A8
Banking&Finance
Thursday, October 19, 2017 • Editor: Jun B. Vallecera
BusinessMirror
www.businessmirror.com.ph
8-month public-sector spending up 9.8%
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ata on national government disbursements indicate spending in August alone grew by 13.9 percent and helped push spending from January to August by 9.8 percent. The growth in national government spending was seen to boost the government’s socioeconomic agenda and promote the swift delivery of public services. State spending totaled P201.6 billion in August, up from P177 billion last year. The growth of capital outlay paced the robust spending in August as it rose by 22.6 percent to reach P51.6 billion. Meanwhile, current operating expenditures increased by 10.3 percent to reach P149.9 billion. The year-to-date figures were to
remain firm as spending from January to August reached P1.78 trillion, a 9.8-percent expansion compared to the same period in 2016. This was driven by the expansion of capital outlays and current operating expenditures, which posted growth rates of 11.5 percent and 9.6 percent, respectively. Spending in August had a significant
Lost and then found, miracles happen
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y article today will be a bit different than usual, but I will still relate it somehow to associations. I am still in Washington, D.C., as of this writing, a day before two scheduled meetings. Both are meetings for two associations that I am involved with: the World Federation of Development Financing Institutions, where I am currently the secretary-general; and the Philippine Council of Associations and Association Executives (PCAAE), where I am the CEO and founder. The story I am going to tell you, however, is about my travel experience from Manila to Washington, D.C. As you know, travel time from the Philippines to the United States would normally take 24 hours, depending on which route you take. However, due to flight delays, it took me 30 hours to finally reach D.C. Along the course of my long trip, I lost two things: my Saint Mary medallion at the airport security check at the Ninoy Aquino International Airport 3 and my mobile phone in the shuttle van from Reagan Airport to my D.C. hotel. You could imagine how hard I prayed that I recover back these two vital possessions. The medallion was a gift from an association volunteer-trainee who said it is miraculous, while the mobile phone, as everyone nowadays knows, is already “part of our body.” To make the long story short, the good news is that I found them both, fortuitously. The shuttle company traced the van driver who returned my cell phone to me at the hotel. Coming back to my room happy that I got my phone back, lo and behold, I then found my medallion while unpacking my backpack. Miracles indeed do happen! So, while thinking of what to write for this column, it struck me to relate the two important personal things that I lost and then found to what associations deal with everyday. I likened the medallion and the mobile phone to faith in purpose and messaging of an association, respectively.
Association World Octavio Peralta Many associations today tend to deviate from their original purpose or reason for being. Most often, due to financial and human-resource pressures, associations undertake programs and activities that do not conform nor enhance their missions. A research conducted by the American Society of Association Executives called, The 7 Measures of Success: What Remarkable Associations Do That Others Don’t, lists that commitment to purpose is one of the seven attributes that makes an association successful. You can go back to my column of October 16, 2016, entitled “Emulating Remarkable Associations.” I mentioned in my October 12, column, entitled “Association Pain Points,” that associations, more often than not, are neglectful of communicating their work and advocacy to their constituencies. This, thus, hampers their ability to flourish and sustain their mission. One last side story that really made my day the following morning while having lunch in a Chinese fast-food chain here in D.C. The fortune cookie I got with my meal had a “prophecy piece of paper” that read: “There will always be delightful mysteries in your life.” Amen to that! The column contributor, Octavio Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and the CEO and founder of the PCAAE. The PCAAE is holding the Associations Summit 5 and the “Ang Susi” Awards 2017 on November 22 and 23 at the Philippine International Convention Center. E-mail inquiries@adfiap.org for more details.
Case clippings
By Justice S J Ranada Jr.
