(Having the two numbers interchanged would also be fine by me hahaha)
Welcome to a fresh new Guerilla Investing!
I hope this more streamlined look and well arranged labels will help my readers sift through the glut of posts I've made since the start of this blog.
I was heartened by a blog milestone - 5000 visitors since I started blogging. Regardless if it's 5000 unique visitors or not, I hope in my own little way I was able to impart some knowledge on your road to financial independence.
Coupled with my personal bullishness on my blog is the bullishness of expectations of the new administration. To quote the news piece -
"According to ING’s quarterly Investor Dashboard Survey, the country experienced an 18-percentage-point increase in investor sentiment to 157 in the second quarter of 2010 from 139 in the first quarter."
Well recently, our stock market hit a new high breaking the 3,400 level after four tries to hit this level if I'm not mistaken. Given this, I would think that from an amateur technical analyst's understanding, we are going to hit high notes by the end of the year. This is not to say that the road ahead is full of roses.
Against this backdrop is that the BSP is keeping interest rates at lows due to uncertainties as well as the manageable inflation rate. This means that credit is cheap and it should help businesses expand. When businesses expand, then it can create jobs and potentially enjoy higher revenues. Bodes well for the stock market. This also bodes well for the fixed income market (bonds) because interest rate is the same.
Of course, contrarian thinkers will always say that this may have already been "priced in". If you don't already know, stock prices are always ahead of actual performance. This means that the price may have rose already with the anticipation of a news, a new project, a new high in revenues, etc. such that when the announcement is made to the press, the stock price doesn't move anymore.
In fact, from personal experience, it shows that - at least locally - when profits are announced, stock prices suddenly drop. This is why there's this oft quoted cliche, "Buy the rumor, sell the news".
So far our stock market has been insulated from what is happening worldwide. The DOW recently fell triple digits (again) so I wonder if we'll keep on being insulated by next week.
But the following data should give us confidence the the Philippine economy is still above water.
Remittances reached record level of $1.58B in May
In this article, noteworthy is this fact -
"The main sources of remittances in May were the United States, Canada, Saudi Arabia, Japan, the United Kingdom, Singapore, UAE and Italy. Combined inflows from these countries accounted for 81.5 percent of total for the five months to May."
With the continued influx of remittances and strong consumer confidence -
Auto sales jump 37% in 1st half of 2010
Salient points -
Commercial vehicle sales went up 39.8% over the past six months comparative period while passenger sales went up 32.2%. This to me is good news because it means both businesses and consumers are spending.
In an old post, I've said that key indicators for the lay investor include OFW remittances and car sales. Screen out the rosy news you read and focus on these hard numbers. If the stock market doesn't perform at par with these indicators, it could be a chance for you to buy stocks at their lows.
However, now that the index is at 3,400, I anticipate the market to move sideways. It can go higher but I'd rather it going sideways so there's a strong base at 3,400 before we continue hiking. Most of the blue chips have risen so it could be the second liner's chance to shine. Most of the second liner stocks are those not part of the PSE index that have recorded blowout revenues.
Notwithstanding all these positive news of late, the trouble with the local economy is the anticipated huge budget deficit. Investors both foreign and local will be looking to P Noy's first SONA with high hopes. Wang wangs are symbolic but we also need strong economic programs that promote investor confidence and generate jobs.
Showing posts with label Guerilla Investing on the Philippine Economy. Show all posts
Showing posts with label Guerilla Investing on the Philippine Economy. Show all posts
Saturday, July 17, 2010
Saturday, March 13, 2010
Childhood Allowance: Inflation Gauge
Economics, along with Chemistry, Physics, and other Science and Math subjects are one of the most sought after subjects in the country if you want to have a fit of headache or want to sleep in class.
I've only met a few people in my life who can honestly and sincerely say that they rather enjoyed these classes. I've met fewer teachers who made these subjects interesting. Most of them just talked to the blackboard and lifted materials from the textbook.
Thankfully, there's the Internet and there are loads of books that explain these topics more interestingly. Perhaps not listening to your teacher gave birth to the book industry's "guide for dummies" series of books. Watching CNBC and Bloomberg also helps. So it's not entirely true that the television is an idiot box.
Recently, I had my hair cut and I was given a kiddie magazine to read. I suppose it was randomly given to me and it did not mean anything. In a short article contained in the magazine, there was a topic on the amount of allowance kids these days get, compared to what their parents were getting in the past.
That got me thinking.
Kids these days supposedly get about 150-250 a day. It sounds a lot to someone (like me) who received between 50-100 during my time. My parents had even "less", and most of the times, none, during their younger days.
At 250 a day, that's about 5,000 in a month. Even if we use 150, that translates to 3,000 a month. So assuming you have a child that's in high school already and your salary is about 25,000 - 30,000 (gross) a month, I'm amazed we Filipinos are still able to survive. Imagine, you still have to pay the tuition, your rent, utilities, etc. Frankly, I'm surprised some even have anything left to invest with.
If you don't read (or ignore) business news and skip on important data like inflation, just look at the allowance example. Your 50 pesos then is worth a third today (if your allowance is 150). Therefore, put another way, what you could buy for 50 pesos then, you have to pay 3x more today. Of course, this is just a simple straight computation. You can still purchase decent meals at about 50.00.
So how much of an increase in allowance (or inflation) was that? Assuming the climb in minimum allowance from 50-150 took about 15 years, that's about 13% annually. That's much higher than the inflation rate published by the government. If I'm not mistaken the average inflation rate is about 6-8% annually.
Of course, this simple computation does not take into account possible increases in spending power of Filipinos. For all we know, the increase in allowance means that parents today earn more than their parents a generation before.
So, while foreigners still look at the Philippines as a Third World, or, a Developing Country, in my opinion there is quite a substantial middle class in the country. However, the middle class are those easily wiped out during economic crises. They are also one of those who stand to benefit right away in an improving economy.
What's the relevance of inflation? As you can see, whatever you spend today, you will likely pay more for the same services a few years from now. Given this (frightening) set of numbers, I wouldn't be surprised to see children receiving 500 a day in my lifetime.
You also have to think about yourself. If you want to retire respectably and be able to afford future expensive healthcare expenses, then you better start saving... and investing for the future.
Going back, as you can see, you don't have to have an economics degree or any degree for that matter to know about critical information that directly affects your money.
Learn how to use your common sense. Unfortunately, common sense is not taught in school. It's taught by your parents and brought about by the experiences you go through. Too often people tend to stick to textbook style thinking and problem solving, failing to see that problems are simple if you just use a little bit of common sense.
So if you use your common sense, then you'd know that saving now is better than saving later. Further to this, it's better to invest now, than saving now. Ciao for now.
I've only met a few people in my life who can honestly and sincerely say that they rather enjoyed these classes. I've met fewer teachers who made these subjects interesting. Most of them just talked to the blackboard and lifted materials from the textbook.
