Opinion BusinessMirror
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Fundamentals and expectations
Friday, October 14, 2016 A11
Unwanted prayers Tito Genova Valiente
Alvin P. Ang
EAGLE WATCH
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fellow columnist, Henry Ong, responded to a question in his column (Money Matters, PDI, October 12, 2016) on the President and the stock market. I would like to summarize his points before giving my view. He recognized that political noises affect the market, but not necessarily in a direct manner. He points out the people invests in the stock market based on expectations—“that share prices will increase in the long term” as business expands. However, expectations are affected by uncertainties. These uncertainties lead to what is known as equity risk premium. He went on to explain that equity, risk premium is composed of political risk, capital risk and impact risk. Political risk refers to government actions. Capital risk refers to the business environment beyond governance. Impact risk refers to business implications due to changes in policy. Henry summarizes that political risk outweighs the other two when the economy is weak.
I tend to agree with Henry that the market is facing various kinds of risks at the moment. As of this writing, the Philippine Stock Exchange index (PSEi) is currently down 1.5 percent. This is happening amid the latest round of pronouncements of the President surrounding foreign policy. Is political risk weighing down on the market? As Henry pointed out, the Philippine economy is currently at its strongest point in decades. The fundamentals or foundations of the economy through growth, employment and prices are reflecting better figures. GDP growth will likely remain above 6 percent this year and next. Unemployment is at its lowest in decades, at 6 percent, and inflation and interest rates also reflecting decadeslow figures. The budget deficit is manageable at below 2 percent of GDP, while the current-account surplus is 2.5 percent of GDP and savingsto-GDP ratio remains above 20 percent. Thus, fundamentally, there is momentum for growth to continue. Besides, the government has already committed to sustain this by continuing the macroeconomic policies in the last six years and ensuring public spending by increasing the infrastructure budget to 5 percent of GDP. Therefore, it is not political risk that is challenging the market. So where is the weakness coming from? Two weeks ago we wrote that the PSEi is one of the most expensive in Asia at its prices then of about 22x Price-earnings ratio. This is way above its average of 16.5x. The market is expensive to begin with. Second, compared to its regional peers, the PSEi at 7,400 actually is not the worst performer in Southeast Asia for the year. Compared to a year ago, it is still up 5.8 percent. This is much better than Thailand’s 1.4 percent and Malaysia’s -2.5 percent. Indonesia and Vietnam have much higher returns of 16.2 percent and 15.8 percent, respectively. Third, the capital risk that Henry was talking about has been taking a significant impact on the market. In here, there are a number of factors at play. The first one is that the US
Fed may no longer delay increasing interest rates by another 25 to 50 basis points by December. According to Bloomberg, a new ruling by the US Securities and Exchange Commission requires that prime money-market funds must have enough liquidity buffers. These funds are short-term source of funding among US banks and firms. With this ruling, it will be costly to keep buffers as these cannot earn, and so funds are moving to US Treasuries. This has already increased interbank borrowing rates in the US. This might be causing funds to move back to the US in anticipation of the full implementation of the ruling this October 14. Another factor is the rising oil prices, which breached $50 per barrel after hitting lows of close to $20 early this year. Higher oil prices could push inflation and interest rates higher. The combination of these external factors, indeed, is affecting the local market today. Politics seem to be more of a contributory rather than the main factor for its weakness. Movement of funds to the US and oil-price hikes will continue to be drags to the regional markets. The Philippine market is no excuse. The external perception has increased the equity risk premium requiring listed firms to perform better in the next years. Government is also required to factor in external events in improving and sustaining the fundamentals. Much of the fundamental strength of the country have been generated by foreign funds through overseas Filipino workers remittances, business-process outsourcing and tourism receipts. The contribution of foreign direct investments is increasing, but is lower compared to other Asean countries. Thus, the domestic economy must be the main engine of growth. Lowering income taxes and increasing government spending is the main approach to sustain the fundamentals. Their full effect will take time to be felt. Thus, in this environment, it is better to lengthen the perspective from short to long term, and from focusing on expectations to fundamentals.
