will make us a better company and a stronger competitor. The models that are not sustainable I believe are institutions that will not last,” said Jaime.

For UK BPO, Pinoy worker is tops

Alma Anonas-Carpio
Business Mirror

THE Philippines has been selected as the primary voice hub of the United Kingdom-based business-process outsourcing (BPO) firm Northgate Arinso (NGA) because NGA’s clientele are “comfortable with the service from the Philippines.”

“From our perspective, the Philippines has been a very successful venue for our business,” NGA CEO Mike Ettling said at the CEO Forum Wednesday at the Tower Club in Makati City. “The Philippines is the business destination of choice for our voice services because of the high quality of education and English fluency, its affinity with the United States market and service-oriented approach.”

NGA specializes in outsourced human resource (HR) services running on German business software firm SAP’s HR platform. It offers software-as-a-service (SaaS) along with its voice BPO offering. Ettling said NGA’s Philippines-based work force handles “queries from our client companies’ most valuable assets, their people.”

Ettling said the delivery of such services requires only limited scripting, but is “far more complex and
needs more empathy [from our agents] and a more emotive response,” something that he said comes naturally to Filipinos, whom he described as having a “psyche of service.” He also said feedback from NGA clients includes commentary that callers to NGA’s Philippine contact center “feel a much more human touch. Filipinos have a natural customer service mentality.”

He noted that the “work ethic here is just phenomenal. When [typhoon] Ondoy hit, we registered no missed calls despite the heavy impact of that storm on Metro Manila and our personnel. This dedication to the job and the Filipino’s natural warmth triggered generosity from our clients and our employees at other sites.”

NGA is one of the world’s five largest HR software service providers and offers “innovative HR business solutions such as payroll, work force administration, benefits, talent and human capital management” services, such as the euHReka software. This software offers companies extensive control over their HR operations over the Internet, cutting costs for both in-house hardware and software expenses.

According to Ettling, “one in three of the UK work force receives their pay slips using NorthgateArinso HR solutions. Globally, the company has 5,000 employees and holds office in 31 countries, with the Philippines serving as their main Asia-Pacific office. The main office for NGA’s specialized BPO operations is located in Manila because the outsourced functions “work very well with Philippine culture and Filipino work ethic. It works so well that our plans to grow this market are very, very extensive.”

Ettling said his firm has seen “huge potential for success in the Philippines” in the three years it has been operating here, adding that this vision continues to hold true as NGA eyes expansion to higher-value knowledge-process outsourcing (KPO) activities over the next five years. He also projected that, after NGA infuses £1 million (P78.63 million) and moves into its new offices in Ortigas, the company will almost double its Manila work force from 235 to 400 agents by the end of 2010 and “treble that number” in the next five years.

He added that NGA’s revenues in the Asia-Pacific region alone stand at £25 million (P1.96 billion). In Manila, Ettling said that, unlike other BPO offices, NGA’s personnel attrition rate is just 5 percent.

At the forum, attended by the country’s top CEOs, Ettling said NGA seeks to create a reliable and standardized set of HR practices akin to standards set for the information-technology industry by the IT Infrastructure Library, which is a set of concepts and policies used for IT services and management services development and operations.

Besides providing more jobs, Ettling said, NGA’s internationally recognized reputation “allows Filipino workers to make use of state-of-the-art technology and training, improving Filipino skills to global standards.” The firm’s Manila Global Delivery Center, he added, “serves as the smartest choice for multinational companies, given NGA’s best-in-breed facilities, at a more economical cost.”

Manila’s light rail system

The View From Taft
Tristan H. Macapanpan

In the past several months, I have been using the light rail systems in Manila to go to and from work. It was by choice. In the past, I resorted to the trains when I had to go to appointments in locations where traffic and parking are problems. However, commuting to work would be a daily struggle against traffic. Thus, I choose to travel by light rail.

As is my wont, I observed the various aspects of the light rail transport systems from a manager’s perspective. I evaluated the three lines, LRT1, LRT2, and MRT, from three dimensions: customer service, daily operations management, and customer behavior. Customer service was viewed from the way by which the systems cater to their different riding publics. Operations management was evaluated based on how the different organizations ran their daily operations on scheduling and capacity. Customer behavior was observed from the queuing and on-train manners of the train riders.