Thankfully, there's the Internet and there are loads of books that explain these topics more interestingly. Perhaps not listening to your teacher gave birth to the book industry's "guide for dummies" series of books. Watching CNBC and Bloomberg also helps. So it's not entirely true that the television is an idiot box.
Recently, I had my hair cut and I was given a kiddie magazine to read. I suppose it was randomly given to me and it did not mean anything. In a short article contained in the magazine, there was a topic on the amount of allowance kids these days get, compared to what their parents were getting in the past.
That got me thinking.
Kids these days supposedly get about 150-250 a day. It sounds a lot to someone (like me) who received between 50-100 during my time. My parents had even "less", and most of the times, none, during their younger days.
At 250 a day, that's about 5,000 in a month. Even if we use 150, that translates to 3,000 a month. So assuming you have a child that's in high school already and your salary is about 25,000 - 30,000 (gross) a month, I'm amazed we Filipinos are still able to survive. Imagine, you still have to pay the tuition, your rent, utilities, etc. Frankly, I'm surprised some even have anything left to invest with.
If you don't read (or ignore) business news and skip on important data like inflation, just look at the allowance example. Your 50 pesos then is worth a third today (if your allowance is 150). Therefore, put another way, what you could buy for 50 pesos then, you have to pay 3x more today. Of course, this is just a simple straight computation. You can still purchase decent meals at about 50.00.
So how much of an increase in allowance (or inflation) was that? Assuming the climb in minimum allowance from 50-150 took about 15 years, that's about 13% annually. That's much higher than the inflation rate published by the government. If I'm not mistaken the average inflation rate is about 6-8% annually.
Of course, this simple computation does not take into account possible increases in spending power of Filipinos. For all we know, the increase in allowance means that parents today earn more than their parents a generation before.
So, while foreigners still look at the Philippines as a Third World, or, a Developing Country, in my opinion there is quite a substantial middle class in the country. However, the middle class are those easily wiped out during economic crises. They are also one of those who stand to benefit right away in an improving economy.
What's the relevance of inflation? As you can see, whatever you spend today, you will likely pay more for the same services a few years from now. Given this (frightening) set of numbers, I wouldn't be surprised to see children receiving 500 a day in my lifetime.
You also have to think about yourself. If you want to retire respectably and be able to afford future expensive healthcare expenses, then you better start saving... and investing for the future.
Going back, as you can see, you don't have to have an economics degree or any degree for that matter to know about critical information that directly affects your money.
Learn how to use your common sense. Unfortunately, common sense is not taught in school. It's taught by your parents and brought about by the experiences you go through. Too often people tend to stick to textbook style thinking and problem solving, failing to see that problems are simple if you just use a little bit of common sense.
So if you use your common sense, then you'd know that saving now is better than saving later. Further to this, it's better to invest now, than saving now. Ciao for now.
Tuesday, September 29, 2009
Weather you like it or not
Last weekend, the phrase "saving for a rainy day" really drove home the point. The country, particularly NCR, Marikina and Rizal were besieged by heavy rains and flash floods. Ondoy, an unassuming and unappealing name will forever be etched in history as one of the worst catastrophes in Philippine history.
Cars were lost. Houses were submerged. Lives disappeared in the blink of an eye. Rich, poor, the famous and the masses, no one was spared. Catastrophes of this nature are the great equalizers. It is also a reminder to everyone that nothing is permanent in this world.
There are texts circulating that the government lied about the dam thing. That is pun intended. Instead of spreading malicious texts enriching the telecoms companies, spend your time and money looking for ways to help the most affected.
Usually, when I receive propaganda texts, the text stops with me. There's no point fueling the rumor mill.
What does bad weather have to do with investing? Well, as one can see, anything and everything in investments have risks invisibly written over it.
Remember the real estate broker that offered you sweet notes and hints about property being the most stable investment? Do you think people who survived Provident Village will be able to go back without undergoing a severe case of trauma? The question is if residents would even want to go back especially those who nearly survived.
It just underscores the fact that while you can choose where to put your money, you will never escape the four letter word called RISK. You can protect yourself against risk, so in this instance you'd understand that perhaps you should have property insurance, or in the worst case scenario, life insurance. Of course, there are intricacies and restrictions in such insurance policies and you have to talk to your broker if acts of God are covered.
What about the stock market? If our stock market were a mature market, the stocks that would naturally go up would be the basic goods companies - anything to do with food, water, shelter. So you buy food stocks, beverage stocks, construction companies. Since we are in the Philippine market, you can speculate but if foreigners don't buy the stock, you can be assured of holding to a stuck.
Stay safe and brace yourself for tough weather in the next few days. Assuming the weather prediction's right.
Cars were lost. Houses were submerged. Lives disappeared in the blink of an eye. Rich, poor, the famous and the masses, no one was spared. Catastrophes of this nature are the great equalizers. It is also a reminder to everyone that nothing is permanent in this world.
There are texts circulating that the government lied about the dam thing. That is pun intended. Instead of spreading malicious texts enriching the telecoms companies, spend your time and money looking for ways to help the most affected.
Usually, when I receive propaganda texts, the text stops with me. There's no point fueling the rumor mill.
What does bad weather have to do with investing? Well, as one can see, anything and everything in investments have risks invisibly written over it.
Remember the real estate broker that offered you sweet notes and hints about property being the most stable investment? Do you think people who survived Provident Village will be able to go back without undergoing a severe case of trauma? The question is if residents would even want to go back especially those who nearly survived.
It just underscores the fact that while you can choose where to put your money, you will never escape the four letter word called RISK. You can protect yourself against risk, so in this instance you'd understand that perhaps you should have property insurance, or in the worst case scenario, life insurance. Of course, there are intricacies and restrictions in such insurance policies and you have to talk to your broker if acts of God are covered.
What about the stock market? If our stock market were a mature market, the stocks that would naturally go up would be the basic goods companies - anything to do with food, water, shelter. So you buy food stocks, beverage stocks, construction companies. Since we are in the Philippine market, you can speculate but if foreigners don't buy the stock, you can be assured of holding to a stuck.
Stay safe and brace yourself for tough weather in the next few days. Assuming the weather prediction's right.
Thursday, January 29, 2009
Preneed in Need of Capital
I wanted to go back to the Waves of Philippine Business but the recent wave of bad news convinced me otherwise. Preneed firms under water, export manufacturing companies shedding labor, and a cement plant temporarily shutting down. I fear that the effects of the global recession are yet to be fully felt in the Philippines.
The response of the Philippine government is to pass its responsibility to other countries. Note this sad fact -
"Job creation is tough in the Philippines, where some 27 million people live on a US dollar a day or less and where one in three adults are unemployed or underemployed, according to official data.
Jennifer Manalili, head of the labour department's Philippine Overseas Employment Administration, said that as a last resort Manila could export more of its work force."
That's been the solution of the Philippine Government for many administrations already. Instead of thinking of creative solutions to spur local small businesses to prosper, politicians are busy eating away at their pork barrel and praising OFW's as heroes to cover up for their own shortcomings. There has got to be a more concerted effort to spur small business lending.