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, Lord, O Spirit of the Land, you taught us to pray. But are your prayers necessary? In the tale of the two tramps, Estragon and Vladimir, you were called the God who does not hear, the God who does not speak. But I do not believe in them and their view of the absurdity of life. Life is too short to be absurd, but it is also too short to be sweet. I believe you do listen and you do speak but, as with any elements of the universe, you count on what is urgent and importunate. Not all sorrows deserve your glorious scrutiny. Besides, there’s the Judgment Day. Do you promise that the ground will break open and in the yawning chasm all corrupt officials will be swallowed? Somewhere in your many old books, you said yes. There is no need for these bad people to be scared sh_tless now. We want them the surprise of their life. What happens to unanswered prayers? They are not said, because they are not wanted. I recall you gave us the arts with which we cope with the vagaries and impulses of life. Indeed, why pray for the world to come to terms with the multitude of races, when there are the sweet moanings of Billie Holiday singing of the strange fruit, of a dear brother hanged by someone who calls himself a brother, as well, just because of a difference in pigmentation. When homes are robbed and young women are raped, then we
do not need to pray. There is Sydney Bechet (I believe you created him, as well) with his Petite Fleur. I have hidden/Better than anywhere else/In the garden of my heart/A little flower. When all women are mutilated and mangled by men’s words and actions, we have them in our memories in the jardin de mon coeur. The heart, after all, is the keeper of prayers. W hy pray when t hey a re nwanted? Lord, Spirit of the Land, you listen to poems. They are prayers, more beautiful than any of the prayers abounding.
Shepherds and leaders Siegfred Bueno Mison, Esq.
THE PATRIOT
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uring the presentation of a very comprehensive employee-engagement survey in our company, the presenter emphasized that most successful companies are customercentric to the point of “spoiling” them to maximize satisfaction. He said companies generally strive to satisfy their customers to boost sales, generate revenue and improve customer loyalty, among others. I then recalled what Virgin Airlines owner Sir Richard Branson once said, “If you look after your staff, they will look after your customers. It’s that simple.” So I had to ask the presenter, “Given budgetary constraints, which should the company prioritize, its customers or its employees?” I believe a leader must have a heart moved with compassion for his flock. He must learn to put the welfare of his flock first over his own. He must seek what is best for his people and not just for himself. In the words of US Gen. George S. Patton Jr., “The soldier is the Army. No army is better than its soldiers.” I still say that no matter how much money we have, no matter the state of the art technology we put in place, no matter how beautiful our buildings will look like, the success or failure of any organization will depend on the people who compose the organization. As it were in my former organizations, the Philippine Army, Malcolm Law, University of the East and the Bureau of Immigration (BI), as it is in my current organization, Philippine Airlines, its people should
be considered as its greatest asset. When I was in the Army, we submitted a Daily Operations Report (DOR) to higher headquarters to indicate the disposition of troops, intelligence gathered, if any, status of supplies, etc. But, perhaps, the last and most important part of this DOR is the status of morale of our troops. Morale dictates the level of energy and enthusiasm of a group. A work force with low morale will be lethargic, complacent and, worse, disloyal. But a work force with high morale will be confident, innovative and, most of all, loyal to the organization it serves. President Duterte is a naturally gifted morale booster. He has visited quite a number of police and military installations, the most that any Philippine President has done in
When people are disappearing faster than the forests, then listen to the “Epitaph” by Juan Gelman: “A bird once lived in me/A flower traveled in my blood/My heart was once a violin.” Then go with the poet as he goes further with his last words: “Here lies a bird/Here lies a flower/Here lies a violin.” Then there is Saint Augustine when arrogance and hubris flood the land. He once said: “Pride makes devils out of angels; humility makes angels out of men.” That is, by God, a prayer worth a thousand votive candle. No need to pray to Augustine. No need to summon the saints when we feel we are confronted by the Devil himself, in the form of massively popular authorities. Some saints believe no prayers
are left unanswered. Even Truman Capote believed in that, perhaps, to the terror of his beautiful friends. But I firmly believe in unwanted prayers. The absence of God notwithstanding, the selection of saints a near anomaly, prayers are not always needed and thus, prayers, deep thoughts into the soul...are never answered. At night, though, before you sleep, when you step out and gaze at the stars plastered dead on the heavens, when you feel there are less of them than the number of men, women and children killed each day, then I urge you to pray, for that is a prayer most dreadfully, most fuc _ly wanted.