EMINENT DOMAIN–payment of interests The owner’s loss is not only his property but also its income-generating potential. Thus, when property is taken, full compensation for its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. Thus, the rationale for imposing the interest is to compensate the landowner for the income he would have made had he been compensated at the time of taking. Transmission v. Oroville 01 Aug. 2017
GR 223366 Mendoza, J
boost from infrastructure and other capital expenditures as it surged by 18.1 percent, owing largely to the infrastructure projects of the Department of Public Works and Highways (DSWD) (road-improvement works; repair and rehabilitation, including flood-control projects; construction and improvement of pumping stations, dike and drainage systems, etc.) and capital outlay projects of the Department of Education (DepEd) (repair and rehabilitation of school facilities) and the Department of Health (DOH) (land outlays for health facilities and purchase of hospital equipment). Maintenance expenditures also grew by 18.4 percent on account of the operating requirements of DepEd schools and DOH hospitals nationwide, as well as the implementation of social protection programs by the DSWD. On the other hand, personnel services increased by 8.7 percent due to the higher base pay of civilian government employees by virtue of the second tranche implementation of Executive Order 201 s. 2016, and the increase in allowances of military and uniformed personnel. Some P426.7 billion of the P3.35-
trillion obligation program for fiscal year 2017 is still available for release to the line agencies for the remaining four months of the year. Of this amount, P236.8 bil lion refers to a l locations lodged in Special Purpose Funds. Most, if not all, of this amount is expected to be released before the end of the year to fulfill budgetary requirements in government subsidies, the release of performance-based bonus, among other purposes. Looking ahead, government spending were to remain robust in the near term. “Disbursements will continue to be buoyed by higher spending requirements of line agencies in the succeeding months given the acceleration of program or project implementation as we approach the year-end, especially so, with the one-year validity of the 2017 appropriations,” according to Budget Secretary Benjamin E. Diokno. “We are optimistic that we will approach our full-year target of P2.909 trillion and will continue to exert our best efforts to reach our goals. This administration is committed to address the persistent underspending issues, which have led to the slow delivery of public services in the past,” he added.
Seven-year T-bond rate barely moved
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he Bureau of the Treasury (BTr) sold all P15 billion in Treasury bonds (Tbonds) at auction on Wednesday when the seven-year rate moved lower by 0.5 basis points. According to National Treasurer Rosalia V. de Leon, the seven-year rate barely moved and this pleased the auction committee given the very liquid tone of the investing market. “Again, I think this shows that [liquidity] is still abundant, [that] they prefer to stay on the government securities [GS] side. Also, [they’re adopting a] wait and see [attitude)] on the next action of the Monetary Board in November,” de Leon told financial reporters. The auction received almost twice the amount in tenders amounting to P29.023 billion. A total P14.023 billion was rejected. As a result, the seven-year rate now stands at 4.390 percent for the reissued T-bonds that showed a slight 0.5 basis point increase from the previous rate of 4.395 percent. “We are very pleased with the results of the auction given the very strong subscription that we see, almost twice at P29 billion. Then, of course, the rate is lower than the coupon of 4.5 [percent],” she added. Rea Cu
The third age of entrepreneurship
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ome people see their 50s as a time to start slowing down, maybe cutting back their working hours. Others see it as the right time to take on a new challenge and start their own business. In fact, w ith many people enjoying good health and an active lifestyle far beyond traditional retirement age, it is an increasingly popular choice. In the United States, for example, an estimated one-quarter of all starts-ups are headed by people between the ages of 55 and 64, according to the2015 Kauffman Index, a nationwide study into business activity. The aspirations and attitudes of older entrepreneurs are often subtly different from those of younger entrepreneurs. For example:
flexibility over their hours and opportunities to work from home. Others are in it for the love of what they do, working on tasks they enjoy in a sector they feel passionate about. n They have a different style of
leadership
n Business owners over 50 value in-
Older business owners tend to be less concerned about raising their personal profile. Millennial entrepreneurs are several times more likely than over-50s to say that they started their business to become influential, according to our research. The fact that older entrepreneurs don’t need to prove themselves may be a strength. Secure in themselves, they recognize talent in others without feeling threatened by it. They tend to be comfortable delegating responsibility and building high-performing teams.