There are plenty of reasons why there are more sari-sari stores than supermarkets or groceries in the country. There are also plenty reasons why carinderias stay carinderias for eternity here. I am sure that one reason is poor lending practices or just common place ignorance about what is available out there. This deserves a post by itself at a future date.
I attended the "Meeting of Major Business Organizations on the 2009 Economic Roadmap" (Yes, that is the title verbatim) held two weeks back. The takeaway there was that the government would set up a support fund for returning OFWs. We just don't know when this will be in place or how this will be distributed. Maybe they will provide information soon.
Apart from that, the government is banking on the BPO sector to absorb the expected job cuts coming from the manufacturing/export industries. The BPO sector is expected to continue to grow this year. I wonder if President Obama will push through with his "bring jobs back to America" call.
What was not indicated (nor expected I believe) was the recent closure of three preneed companies - Legacy Consolidated Plans, Scholarship Plan Philippines, and All Asia Plans Corp. Before that, Pacific Plans of the Yuchengco group (now owned by Noel Oñate) also faced similar problems. There is something wrong with the business model of preneed firms, particularly those dealing with education pension plans.
(To know Noel Oñate's background check this.)
I wonder if schools in the country ever experienced recession? If I remember my corporation law right, I know for a fact that schools are not charged any income tax. So if they are not paying higher taxes, what merits their annual hike in tuition fees? Hmmm...
While it may sound like an excuse to some, Mr. Oñate's assessment is equally true - "He cites that while tuition has gone up by 30-40%, purchased educational plans earn only 10%."
In fact, just ask yourself, where do you invest money your money? Savings, mutual funds, the stock market, bonds, property, insurance. Now, assess all of these -
Those that give guaranteed returns are at the low single digits.
Those like mutual funds and the stock market are volatile and market dependent.
Bonds are below inflation rate (especially vs. last year), and most of them do not give you compound interest benefits.
Properties on the other hand are cyclical and depend very much on location (don't listen to your real estate broker about property as the best investment) and pretty much the rest of what happens to the value of your property rests on the FUTURE. Something you don't have any hold over.
Insurance on the other hand has a big return on your premiums invested. However, it requires that the planholder die first. So who enjoys the benefit? Definitely not the planholder.
So you see, where can you invest your money in the Philippines? These are probably the same questions the management team of preneed companies ask themselves.
While much of the anger and fury has been directed at preneed firms, there should be even more levied on schools. Private education is one of the major expenses in a family's budget. If tuition rate hikes are in the double digit areas, do you think that on wages alone, you'll be able to send your children to school? I don't want to wake up one day and see my tuition bill rise to 500,000 per semester. You should wonder about that too.
The response of the Philippine government is to pass its responsibility to other countries. Note this sad fact -
"Job creation is tough in the Philippines, where some 27 million people live on a US dollar a day or less and where one in three adults are unemployed or underemployed, according to official data.
Jennifer Manalili, head of the labour department's Philippine Overseas Employment Administration, said that as a last resort Manila could export more of its work force."
That's been the solution of the Philippine Government for many administrations already. Instead of thinking of creative solutions to spur local small businesses to prosper, politicians are busy eating away at their pork barrel and praising OFW's as heroes to cover up for their own shortcomings. There has got to be a more concerted effort to spur small business lending.
There are plenty of reasons why there are more sari-sari stores than supermarkets or groceries in the country. There are also plenty reasons why carinderias stay carinderias for eternity here. I am sure that one reason is poor lending practices or just common place ignorance about what is available out there. This deserves a post by itself at a future date.
I attended the "Meeting of Major Business Organizations on the 2009 Economic Roadmap" (Yes, that is the title verbatim) held two weeks back. The takeaway there was that the government would set up a support fund for returning OFWs. We just don't know when this will be in place or how this will be distributed. Maybe they will provide information soon.
Apart from that, the government is banking on the BPO sector to absorb the expected job cuts coming from the manufacturing/export industries. The BPO sector is expected to continue to grow this year. I wonder if President Obama will push through with his "bring jobs back to America" call.
What was not indicated (nor expected I believe) was the recent closure of three preneed companies - Legacy Consolidated Plans, Scholarship Plan Philippines, and All Asia Plans Corp. Before that, Pacific Plans of the Yuchengco group (now owned by Noel Oñate) also faced similar problems. There is something wrong with the business model of preneed firms, particularly those dealing with education pension plans.
(To know Noel Oñate's background check this.)
I wonder if schools in the country ever experienced recession? If I remember my corporation law right, I know for a fact that schools are not charged any income tax. So if they are not paying higher taxes, what merits their annual hike in tuition fees? Hmmm...
While it may sound like an excuse to some, Mr. Oñate's assessment is equally true - "He cites that while tuition has gone up by 30-40%, purchased educational plans earn only 10%."
In fact, just ask yourself, where do you invest money your money? Savings, mutual funds, the stock market, bonds, property, insurance. Now, assess all of these -
Those that give guaranteed returns are at the low single digits.
Those like mutual funds and the stock market are volatile and market dependent.
Bonds are below inflation rate (especially vs. last year), and most of them do not give you compound interest benefits.
Properties on the other hand are cyclical and depend very much on location (don't listen to your real estate broker about property as the best investment) and pretty much the rest of what happens to the value of your property rests on the FUTURE. Something you don't have any hold over.
Insurance on the other hand has a big return on your premiums invested. However, it requires that the planholder die first. So who enjoys the benefit? Definitely not the planholder.
So you see, where can you invest your money in the Philippines? These are probably the same questions the management team of preneed companies ask themselves.
While much of the anger and fury has been directed at preneed firms, there should be even more levied on schools. Private education is one of the major expenses in a family's budget. If tuition rate hikes are in the double digit areas, do you think that on wages alone, you'll be able to send your children to school? I don't want to wake up one day and see my tuition bill rise to 500,000 per semester. You should wonder about that too.
Wednesday, January 21, 2009
Guerilla Investing is Back
... After securing an internet connection one month after the last post.
I am using Sun Cellular's mobile broadband and I tell you, the monthly rate is quite a steal. So far, in my two weeks of using the service, it has been quite consistent. (Unlike their mobile phone service). If you already have an existing Sun Cellular line, you can avail of the service for just Ph 799 a month.
Before I go back to my usual guerilla posts, I'd like to blab about personal observations heh. O.o
These aren't trivial posts though, my ever observant and critical mind could not stop wandering and wondering about the real state of the economy. I used to say that the Philippine economy is a student economy. I forgot to mention that the country is also driven by the mall culture economy.
Last month I went to Robinsons Place Ermita and SM Manila due to the proximity from where I am based. Both were open until midnight on the occasions I went there. It was a pitiful sight. There were only scant shoppers and every shop had the "S" word. I wondered if it was because everyone was at the Mall of Asia or that the economy was that bad.