Customer Service: Two facets of customer service struck me as widely different among the three lines. Only LRT2 has a LED sign posting the approximate arrival of a train. The other lines do not have any regular means of advising passengers of arrivals. LRT1 informs train riders of special runs to accommodate an overflow of passengers at certain stations. Both LRT1 and LRT2 announce any delays, though the announcements come over speaker systems that are barely understandable.

For pregnant women, the elderly, and passengers with small children, LRT1 has allocated half of the front coach, where a security guard ensures that only those who are eligible do get on. The guard also tries to ensure that those who need most to be seated are given priority. All lines give senior citizen discounts, but MRT only gives single-trip vouchers while the other lines extend the discount to stored value cards. The only shortcoming is that it is inconvenient to get those vouchers.

Daily Operations Management: Scheduling and capacity management seem to be the weak link in the MRT line. The line often has to stop allowing entry of passengers due to overcrowding of train platforms. In fact, this has happened twice the past week. I noticed that the MRT only has three coaches in tandem. Given rush-hour demands, this is often not enough; thus the overcrowding of platforms and trains.

Customer Behavior: MRT passengers are the least considerate. There is often a lot of pushing and shoving getting on the train, and incoming riders often do not wait for outgoing passengers to get out before getting on. This behavior is probably brought about by the lack of capacity. This extreme conduct is not evident in the passengers of the other lines, where there is more capacity. There is some shoving, but none of the ill-mannered shoving and elbowing that is done in MRT. In the special section in LRT1, a lot of consideration is given to those in most need of seating. Could this be due to the presence of the senior citizens, who have been schooled in good manners and right conduct?

Management Challenges: The management teams of the light rail systems face two important challenges that need to be addressed if the light rail systems are to succeed as the alternative to the chaotic street-level transportation. These are scheduling and capacity management to respond to the daily demand patterns, and passenger behavior control.

The lines should have enough experience by now to project the different demand patterns throughout the day and the week. With this information, their management teams should be able to schedule and forecast capacity requirements to meet the increasing demand. The MRT, for one, should increase capacity, operating as it does in one of the most heavily traveled corridors. If it can improve its operations, it will increase passenger patronage and reduce the need for the buses that ply the same route.

There must also be some way of organizing the way passengers get on and off the trains. Although the MRT riders are the most undisciplined, passengers in all lines do not observe any queue discipline. The lines can spend more money delineating areas in the platform where passengers can line up. As it is, only the MRT has such spots. However, train doors often are not positioned in front of the designated areas, leading to a breakdown of any semblance of queuing as the passengers have to rush to the doors. Train drivers should learn to try to stop at the designated spots.

Tristan H. Macapanpan is a professor of Operations Management at the Ramon V. del Rosario Sr. Graduate School of Business of De La Salle University. He may be contacted at or

Wednesday, 4 November 2009

Video: One on One Media Interview with Art Bonjoc

Cagayan de Oro
October 29, 2009

President Gloria Macapagal Arroyo continues to bring government services closer to the people of Mindanao especially for the indigenous people.

In a media interview by Art Bonjoc, News Program Director of ABS-CBN in Northern Mindanao, the president stated that her administration is keen in giving during her administration the government has already given 3.6 million hectares of land or close to 800,000 beneficiaries.

Among those discussed during the interview were the step undertaken in awarding ancestral domains, providing financial assistance through the Pantawid sa Pamilyang Pilipino for the indigenous people and other support programs of the government.

Talks on peace also emerged in the discussion as newly appointed Presidential Adviser on the Peace Process Secretary Annabelle Abaya and Ambassador Rafael Seguis, chairman of the governments peace panel revealed to the president resumption of the peace talks with the National Democratic Front (NDF) and with the Moro Islamic Liberation Front (MILF).

President Gloria Macapagal Arroyo's One on One Media Interview with Mr Ritchel Umel

November 3, 2009

President Gloria Macapagal Arroyo's One on One Media Interview with Mr Ritchel Umel, Phil Daily Inquirer & Sunstar CDO Correspondent on Waterless Towns Program Multi Purpose Hall, Brgy Poblacion, Ganassi, Lanao Del Sur

Inauguration of the Banisilan Guiling Alamada Libungan Road
03 November 2009

President Gloria Macapagal Arroyo inaugurated the 2.710km completed section of the Banisilan-Guiling-Alamada-Libungan Road Project in Brgy. Malinao, Banisilan, a far-flung agriculture-based town in the province of Cotabato.