The most common reason older entrepreneurs give for starting their business is to be their own boss, according to research from HSBC Private Bank. Our Essence of Enterprise 2017 report (see box) suggests that some are looking to create a role that fits around their lifestyle, with
n They have enduring ambitions But it would be wrong to think older entrepreneurs want to take life easy. The majority who responded to our survey are focused on the future, on building their business and achieving their goals. Some c hoose to compete in cut-
dependence and flexibility above all
ting-edge, high-growth sectors. One in 10 su r veyed r u ns a st a r t-up in the technology sector. n Their experience is valuable Older entrepreneurs have a wealth of experience and wisdom, as well as the bumps and bruises accumulated over a career. While a few are starting out as entrepreneurs for the first time, many have set up and sold successful businesses in the past. They come equipped with a set of contacts that their younger counterparts would envy. If they need to raise finance, find partners or reach new markets, they know who to talk to. Over the next decade. I think it’s likely that we will see more and more people choose to become entrepreneurs later in life. Not everyone who tries will succeed, but those who do will be creating jobs and driving growth at the same time as achieving their ambitions. That will be hugely rewarding for them, and good news for the wider economy. Charlie Hoffman is Managing Director, HSBC Private Banking, London. He has more than 20 years’ experience working with business owners and their families.
MWSS cites Maynilad for enhanced water services
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tressing that prov iding sustainable water and efficient services to Metro Manila residents is a shared responsibility among stakeholders, Met ropol it a n Water work s and Sewerage System (MWSS) Administrator Rey naldo V. Velasco lauded Maynilad Water Services Inc. for its financial turnaround after 10 years of reprivatization in 2007. C it i n g a re p o r t f r o m M ay n i l a d President Ramoncito S. Fernandez at the recent First Korea Water International Water Week where Velasco shared with two concessionaires, along w ith Manila Water President Ferdinand M. de la Cruz, the MWSS chief said the overall efforts of service and ef f ic ienc y le ve l s of May n i l ad h ave dramatically improved. “Our customer base grew by 94 percent from about 678,000 in 2006 to over 1.3 million in 2016, covering 94 percent of our service area,” Fernandez said. “From 32 percent, our customers with 24-hour water supply increased to 98 percent. Those who receive their supply at an average pressure of 7 pound per square also increased from 45 percent to 100 percent. We have also brought down our average non revenue water level from 68 percent in 2006 to 29.9 percent by the end of last year,” Fernandez said in a well-applauded speech at the Korea conference. Fernandez added managing the West
concession in Metro Manila has been a challenge, notably from 1997 to 2006 when Maynilad was in bad shape that its previous private owners could not sustain operations when it suffered huge losses following the 1998 Asian financial crisis. When the concession was reprivatized in 2007, the new Maynilad owners faced the task of reviving a financially crippled company. “That was 10 years ago. Since then, Maynilad was able to swiftly get out of rehabilitation and implement a massive capital-expenditure program of P65.2 billion, or approximately $1.5 billion, at historical exchange rates,” Fernandez said. He also added what helped the turnaround was the water firm’s contin-
ued faith in the MWSS public-private partnership, despite the failure of its initial privatization. He said the men and women of Maynilad who persisted through its turbulent corporate histor y proved their strong dedication to public service. Fernandez said Maynilad is setting its sights on expanding to other areas of the Philippines, as there are currently some 15 million Filipinos who are still without access to water. “We want to replicate our success in other areas so that more people can enjoy improved water supply and sanitation,” he said. Fernandez added the partnership with the MWSS has benefited millions of Filipinos. “Our services have spurred economic activity, while our investments have generated thousands of jobs. More than a business, we see Maynilad as a vehicle for nation building. Because, by partnering with the government, we can use our resources to uplift the lives of our countrymen,” he said.