In any case, I am of the opinion that the mall business has reached saturation point. Apart from that, the growth rate of personal wages will fall behind the rate of expansion of malls. Malls are just snatching away customers from each other. The industry is much like the cellular network industry. While there may still be growth, each provider is just eating away at the share of the next competitor.
More than just wooing customers from the next competitor, each company is also at risk of cannibalizing its own market. Smart has Talk and Text. Globe has Touch Mobile. Their prepaid promotions (text all you can, etc) is used to flank Sun Cellular. Now, Red Mobile is attempting to eat a pie that's already saturated. When one company reports growth while another report losses, you know that the industry has reached saturation point.
Is the Philippines just one big saturated market?
Have you seen the distance between Banco De Oro branches? You should visit Binondo. Along Soler street, you will see not one, not two, but three Banco de Oro branches along the same street! This isn't the best example as some were recently converted Equitable Bank branches. Nonetheless, it makes you wonder if there is any room left for new players in local industries.
Going back to the malls, I wouldn't be surprised if malls compete with each other and decide to have parking rate promos or, better yet, waive parking fees on selected hours just to entice customers to visit their malls. SM alone already has 32 malls if I'm not mistaken. And like the relationship of Jollibee and McDonalds, a Robinsons mall is never far away from SM.
*****
Thank you for patiently waiting for a new post. When you come back here, you'll get more guerilla investing tips. Ciao!
I am using Sun Cellular's mobile broadband and I tell you, the monthly rate is quite a steal. So far, in my two weeks of using the service, it has been quite consistent. (Unlike their mobile phone service). If you already have an existing Sun Cellular line, you can avail of the service for just Ph 799 a month.
Before I go back to my usual guerilla posts, I'd like to blab about personal observations heh. O.o
These aren't trivial posts though, my ever observant and critical mind could not stop wandering and wondering about the real state of the economy. I used to say that the Philippine economy is a student economy. I forgot to mention that the country is also driven by the mall culture economy.
Last month I went to Robinsons Place Ermita and SM Manila due to the proximity from where I am based. Both were open until midnight on the occasions I went there. It was a pitiful sight. There were only scant shoppers and every shop had the "S" word. I wondered if it was because everyone was at the Mall of Asia or that the economy was that bad.
In any case, I am of the opinion that the mall business has reached saturation point. Apart from that, the growth rate of personal wages will fall behind the rate of expansion of malls. Malls are just snatching away customers from each other. The industry is much like the cellular network industry. While there may still be growth, each provider is just eating away at the share of the next competitor.
More than just wooing customers from the next competitor, each company is also at risk of cannibalizing its own market. Smart has Talk and Text. Globe has Touch Mobile. Their prepaid promotions (text all you can, etc) is used to flank Sun Cellular. Now, Red Mobile is attempting to eat a pie that's already saturated. When one company reports growth while another report losses, you know that the industry has reached saturation point.
Is the Philippines just one big saturated market?
Have you seen the distance between Banco De Oro branches? You should visit Binondo. Along Soler street, you will see not one, not two, but three Banco de Oro branches along the same street! This isn't the best example as some were recently converted Equitable Bank branches. Nonetheless, it makes you wonder if there is any room left for new players in local industries.
Going back to the malls, I wouldn't be surprised if malls compete with each other and decide to have parking rate promos or, better yet, waive parking fees on selected hours just to entice customers to visit their malls. SM alone already has 32 malls if I'm not mistaken. And like the relationship of Jollibee and McDonalds, a Robinsons mall is never far away from SM.
*****
Thank you for patiently waiting for a new post. When you come back here, you'll get more guerilla investing tips. Ciao!
Monday, October 6, 2008
The Thermometer of the Global Economy - Stock Markets
Personal random thoughts -
Sorry folks, I've been delayed by not a few days from my scheduled posting date. Been rather busy and had to prioritize them over my blog... unfortunately.
I did, however, before this respite of time, manage to write a piece of fiction, just to rescue my sanity.
I've also added a new search feature to this site care of Google. Do tell me if it's useful or it needs more tweaking.
Important Philippine business news -
AIG plans to sell its Philippine unit Philamlife
Philippine Stock Market UP (yes, you read that right) for the third quarter unlike other Southeast Asian bourses. (Sorry no link, I just saw it on CNBC last week). Strength? Looks like it.
HK Securities, a local stockbrokerage despite its name, is going to be taken over by the PSE
On to our blog entry -
Stock markets worldwide plummet because of growing recession fears
As I am blogging, the DOW is down by triple digits, and and has fallen the 10,000 mark. The passing of the bailout package has become a classic case of sell on news for traders. I guess passing it was just to delay the inevitable path of the DOW to 8000.
I can only imagine the bloodshed in tomorrow's local market. (Shaking my head). This has been a tough year for people trading the stock market. The stock market is no longer a barometer. It's now a thermometer. It's a thermometer for sick stock traders, economists, investors and every other individual. All of whom are clueless and helpless... sick from the avalanche of negative news.
The thermometer has yet to reach typhoid fever levels, but with banks falling like dominoes, there is a lingering question, who's next? Stock markets, and obviously even us regular folks, don't like uncertainty. Until all these bad news are accounted for, we'll be seeing a sea of red for the weeks ahead.
The things to look out for right now are if other businesses are also affected. Right now, bulk of the problems everywhere are in the financial sector. The problem is when banks start folding up, businesses will have difficulty accessing credit to fund their expansion. This simple concept is packaged in a term called credit squeeze.
Right now, I don't and can't offer any piece of positive news. Hold on to your butts and cash. And if you're brave enough, you can still put money into INVESTING. Those who made the right investments during the fallout of the Asian financial crisis are happy now. Who knows, these crazy and panicky times could provide an ample opportunity for the shrewd investor out there.
I'm not recommending any Philippine stock though. Not yet anyways. But there is one thing I might suggest. And that is gold.
Sorry folks, I've been delayed by not a few days from my scheduled posting date. Been rather busy and had to prioritize them over my blog... unfortunately.
I did, however, before this respite of time, manage to write a piece of fiction, just to rescue my sanity.
I've also added a new search feature to this site care of Google. Do tell me if it's useful or it needs more tweaking.
Important Philippine business news -
AIG plans to sell its Philippine unit Philamlife
Philippine Stock Market UP (yes, you read that right) for the third quarter unlike other Southeast Asian bourses. (Sorry no link, I just saw it on CNBC last week). Strength? Looks like it.
HK Securities, a local stockbrokerage despite its name, is going to be taken over by the PSE
On to our blog entry -
Stock markets worldwide plummet because of growing recession fears
As I am blogging, the DOW is down by triple digits, and and has fallen the 10,000 mark. The passing of the bailout package has become a classic case of sell on news for traders. I guess passing it was just to delay the inevitable path of the DOW to 8000.