Governor Jesus Sacdalan said, the road network in Banisilan going to Midsayap is now open after eigth years. It cuts the travel time from eight hours to two hours going to the provinces of Lanao del Sur and Bukidnon.

In a short message, President Arroyo congratulated the residents and thanked the local officials for the completion of the project. On the other hand, townfolks were very honored and grateful for the president's visit. President Arroyo was the first president to visit the town.

Meanwhile, the president also awarded P125,000 check each to three beneficiaries under the Self Employment Assistance Kaunlaran Program, Certificate of Turnover for the 40 units of Composting Facility for the province of Cotabato amounting to P14 million under Organic Fertilizer Production Project Region XII, and Certificate of Turnover for the 1,000 mahogany seedlings in support to the tree planting activity of Banisilan.(SNN/RJU)

Video: Visit to Manggahan Floodway and Napindan Spillway

Brgy. Manggahan, Pasig and Brgy. Napindan, Taguig
31 October 2009

Despite strong winds, President Gloria Macapagal Arroyo led the inspection of flood-prone areas in the cities of Pasig and Taguig earlier today.

The president went to Brgy. Manggahan in Pasig and Napindan Spillway in Taguig to check its water levels as typhoon Santi hit the country. She briefly conversed with Brgy. Manggahan Chairman Bobby Bobis about the destruction caused by typhoon Ondoy which flooded their area and addressed concerns on typhoon Santi.

Meanwhile, she also had a talk with a resident of Brgy. Napindan regarding the havoc caused by Ondoy.

Together with the president were Press Secretary Cerge Remonde and Department of Agriculture Secretary Arthur Yap.

Intermission: received in the mail

A man in Kansas decided to write a book about churches around the world. He started by flying to San Francisco, going to a very large church, he began taking photographs and making notes.

He spotted a golden telephone on the vestibule wall and was intrigued with a sign, which read "Calls: $100 a minute". Seeking out the pastor he asked about the phone and the sign. The pastor answered that this golden phone is, in fact, a direct line to heaven and if he pays the price he can talk directly to GOD.

The man thanked the pastor and continued on his way. As he continued to visit churches in Paris, Vienna, Hong Kong, and other cities, he found more phones with the same sign and the same answer from each pastor.

Finally, he arrived in Philippines. Upon entering a church in Manila, the Assumption of the Blessed Virgin Mary Catholic Church, he saw the usual golden telephone. But THIS time, the sign read "Calls: P10.00"

Fascinated, he asked to talk to the priest, "Father, I have been in cities around world and in each church I have found this golden telephone and have been told it is a direct line to Heaven. But in the other churches the cost was $100 a minute. Your sign reads only P10 a call. Why?"

(I love this part.....)

The priest, smiling benignly, replied, "Son, you’re in the Philippines now. You’re in God’s country. It’s a local call."

RCBC profit surges 47% to P2.82 B

Manila Bulletin

Rizal Commercial Banking Corporation recorded a robust 47 percent net income growth in the first nine months of 2009 to P2.82 billion from the P1.92 billion in the same period last year.

The bank said in a disclosure to the Philippine Stock Exchange that its operating income expanded by P1.93 billion to P12.11 billion with net interest income and non-interest income increasing by 19.4 percent and 18.3 percent, respectively.

Net interest income was P1.23 Billion higher than the previous year’s P6.32 billion while non-interest income improved from P3.85 billion to P4.56 billion – primarily due to the strong growth in trading gains.

Excluding gain from sale of an office building booked in 2008, non-interest income growth would have been a more robust 33.4 percent.

The results also reflect a P 739 million increase in provisioning to provide for future contingencies, loan losses and losses from the recent typhoons.

“RCBC adopted strategies meant to prepare itself for a volatile economic environment in 2009. The bank raised an additional P4.2 billion in Tier 2 capital, sustained an aggressive low cost deposit campaign, exercised prudence in its loan approvals and achieved exceptional trading gains by riding the market’s volatility successfully,” said RCBC president Lorenzo V. Tan.

The bank also recently sought to lengthen the maturity profile of its foreign currency books through the issuance to its client base of $98.2 million in 3-year negotiable certificates of deposit.