his or her first 100 days in office. His mere appearance in these camps has boosted the morale of the police and the military. Of course, it helps when combat pay and the combat incentive pay are also significantly raised for the first time in years! In the BI, as in most government agencies, personnel morale is generally boosted whenever some personnel are given awards, recognition and incentives. What was unique in the BI, however, can be found in three areas. First, dependents of BI employees, for the first time ever, could now avail themselves of scholarship grants in more than 20 participating schools nationwide. Much credit goes to Atty. Cris Villalobos, who conceptualized this Handog Edukasyon program in 2015 to help employees put their children (and even siblings) to good schools. Second, a Collective Negotiating Agreement (CNA) was signed, where employees were given a CNA incentive in the amount of P24,000 per employee and the employees’ association were given greater participation in policy-making. Credit goes to Atty. Greg Sadiasa, the president of Buklod, and Atty. Norman Tansingco. Third, and perhaps the most significant morale booster, is a Merit Selection Plan (MSP), where people were hired and promoted, principally if not exclusively, on merit. Gone were the days when a phone call or a letter endorsement from an influential person was the only ticket for an entry to the bureau. Approved by the Civil Service Commission, the proper implementation of the MSP resulted in a work force coming from an evenly distributed
social and geographical cross section of society and universities, more than 10 percent of whom either graduated with Latin honors or some academic distinctions. I think by having a fair and balanced approach in treating your employees, they will have higher morale to take care of your customers. By boosting the morale of the police and the soldier (as well as other government employees), President Duterte seems confident that the Philippine National Police and the Armed Forces of the Philippines will take care of the Filipino people. In the words of Sir Thomas More: “Why do you suppose they made you king in the first place?’ I ask him. ‘Not for your benefit, but for theirs.’ They meant you to devote your energies to making their lives more comfortable, and protecting them from injustice. So your job is to see that they’re all right, not that you are—just as a shepherd’s job, strictly speaking, is to feed his sheep, not himself.” We need shepherds, not kings, particularly in government. So, should companies focus their budgets on projects related to improving customer satisfaction or on programs related to employee welfare? So, should our government focus its efforts on attracting “customers”, as in investors, or prioritize projects, which will improve the lives of public servants and of the Filipino people? Balancing priorities is a skill not taught in school. Judging from his recent actions, President Duterte appears to know his priorities.
E-mail: titovaliente@yahoo.com.
For questions and comments, e-mail me at sbmison@gmail.com.
Hearts filled with love as ICanServe celebrates journeys of breast-cancer survival Ailene Co
Women Stepping UP
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his October, be the “breast friend” to the countless number of women who have fought and survived breast cancer. According to the Philippine Society of Medical Oncology, the Philippines has the highest incidence rate of breast cancer in Asia and is among the top 10 countries in the world with reported cases of the disease. Accordingly, it is estimated that one out of every 13 Filipino women is expected to develop breast cancer in her lifetime.
Despite these statistical figures, many people are still not seeking the treatment they need, nor are they aware of the benefits of early detection. This is what ICanServe hopes to address. Since it was established in 1999, the ICanServe Foundation has become one of the biggest and most influential foundations for breast cancer in the Philippines. A community of passionate cancer survivors, ICanServe has made its mission to help and support women with breast cancer. It advocates early detection breast exams and initiates community-based programs that extend medical support and empower women through education and information.
Countless breast-cancer survivors and their breast friends have partnered with the ICanServe Foundation to talk about their own journeys of triumph and survival. They speak about their experiences, because they hope to inspire more women to get themselves checked. Most important, should these women find themselves diagnosed with breast cancer, they see themselves as empowered women with inconceivable strength. There is beauty in hope. There is beauty in faith. For Frances Yu, through her own journey of survival, she has learned the blessing of suffering: “You cannot avoid suffering—it’s your choice
to suffer with God, or without God. Suffering shouldn’t be wasted. It’s something you can elevate, and transform into something transcendent. You can offer it up, and use it as a stepping stone to become a better person.” Amanda Luym and breast friend Cacay Moras-Server are proud to join the conversation in any way. “During treatment so much gets taken away from you: your physicality, your ability to even function properly, to move, your body won’t feel like your own. Try to live as well as you can, for as long as you can. Win. I saw cancer as a battle. And I won,” shares Amanda, encouraging other
women to fight and not lose hope. In the past decades, the ICanServe Foundation has made great progress in spreading awareness, but, indeed, there’s more to be done. Through the Fashion Can Serve fundraising event, ICanServe hopes to raise support for its flagship program, Ating Dibdibin, which was first established in 2007. Ailene Co is a member of Business and Professional Women (BPW) Makati, a member of BPW International and an organization aligned with the UN Women Empowerment Principles. She is a seasoned marketing professional with close to two decades of experience in PR and marketing. She is also the cofounder of online magazine, www. trend-hotspot.com.