I can only imagine the bloodshed in tomorrow's local market. (Shaking my head). This has been a tough year for people trading the stock market. The stock market is no longer a barometer. It's now a thermometer. It's a thermometer for sick stock traders, economists, investors and every other individual. All of whom are clueless and helpless... sick from the avalanche of negative news.
The thermometer has yet to reach typhoid fever levels, but with banks falling like dominoes, there is a lingering question, who's next? Stock markets, and obviously even us regular folks, don't like uncertainty. Until all these bad news are accounted for, we'll be seeing a sea of red for the weeks ahead.
The things to look out for right now are if other businesses are also affected. Right now, bulk of the problems everywhere are in the financial sector. The problem is when banks start folding up, businesses will have difficulty accessing credit to fund their expansion. This simple concept is packaged in a term called credit squeeze.
Right now, I don't and can't offer any piece of positive news. Hold on to your butts and cash. And if you're brave enough, you can still put money into INVESTING. Those who made the right investments during the fallout of the Asian financial crisis are happy now. Who knows, these crazy and panicky times could provide an ample opportunity for the shrewd investor out there.
I'm not recommending any Philippine stock though. Not yet anyways. But there is one thing I might suggest. And that is gold.
Sunday, September 28, 2008
The Philippine Economy in a Nutshell
Hello readers, I'm back - not from outer space - but from hectic work. As of 1229AM September 29 Manila time, the US bailout package is still being worked on. Since there's been and there'll be lots of news coverage about it, I won't talk about it anymore.
The first Ber month is about to come to an end, and we're opening the window to the usually festive and ultra consumerism period of the 4th quarter. It's been quite a year so far, both for the investing world and my personal world. I wonder if there'll be some respite and good news, again both for the investing world and my own.
I've been visiting SM Manila for quite a number of times recently and I am just amazed at the number of foot traffic it has - even on weekdays. A majority of those are students. Not surprising considering that there are many colleges within the vicinity of the mall.
That observation made me recall what a friend of mine (a Finance grad) once told me. He told me that the Philippines is basically just a student economy. Business is bad during the summer break, then it picks up when children and young adults hit the schools once more. That's open for debate, but if you think about it, it is a good point.
I don't have specific data on what students spend on these days. Years before though, I was able to encounter a research on where they used their money on. The problem with that piece of research was that it was centered only on drinks and snacks. So it did not show the complete pie of student allowance, but a portion of it. The research sought to pinpoint what brands students bought for their snacks given their limited budgets.
I am also unaware how much is given to children as allowance these days. I remember that when I was still a young boy, I would get about 5.00 or 10.00 a day. (not a week, I'm not that old! haha). But that wasn't everyday as my parents wanted to control how much money I was getting.
Teaching kids about money is an important value that parents most often forget. I think I should talk about that in the future. Going back, I wondered about my friend's comment. He probably based his conclusion on a microcosm of the Nursing students population. The population particularly surrounding the area of Metropolitan Hospital in Sta Cruz Manila.
During the years after 1997, the vicinity of the hospital was a dead area. Even though there were a lots of private schools there, when students are dismissed from classes everyone immediately goes home. 10 years after, the place is alive with students in white uniform - Nursing students. Old commercial areas were renovated into food kiosks and stalls. There was a mini-economy that was created in the area. All because Metropolitan Hospital introduced a Nursing course.
I am amazed by how the wheels of economy work. Money and wealth were created in that area. This was all because of that course offering by the hospital. I just wonder, where did the parents supporting these students with tuition money and allowance, originally spend their money on? The growth in the money supply of the area may have also been spurred by the exponential growth of the OFW remittances. It's definitely the case that not one answer can suffice.
If you want to do business, it's these kinds of opportunities that you must seize. In a future post, I'll talk about investing in the next business wave of the Philippines. Sort of like an Alvin Toffler type of forecasting. But mine is more based upon observation and tons of hindsight. I don't have the benefit of tons of research to make a scientific prediction.
Ciao for now.
**** I guess I have to go back to the bailout issue. My source of inspiration - Warren Buffett, said to the US Congress: Bail out economy or face 'meltdown'.
The first Ber month is about to come to an end, and we're opening the window to the usually festive and ultra consumerism period of the 4th quarter. It's been quite a year so far, both for the investing world and my personal world. I wonder if there'll be some respite and good news, again both for the investing world and my own.
I've been visiting SM Manila for quite a number of times recently and I am just amazed at the number of foot traffic it has - even on weekdays. A majority of those are students. Not surprising considering that there are many colleges within the vicinity of the mall.
That observation made me recall what a friend of mine (a Finance grad) once told me. He told me that the Philippines is basically just a student economy. Business is bad during the summer break, then it picks up when children and young adults hit the schools once more. That's open for debate, but if you think about it, it is a good point.
I don't have specific data on what students spend on these days. Years before though, I was able to encounter a research on where they used their money on. The problem with that piece of research was that it was centered only on drinks and snacks. So it did not show the complete pie of student allowance, but a portion of it. The research sought to pinpoint what brands students bought for their snacks given their limited budgets.
I am also unaware how much is given to children as allowance these days. I remember that when I was still a young boy, I would get about 5.00 or 10.00 a day. (not a week, I'm not that old! haha). But that wasn't everyday as my parents wanted to control how much money I was getting.
Teaching kids about money is an important value that parents most often forget. I think I should talk about that in the future. Going back, I wondered about my friend's comment. He probably based his conclusion on a microcosm of the Nursing students population. The population particularly surrounding the area of Metropolitan Hospital in Sta Cruz Manila.
During the years after 1997, the vicinity of the hospital was a dead area. Even though there were a lots of private schools there, when students are dismissed from classes everyone immediately goes home. 10 years after, the place is alive with students in white uniform - Nursing students. Old commercial areas were renovated into food kiosks and stalls. There was a mini-economy that was created in the area. All because Metropolitan Hospital introduced a Nursing course.
I am amazed by how the wheels of economy work. Money and wealth were created in that area. This was all because of that course offering by the hospital. I just wonder, where did the parents supporting these students with tuition money and allowance, originally spend their money on? The growth in the money supply of the area may have also been spurred by the exponential growth of the OFW remittances. It's definitely the case that not one answer can suffice.
If you want to do business, it's these kinds of opportunities that you must seize. In a future post, I'll talk about investing in the next business wave of the Philippines. Sort of like an Alvin Toffler type of forecasting. But mine is more based upon observation and tons of hindsight. I don't have the benefit of tons of research to make a scientific prediction.
Ciao for now.
**** I guess I have to go back to the bailout issue. My source of inspiration - Warren Buffett, said to the US Congress: Bail out economy or face 'meltdown'.
Friday, June 13, 2008
Piece and Odor
After the rise in oil prices, rice followed. Now pandesal will follow suit when bakers are unable to absorb the cost of flour anymore. I hope that the next thing to rise won't be the masa's BP.
We're facing one of the highest inflation rate growth in years, but to take that into a better perspective, read this - Vietnam with 20% inflation rate growth from the previous year. 20 percent! Now doesn't that make you happy you were living in one of the 7,107 islands here?