Tuesday, 3 November 2009

My prosperity index

John Mangun
Outside the Box
Business Mirror

From the “ The largest seizure of contraband cigarettes in the history of the state [Ireland] and possibly in Europe was made yesterday on a ship carrying up to 120 million cigarettes which had left the Philippines for Ireland last month.” Now here is the good part: “The cigarettes are thought to have been produced in the Philippines.”

Who says that our export markets are in trouble? The smugglers probably paid local Filipino “entrepreneurs” close to P1 billion to make these cigarettes; most all European brands not sold here. Further, the ship came under surveillance by European law- enforcement authorities as it left the Philippines, which means that our “entrepreneurs” probably collected a reward for turning in the smugglers to the police.

The reason I mention this smuggling episode is that once again, a global survey of countries has the Philippines only at number 55, dropping three places since last year. It is the Legatum Institute report of the Global Prosperity Index.

According to the report, it defines and measures “prosperity as both wealth and well-being, and finds that the most prosperous nations in the world are not necessarily those that have only a high gross domestic product, but are those that also have happy, healthy and free citizens.”

Fair enough I suppose. Nobody really believes that money can make you happy...except the rich and the poor.

However, one of the sub-indexes is “Entrepreneurship and Innovation” where the Philippines placed 41 because, “Despite low R&D expenditure, the Philippines has the largest proportion of ICT and high-tech exports in the world.” And apparently the best-value “fake” cigarettes that can be smuggled in vast quantities to Europe.

While looking at the Legatum Institute website, I came across a link to something that you have to look at. It is the Legatum Institute “Personal Prosperiscope” at where you can rate yourself as if you were one of the countries in the global survey.

Here is my score: “With a total Prosperiscore of 71 percent, your prosperity in comparison to others is prosperous.” Great news. I am prosperous except for the money part; trust me.

But along with the results is an analysis of what helps me be “prosperous,” the “Prosperity Drivers” and also the “Prosperity Restrainers.”

On the drivers side, I live within five kilometers of the sea. And you have been worrying about all those climate-change fanatics! Obviously, rising sea levels is a good thing. Further, “The climate in your country is relatively favorable.” Take that you global-warming wackos!

More drivers include “Your country’s economy is growing relatively rapidly.” I knew that my economic predictions were right. And “You have an interesting job.” I agree. What could be more interesting than talking to you twice a week?

Yet, my “Prosperity Restraints” were a little disturbing. “You are male” was near the top of the list. I always liked being a man. I would not trade places with any woman. I mean, gentlemen, which one of you would want to be a woman and have to cope up with some guy like you? Yet, according to the survey, being a man is keeping me from being more “prosperous.” I am doomed.

“You consider work to be very important.” Now I am confused. I thought my work was a good thing. And yes, it is important; food on the table and all that.

“Inflation in your country is relatively high.” Now I know something is wrong with the survey. Unless this is a future forecast if the Bangko Sentral does not let the peso appreciate and inflation does get too high.

“You consider politics to be very important.” Obviously these people do not understand the Philippines at all. I am not fond of watching PBA. The only other televised spectator sport in the Philippines is politics. Nobody here takes politics seriously, not even the politicians. But politics is very important in the same way watching Darna and Wowowee is very important.

There is also some advice on how to “enhance your prosperity even more.” “You live very close to a major road, which may be convenient, but moving a little further away would improve your prosperity score.” Also, another hindrance to my prosperity is that “You commute to work.” Of course I commute to work. Doesn’t everyone? That’s why I live close to a major road: to make my commute easier and cheaper. I wonder if the people at Legatum Institute live in the real world where people go to work every day.

Their final advice is to “Think about joining a sports or art club.” OK. I have thought about it. And I have firmly decided that I have no intention of joining either kind of club. But I guess thinking about it makes me more prosperous already.

One final sub-index is “Social Capital,” which measures how well people are developing social networks, where the Philippines ranked 81. We should be No.1. After all there are more Facebook users in the Philippines than in any other country. And as we have recently witnessed, “Almost two-thirds claim to have helped strangers over the past month, the fourth-highest rate, worldwide.”

So what’s our problem? Just like me, “Citizens are not highly integrated into their communities through other group membership with less than 15 percent being members of a sports, environmental or arts organizations.”