Inflation is one thing, and peace and order is another. It concerns me that robbery (and as a result, killing) has been on the rise in recent months. Such as this one. This follows the recent break in at the Talayan Village in QC. And just follows the huge heist in the RCBC Laguna branch.
I don't have the statistics to back my claim that crime is on the rise; but, I am pretty sure that it is. As the election season kicks in in 2009, I think there'll be even more scandalous crimes. But even before campaigning begins, petty crimes due to hard times would already be in vogue. Security and order is something that is starting to falter in this part of the world. The person who tells you otherwise is either filthy rich and lives in a fort or the person's out of touch with reality.
Crimes - in Fashion now
Most of the crimes here go unreported and and I don't even have to guess why. If a student is held up and his/her cellphone is robbed they'd call home and report the incident. I wager they won't even go to the precinct to file a report at the police desk. For all they know, the cop behind the desk is the coddler. That's one less incident reported. Moreover, what's the point of reporting it if you know you will find your phone faster at the nearest pawnshop or retail store?
One similar incident happened to me once before. It happened along one of the most crime infested nest areas of Manila - Recto. It took three guys and one balisong to take my mobile phone. It's not like I resisted though.
It was quite ironic and poetic because it happened right across a small local church. Where was God when that happened? And the better question is, where were the cops when that happened?
It's pointless to go to a police station to file a case. For one, the crime has already been committed and the crooks are long gone. If you don't "fund" the investigation, the cop behind the desk will just type your case away and go back to his siesta.
Pardon my ignorance, but I think that the concept of a police system is one of prevention. Cops are there to prevent a crime from happening in the first place. In the Philippines, cops are there to catch the crook, after the fact. Like when the perpetrators have already legitimized their loot through various laundry machines [I use these words on purpose], or when the victim/s have already died.
And in the off chance that you meet one of these handsome men in blue, you are most likely going to be treated like a criminal. Only in this country is a citizen treated like a criminal by the police. Try going through a "regular" checkpoint. I once traveled with a friend along Roxas Blvd, via car and we were nearby City Hall, and we went through a barricade of cops and cop-mobiles.
Checking In at the Checkpoint
I didn't realize that we were on a nationwide red alert then. I say that with sarcasm as that was just a regular day. No threat of coup d'etat, no big time crook on the loose.
They asked us to open our windows, open our glove compartment. Heck the cops even asked me to open my bag. Under those circumstances, tell me, should I oblige or not? All I know is that there is one general rule in the galaxy, and that is,
"Ye who wields no gun should yield to the one with the gun."
So I did.
It was a good thing that my friend's uncle was a senior police officer otherwise they could've planted "evidence" in the car and accused us as big drug lords. For some who think that this is some urban myth, there ARE cops who REALLY plant drugs on hapless people to extort their hard earned money.
I am unsure if the police here realize that it is with the citizen's money that pays for their salaries. Then again, probably not, because, hello! Brain Drain! All of the world class Filipino workers are scattered across the globe, except their home country! So we are stuck with the rest of he 80M strong population.
(I do not wish to disrespect the Philippine National Police, but I can't help it that that is the mental image I have of our cops. It doesn't help that I have had unpleasant experiences with them. Let me tell you a short story. Can you believe it that I was once accosted in front of my own house??
It happened a few years ago, I was inside the car with my lady friend, and a cop-mobile passed by the car. It stopped abruptly and one foot soldier armed with a rifle disembarked. He approached the car and tapped on my window.
"Anong ginagawa ninyo?" (What are you doing)
I looked at him for a few seconds. I was trying to understand his question. Was he asking why I was parked there with a lady? Was he insinuating that we were committing "acts of lasciviousness"? All I know was that we were just talking inside the car. And I also knew that at that time, there were no laws banning two opposite gendered people to speak inside their own car. So I maintained my composure and sent him off with a curt reply.
"Nag-uusap kami. Ayan bahay ko o, anong paki mo?" (We are talking. That is my house over there. This is none of your business".
He stared at me for a while, probably collecting his brain cells and just went back to his cop-mobile and left.
I was scared more by his sleepy almost dazed (as in high on drugs kind of dazed) demeanor than his moronic question.
There are still no laws banning opposite sex conversations inside a parked car to this date.
My blog is still about finance and investments, don't worry. However, as someone who offers financial advice, I cannot stay blind to what happens around me. At the end of the day, money is worth nothing when the one earning the money is already dead.
To borrow Suze Orman's goodbye greeting, STAY SAFE!
Or, we can follow our nation's politicians advice and "GET OUT OF THE COUNTRY IF YOU CAN'T LIVE WITH US!"
***** Footnote ******
I realized that I may have a slew of unfinished blog topic series. I will have to double check on them. If I am not mistaken, I didn't finish up my piece on opening up your own business and another series on making a mission and vision for yourself.
I am still busy but I owe this blog (and you, the readers) more than just a visit and I promise to update my blog weekly. Yeah, I've made a promise before this that I'll update my blog daily, but I guess my idealism overcame my sense of reality. (Grinning)
Ciao.
We're facing one of the highest inflation rate growth in years, but to take that into a better perspective, read this - Vietnam with 20% inflation rate growth from the previous year. 20 percent! Now doesn't that make you happy you were living in one of the 7,107 islands here?
Inflation is one thing, and peace and order is another. It concerns me that robbery (and as a result, killing) has been on the rise in recent months. Such as this one. This follows the recent break in at the Talayan Village in QC. And just follows the huge heist in the RCBC Laguna branch.
I don't have the statistics to back my claim that crime is on the rise; but, I am pretty sure that it is. As the election season kicks in in 2009, I think there'll be even more scandalous crimes. But even before campaigning begins, petty crimes due to hard times would already be in vogue. Security and order is something that is starting to falter in this part of the world. The person who tells you otherwise is either filthy rich and lives in a fort or the person's out of touch with reality.
Crimes - in Fashion now
Most of the crimes here go unreported and and I don't even have to guess why. If a student is held up and his/her cellphone is robbed they'd call home and report the incident. I wager they won't even go to the precinct to file a report at the police desk. For all they know, the cop behind the desk is the coddler. That's one less incident reported. Moreover, what's the point of reporting it if you know you will find your phone faster at the nearest pawnshop or retail store?
One similar incident happened to me once before. It happened along one of the most crime infested nest areas of Manila - Recto. It took three guys and one balisong to take my mobile phone. It's not like I resisted though.
It was quite ironic and poetic because it happened right across a small local church. Where was God when that happened? And the better question is, where were the cops when that happened?
It's pointless to go to a police station to file a case. For one, the crime has already been committed and the crooks are long gone. If you don't "fund" the investigation, the cop behind the desk will just type your case away and go back to his siesta.
Pardon my ignorance, but I think that the concept of a police system is one of prevention. Cops are there to prevent a crime from happening in the first place. In the Philippines, cops are there to catch the crook, after the fact. Like when the perpetrators have already legitimized their loot through various laundry machines [I use these words on purpose], or when the victim/s have already died.
And in the off chance that you meet one of these handsome men in blue, you are most likely going to be treated like a criminal. Only in this country is a citizen treated like a criminal by the police. Try going through a "regular" checkpoint. I once traveled with a friend along Roxas Blvd, via car and we were nearby City Hall, and we went through a barricade of cops and cop-mobiles.
Checking In at the Checkpoint
I didn't realize that we were on a nationwide red alert then. I say that with sarcasm as that was just a regular day. No threat of coup d'etat, no big time crook on the loose.
They asked us to open our windows, open our glove compartment. Heck the cops even asked me to open my bag. Under those circumstances, tell me, should I oblige or not? All I know is that there is one general rule in the galaxy, and that is,
"Ye who wields no gun should yield to the one with the gun."
So I did.
It was a good thing that my friend's uncle was a senior police officer otherwise they could've planted "evidence" in the car and accused us as big drug lords. For some who think that this is some urban myth, there ARE cops who REALLY plant drugs on hapless people to extort their hard earned money.
I am unsure if the police here realize that it is with the citizen's money that pays for their salaries. Then again, probably not, because, hello! Brain Drain! All of the world class Filipino workers are scattered across the globe, except their home country! So we are stuck with the rest of he 80M strong population.
(I do not wish to disrespect the Philippine National Police, but I can't help it that that is the mental image I have of our cops. It doesn't help that I have had unpleasant experiences with them. Let me tell you a short story. Can you believe it that I was once accosted in front of my own house??
It happened a few years ago, I was inside the car with my lady friend, and a cop-mobile passed by the car. It stopped abruptly and one foot soldier armed with a rifle disembarked. He approached the car and tapped on my window.
"Anong ginagawa ninyo?" (What are you doing)
I looked at him for a few seconds. I was trying to understand his question. Was he asking why I was parked there with a lady? Was he insinuating that we were committing "acts of lasciviousness"? All I know was that we were just talking inside the car. And I also knew that at that time, there were no laws banning two opposite gendered people to speak inside their own car. So I maintained my composure and sent him off with a curt reply.
"Nag-uusap kami. Ayan bahay ko o, anong paki mo?" (We are talking. That is my house over there. This is none of your business".
He stared at me for a while, probably collecting his brain cells and just went back to his cop-mobile and left.
I was scared more by his sleepy almost dazed (as in high on drugs kind of dazed) demeanor than his moronic question.
There are still no laws banning opposite sex conversations inside a parked car to this date.
My blog is still about finance and investments, don't worry. However, as someone who offers financial advice, I cannot stay blind to what happens around me. At the end of the day, money is worth nothing when the one earning the money is already dead.
To borrow Suze Orman's goodbye greeting, STAY SAFE!
Or, we can follow our nation's politicians advice and "GET OUT OF THE COUNTRY IF YOU CAN'T LIVE WITH US!"
***** Footnote ******
I realized that I may have a slew of unfinished blog topic series. I will have to double check on them. If I am not mistaken, I didn't finish up my piece on opening up your own business and another series on making a mission and vision for yourself.
I am still busy but I owe this blog (and you, the readers) more than just a visit and I promise to update my blog weekly. Yeah, I've made a promise before this that I'll update my blog daily, but I guess my idealism overcame my sense of reality. (Grinning)
Ciao.
Thursday, June 5, 2008
Inflation, Up! Investments, Down!
I've confessed that I'm no economist, but I'm someone who tries to keep an eye on the economic numbers out there. It's a new practice for me actually. I only started to care about them when I began looking at investments.
GDP, GNP, inflation, etc. etc. These were terms and acronyms that drove me to sleep during my college days (hehe). I've never encountered an economics professor that made any sense to me, or at least taught me the relevance of knowing economic numbers. Further to that, there are only a handful of professors who can really teach beyond what is in the textbooks. But that's a subject for a future blog entry.
According to the news, Philippine inflation rose to 9.6 in May. This was a mark higher than the one registered in April, which was 8.3. Based on past history, this was the highest inflation rate in 9 years. The main culprit was food, which together with tobacco and beverages, comprise a big chunk of the inflation formula. Commodities, primarily oil also helped to increase the inflation rate.
Le Stuck Market
The news about the 9 year high inflation was headlined everywhere, and our stock market, already posting double digit declines from year ago, bled even further. Most of the stocks are at their 52 week lows already. Based from that alone, stocks should be zero risk right? It depends.
Megaworld is a good example. Prior to this month its 52 week low was somewhere in the 2.00 range. Look at its price now, 1.82. If you were of the school of thought that believed that 2.00 was a nice entry point, I think you'd be crying and cursing by now.
Benpres is another example. 2.30 was probably the 52 week low. it's now down to 1.80. Almost the same price as Megaworld, but with a far worse bearish performance.
Of the two, Megaworld is about to finish its double top plunge. Next week should be an interesting week for this battered stock. Further decline will bring it to 1.50, and then there should be consolidation. There'll likely be some rally en route to 1.50, and investors are advised to be on the short term holding mindset or stay away entirely from Megaworld. I'm not buying nor recommending this stock as fundamentally speaking, the BSP might still raise interest rates, ensuring Megaworld's continued spiral.
Well, my college professor should've told us, "Learn your economics now. It will help you understand and anticipate the direction of the stock market." Anyway, back to my topic.
I can imagine the dilemma investors have right now. I checked on this site, and almost 99% of the mutual funds are down for the year. Bond funds will be in deep trouble next since most Asian banks seem to be inflation-averse. This means that interest rates will resume their upward trend. Time to get that loan you've been trying to postpone. (I don't mean get a loan now, but if you have a business or a personal need that warrants a loan, get one now while you still can).
Dissecting Inflation
My broker told me that inflation in the Philippines is reported as YEAR ON YEAR. That certainly piqued my curiosity so I ventured to this website. Upon further investigation, national inflation actually DECELERATED in May from April by 0.5 percentage point. Look at this for some boring but important information.
Well now, is that a ray of hope for us?
As that hackneyed phrase goes, don't believe everything you read in the papers. Actually, what's better is to read between the lines. Obviously a headline of "9-year high inflation" is more news worthy and sensational than say "Inflation slows month on month in May".
I attribute it to the government's efforts to cushion the price of rice during April. As you have seen, news on the rice crisis died down during that month up until the end of May. The news shifted to Meralco, and Free Texting. There should be a study on the effects of news on investments and the economy. There's probably a correlation.
Apart from the government's efforts, I figure that maybe harvest time is near? Or maybe rice has been harvested, thereby decreasing the price for rice. I searched over the internet, albeit minimally, and couldn't find the exact time of harvest. What I have uncovered is that in general there are 2-3 times of harvest per year for rice.
What's interesting to note though, based from this article, is that we were actually a rice EXPORTER during the much maligned administration of Ferdinand Marcos. Thanks to my history professor, I didn't know that.