At the end, all these surveys are silly and useless. How do I know? South Africa, the murder and the AIDS capital of the world, is ranked higher than the Philippines. But South Africans probably all belong to an art club.

PSE stock-market information and technical-analysis tools were provided by Inc. E-mail comments to

Monday, 2 November 2009

Philippine Government to hire 93,000 workers for P1.77-B infra program

Cai Ordinario
Business Mirror

DUE to uncertainties in the global economy, the government will be hiring more than 93,000 unemployed or underemployed Filipinos for a P1.77-billion roadside maintenance program this year, according to the National Anti-poverty Commission (NAPC),

NAPC Secretary Domingo Panganiban said the Department of Public Works and Highways (DPWH) had already met a considerable portion of its emergency-employment targets, hiring 42,930 workers for various roadside maintenance projects nationwide as of September 30, 2009.

“While experts have noted signs of recovery in the global economy, now is not the time for complacency.

We are still in the thick of what is probably the worst economic slump in modern history,” the NAPC chief said.

The government’s plans call for the employment of some 59,968 roadside maintenance workers in Luzon while 14,120 more laborers are put to work in roadside projects in the Visayas.

Panganiban said that another 19,120 workers will be employed in roadside maintenance projects across the island-region of Mindanao.

The move is line with the development plans of the DPWH and the government’s Economic Resiliency Program.

“The country’s national roads are essential to the strength and stability of the economy, helping to encourage investments and create jobs for a vast number of the Filipino poor,” Panganiban said.

NAPC, which is under the Office of the President, oversees the Comprehensive Livelihood and Emergency Employment Program, launched by the President in October 2008 to address the need for new jobs as a result of the global economic meltdown.

“The workers will see to the maintenance of around 30,000 kilometers of national roads under the Out of School Youth Towards Economic Recovery Program of the DPWH,” Panganiban said.

Philippines’ top BPO firms post $2-B revenues

Business Mirror

THE 29 largest business process outsourcing (BPO) providers in the Philippines, mostly engaged in contact center activities, reported P94.4 billion in combined revenues in 2008, up 21 percent or P16.1 billion from the P78.3 billion they posted in 2007, Catanduanes Rep. Joseph Santiago, chairman of the House information and communications technology committee, disclosed Sunday.

“The Philippines has definitely secured its position as a leading player in the global BPO market, judging from the sustained double-digit revenue growth of the local branches of mostly multinational BPO providers,” Santiago said.

Santiago cited the need to further build up the BPO industry through ample infrastructure support, proper human resource development, sound policy environment, adequate fiscal incentives and effective business development.

He said the P94.4 billion in combined revenues reported by the top 29 BPO providers alone translate to almost $2 billion at the current exchange rate of $1:P47.63. Overseas clients pay BPO firms in dollars.

“What is remarkable about the BPO industry is that it is highly labor-intensive. Since the industry employs a growing number of Filipinos, it also supports an increasing number of families,” Santiago said.

The top 29 BPO providers and their corresponding 2008 revenues are: TeleTech Customer Care Management Philippines Inc. (P8.1 billion); Convergys Philippines Services Corp. (P8 billion); eTelecare Global Solutions Inc. (P7.9 billion); Sykes Asia Inc. (P7.5 billion); Aegis PeopleSupport Inc. (P5.7 billion); ICT Marketing Services Inc. (P4.3 billion);

Telus International Philippines Inc. (P4.2 billion); HSBC Electronic Data Processing Philippines Inc. (P4.1 billion); Sitel Philippines Corp. (P3.7 billion); Telephilippines Inc. (P3.6 billion); Deutsche Knowledge Services Pte. Ltd. (P3.2 billion); IBM Daksh Business Process Services Philippines Inc. (P3.2 billion); IBM Business Services Inc. (P2.9 billion);

Sutherland Global Services Philippines Inc. (P2.5 billion); JP Morgan Chase Bank N.A. Philippine Customer Care Center (P2.4 billion); Dell International Services Philippines Inc. (P2.4 billion); SPI Technologies Inc. (P2.3 billion); Advanced Contact Solutions Inc. (P2.2 billion); ePLDT Inc. (P2.1 billion); APAC Customer Services Inc. (P2.1 billion);

Cyber City Teleservices Philippines Inc. (P1.8 billion); Sitel Customer Care Philippines Inc. (P1.8 billion); Parlance Systems Inc. (P1.7 billion); ePerformax Contact Centers Corp. (P1.6 billion); Synnex-Concentrix Corp. (P1.4 billion); West Contact Services Inc. (P1.2 billion); Vision-X Philippines Inc. (P1.1 billion); Genpact Services LLC (P1 billion); and ePLDT Ventus Inc. (P1 billion).