We may have a reprieve for rice... for now. But what worries me will be the price of oil. Rumors are rife that it would reach 60 to 65/liter this year. So for those who have multiple cars in the garage, maybe you can sell it to me for a dime eh? Haha.
Until my next entry.
GDP, GNP, inflation, etc. etc. These were terms and acronyms that drove me to sleep during my college days (hehe). I've never encountered an economics professor that made any sense to me, or at least taught me the relevance of knowing economic numbers. Further to that, there are only a handful of professors who can really teach beyond what is in the textbooks. But that's a subject for a future blog entry.
According to the news, Philippine inflation rose to 9.6 in May. This was a mark higher than the one registered in April, which was 8.3. Based on past history, this was the highest inflation rate in 9 years. The main culprit was food, which together with tobacco and beverages, comprise a big chunk of the inflation formula. Commodities, primarily oil also helped to increase the inflation rate.
Le Stuck Market
The news about the 9 year high inflation was headlined everywhere, and our stock market, already posting double digit declines from year ago, bled even further. Most of the stocks are at their 52 week lows already. Based from that alone, stocks should be zero risk right? It depends.
Megaworld is a good example. Prior to this month its 52 week low was somewhere in the 2.00 range. Look at its price now, 1.82. If you were of the school of thought that believed that 2.00 was a nice entry point, I think you'd be crying and cursing by now.
Benpres is another example. 2.30 was probably the 52 week low. it's now down to 1.80. Almost the same price as Megaworld, but with a far worse bearish performance.
Of the two, Megaworld is about to finish its double top plunge. Next week should be an interesting week for this battered stock. Further decline will bring it to 1.50, and then there should be consolidation. There'll likely be some rally en route to 1.50, and investors are advised to be on the short term holding mindset or stay away entirely from Megaworld. I'm not buying nor recommending this stock as fundamentally speaking, the BSP might still raise interest rates, ensuring Megaworld's continued spiral.
Well, my college professor should've told us, "Learn your economics now. It will help you understand and anticipate the direction of the stock market." Anyway, back to my topic.
I can imagine the dilemma investors have right now. I checked on this site, and almost 99% of the mutual funds are down for the year. Bond funds will be in deep trouble next since most Asian banks seem to be inflation-averse. This means that interest rates will resume their upward trend. Time to get that loan you've been trying to postpone. (I don't mean get a loan now, but if you have a business or a personal need that warrants a loan, get one now while you still can).
Dissecting Inflation
My broker told me that inflation in the Philippines is reported as YEAR ON YEAR. That certainly piqued my curiosity so I ventured to this website. Upon further investigation, national inflation actually DECELERATED in May from April by 0.5 percentage point. Look at this for some boring but important information.
Well now, is that a ray of hope for us?
As that hackneyed phrase goes, don't believe everything you read in the papers. Actually, what's better is to read between the lines. Obviously a headline of "9-year high inflation" is more news worthy and sensational than say "Inflation slows month on month in May".
I attribute it to the government's efforts to cushion the price of rice during April. As you have seen, news on the rice crisis died down during that month up until the end of May. The news shifted to Meralco, and Free Texting. There should be a study on the effects of news on investments and the economy. There's probably a correlation.
Apart from the government's efforts, I figure that maybe harvest time is near? Or maybe rice has been harvested, thereby decreasing the price for rice. I searched over the internet, albeit minimally, and couldn't find the exact time of harvest. What I have uncovered is that in general there are 2-3 times of harvest per year for rice.
What's interesting to note though, based from this article, is that we were actually a rice EXPORTER during the much maligned administration of Ferdinand Marcos. Thanks to my history professor, I didn't know that.
We may have a reprieve for rice... for now. But what worries me will be the price of oil. Rumors are rife that it would reach 60 to 65/liter this year. So for those who have multiple cars in the garage, maybe you can sell it to me for a dime eh? Haha.
Until my next entry.
Tuesday, February 5, 2008
Investing in the Philippine Republic
There is truth to the oft quoted, hackneyed statement, "When it rains it pours". You can also add to that the tears pouring out of my eyes, not because of sadness, not because of depression, but because of frustration with the way things go around in this country.
With the recent ouster of JDV, it casts doubts once again on the perennial problem that this country has had for years. And we're not talking about budget deficits or debt here, but of politics. It seems that with every one step forward we make, we make two steps backwards.
After our economy sprung a surprising 7.3% growth, I wonder, will this be sustained for 2008?
Sometimes, I am amazed at how even with the level of corruption, political mudslinging, smuggling, and brain drain that this country has, we still manage to see improvements in the country. You'd be blind if you said there are no improvements. It's just that we don't have the pacing of say, China. More like the pace of a snail.
Who would have thought that compared to countries around the globe, the Philippines houses three (3) of the biggest malls in the world. We were even cited as an example for a recently concluded bond float.
Yet, all these new malls, new office buildings, and new BPO locators, are these all a product of pure luck? Had these BPO companies choose to locate elsewhere, where would the country get its source of employment? Other countries?
Sometimes, I can't help but be cynical. The middle class in the country are like invisible men and women. One moment they're in the middle class, the next time you visit them they're gone because they went down the economic ladder. In this country, where over 70% of total domestic spending is sourced from MONEY being sent in from outside the country, we are at the mercy of currency fluctuations.
And most of these remittances are spent on things, instead of being invested in the capital markets. Yet with the constant problems that face the country, it's difficult not to be disillusioned with the term "long term investing". What is in store for the Philippines, long term? More of the same? I shudder at the thought.
With the recent ouster of JDV, it casts doubts once again on the perennial problem that this country has had for years. And we're not talking about budget deficits or debt here, but of politics. It seems that with every one step forward we make, we make two steps backwards.
After our economy sprung a surprising 7.3% growth, I wonder, will this be sustained for 2008?
Sometimes, I am amazed at how even with the level of corruption, political mudslinging, smuggling, and brain drain that this country has, we still manage to see improvements in the country. You'd be blind if you said there are no improvements. It's just that we don't have the pacing of say, China. More like the pace of a snail.
Who would have thought that compared to countries around the globe, the Philippines houses three (3) of the biggest malls in the world. We were even cited as an example for a recently concluded bond float.
Yet, all these new malls, new office buildings, and new BPO locators, are these all a product of pure luck? Had these BPO companies choose to locate elsewhere, where would the country get its source of employment? Other countries?
Sometimes, I can't help but be cynical. The middle class in the country are like invisible men and women. One moment they're in the middle class, the next time you visit them they're gone because they went down the economic ladder. In this country, where over 70% of total domestic spending is sourced from MONEY being sent in from outside the country, we are at the mercy of currency fluctuations.
And most of these remittances are spent on things, instead of being invested in the capital markets. Yet with the constant problems that face the country, it's difficult not to be disillusioned with the term "long term investing". What is in store for the Philippines, long term? More of the same? I shudder at the thought.
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