The 2008 revenues of the local units of the following large BPO providers were not readily available: Accenture Ltd., Affiliated Computer Services Inc., Citigroup Business Process Solutions Pte. Ltd., INFONXX Philippines Inc., Hinduja TMT Ltd., and Vocativ Systems Inc.

Santiago pointed out that the country has more than 400 other BPO providers that generate annual revenues of anywhere from a few million pesos to just under P1 billion.

BSP sees higher growth in 3rd quarter

BPO seen to grow 15-20% this year
Manila Bulletin

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said they expect economic growth in the third quarter is possibly higher than projected although they also expect the fourth quarter gross domestic product (GDP) growth to be slower due to the effects of the typhoons.

However, inflation is also seen to rise in the next two quarters because of higher prices of commodities such as rice and oil and mainly due to the high base the rates will be coming from year-on-year, Guinigundo said.

“The economy likely grew at a faster pace in the third quarter but could take a hit in the next quarter due to extreme weather disturbances that caused the death of hundreds and inflicted damages worth at least P31 billion,” Guinigundo said.

He explained that the growth drivers in the third quarter are remittances, exports, the business process outsourcing industry and investments.

“Remittances will remain to be a major driver. We saw how it continues to be robust, boosting consumption expenditure. We also saw some recovery in exports,” he added. The business process outsourcing industry is also expected to remain strong, growing by 15 to 20 percent for this year. “(BPOs) will provide employment and support consumption spending,” Guinigundo said.

The BSP, the main agent for inflation targeting, said the inflation outlook and expectations are relatively well anchored in the next two years and that it will provide it with policy flexibility. For 2009 and 2010, the central bank sees inflation falling in the lower end of its target.

“The main story is that inflation has continued to decline, averaging 0.3 percent from 3.2 percent in the previous quarter, largely reflecting base effects from significant increases in global commodity prices recorded during the same period last year,” Guinigundo said.

“The BSP believes that prevailing monetary settings are appropriately calibrated to the inflation outlook,” he added. “At the same time, it maintains its resolve to keep monetary conditions conducive to credit demand and investment activity. Nonetheless, the BSP stands ready to calibrate monetary settings depending on how the balance of risks surrounding growth and inflation prospects will evolve.”

Remittances continue to drive RP growth in next 7 years

Manila Bulletin

Remittances from Overseas Filipino Workers will continue to drive Philippine economic growth over the next 7 years at least, Development Bank of the Philippines (DBP) President and CEO Reynaldo G. David told the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) CEO Forum the other day at the Dusit Thani Hotel.

“In the future, migrant workers will be concentrated in the Middle East, Asia and countries whose immigration laws are very stringent. Sea-based workers will continue to grow,” he projected. However, “[r]emittances will not be the Philippines saving strength forever. As a major development financial institution, DBP is in a constant quest for long-term solutions so our migrant workers can come home where they belong.”

To date, cash transfers from 9 million Filipinos abroad account for 10 percent of the country’s economic output. Although many OFWs lost their jobs, remittances over the past 8 months totaled $11.3 billion, up 3.6% year-on-year, mostly from Filipinos in the United States, Canada, Saudi Arabia, United Arab Emirates, Japan, Malaysia, United Kingdom and Italy.

Already, the Bangko Sentral ng Pilipinas (BSP) revised its 2009 forecast, saying remittances will grow 4 percent, on the average, to $17.1 billion from last year’s $16.4 billion, indicating that the global turmoil had an insignificant bearing on the amount of money OFWs send in.

“Remittances may even grow faster in the next two months of the year as our mostly Christians workers send in more money for the Christmas season,” according to David. With the global economy on its way to recovery, remittances may even surge in the months ahead and DBP sees a more favorable outlook for remittances through end-2009.

While the last two typhoons took its toll on economic growth, strong overseas remittances continue to buoy up the economy. In fact, “We believe these natural disasters triggered incremental remittances. We are just awaiting the official remittance figures for September and October,” the DBP President noted.