VEHICLE sales of a group of importers climbed in the low double-digits last month on the back of brisk demand for passenger cars.
In a statement, the Association of Vehicle Importers and Distributors Inc (AVID) said its member-companies sold 2,675 units in February, 14 percent more than the 2,338 last year.
Last month’s performance brought the year-to-date tally to 5,866 units, up 18 percent from the 4,963 sold in the same two months of 2013.
Driving sales last month was the 26-percent increase in the number of passenger cars sold at 1,311 units from last year’s 1,043.
AVID attributed the uptick to sales of the Eon and Grand i10 models of Hyundai Asia Resources Inc (HARI).
The light commercial vehicle segment registered a slower five percent sales uptick at 1,364 units from last year’s 1,295.
“Sparked by unified drive of providing quality brand innovations, we at AVID remain committed to deliver value-rich experiences through premium customer service and pioneering world-class products,” the group’s president, Ma. Fe Perez-Agudo, said.
Reese Fernandez-Ruiz, the co-founder of fashion line Rags2Riches, used to have a clear-cut idea for an ideal career: graduate with the highest honors, get a high-paying job, do “amazing” things at work, get a master’s degree in business administration, retire, create a business, and when she became rich enough, give to charity. Although there is nothing wrong with following this path, Reese felt that it was not what she really wanted to do. Her calling actually started with a pet peeve. Reese is bothered by social inequality. She hates seeing people work hard their whole lives, only to end up at a dead end because they did not have the same opportunities that more privileged people have. Such “irritations”, according toher, can help people find their calling. Whether they are against involuntary hunger, racism, and other injustices, fighting for social justice can become a life profession. It was on a volunteering trip in Gabaldon, Nueva Ecija that made Reece decide what she will choose as a life profession. She met some of people there who have stayed hopeful despite crippling poverty and lack of opportunities. Reece spent Sundays helping build homes for landslide survivors, which resulted to an entire village of 100 new houses for several affected families. After college graduation, she would visitthe depressed areas in Payatas with some young professionals. That is where she met ‘Ate Ning’, a trash collector for 14 years and a mother of five children. The woman collected scraps of cloth and weave the scraps of cloth she found into foot rugs. She would sell them everyday butshe earned less than Php20 a day despite her hard work. “When I saw this, I got really mad,” Reece remembers. Scrap cloth handwoven by women from indigent communities were normally used for ordinary rugsfor doorways and bathroom floors of Filipino homes. Rags2Richesthought that these very same materials can be used in making luxury bags, which can be marketed to the high fashionmarket. The company has elevated the status of these textiles. They have also uplifted the lives of the people who had previously been selling these items at Php1 to Php2 a piece, earning a miserable Php10 to Php16 a day. Reecethought that there is something wrong with the fact that poor people who work hard earn so very little from their efforts, while there are people who easily get money through corrupt means. Believing that she has to correct this wrong, she formed Rags2Riches with several business partners. Their business model is simple but meaningful: ‘people, profit, planet, and positive influence’.
The company was put together in 2007, and it partners with artisans from all over the country, from the “mountains” of Payatas to the mountains of southern Philippines, giving them not just skills-training, but lessons in health, finances, and well-being, so they can help themselves out of poverty. The families involved were not just able to support their families, they also take pride in their work.TV personalities Bianca Gonzalez, Ces Drilon, and Liz Uy are seen wearing and using their products. Rajo Laurel, Amina Aranaz-Aluna, Oliver Tolentino, Olivia d’Aboville, and other designers are some of those who collaborated with Reese and her business partners in Rags2Riches. The company’s designer bags are a combination of fabric, leather, and metal. The designs are also reminders of the amazing stories about the people that the brand wanted to empower.
Reece says that it was a simple solution to a social problem, and an effectiveway to lift Filipinos out of poverty. The business has enabled the artisans to access the fashion bags market. In six years, they were able to uplift the lives of 900 artisans, distributing the latter’s work through 70 retail outlets in the country and in the international market. The mother of five,‘Ate Ning’, is now an empowered community member who trains others to weave scrap cloth and make fashion bags from them. Reese, as the company’s CEO,shares gladly that she wakes up every Monday morning happy to work in the company that she helped build. Not all people can say the same for themselves.Which a shame, according to the young social entrepreneur, as working days take up the majority of the week. Reece wanted not to be just successful, but to become significant in changing people’s lives for the better. As a young girl, she remembers going around different churches with her mother, a Catholic missionary worker. She encountered street children in the parishes, who became her friends. They played together and shared their dreams with oneanother. Many of them wanted to become doctors, lawyers, and teachers when they grow up.That one little girl eventually became a social entrepreneur, while the world lost potential doctors, lawyers, and teachers.
Reece doesn’t think she was better than them, but only that she had better opportunities. She has her own amazing story to share: a group of anonymous people, probably involved in the parishes her mother was working in, gave her a scholarship so that she could attend the prestigious Ateneo de Manila University. To this day, she has no idea who they are, but she is thankful nonetheless. Now, it’s her turn to do the same thing to those less fortunate. “No matter what we do, our decisions will affect someone in a positive or negative way,” she says. Asked what advice she would you give to aspiring social entrepreneurs, she says, “First of all, it is good to know that it is possible to be profitable and socially relevant at the same time. I would like to share to future social entrepreneurs that yes, it is possible. It is a viable life and career option for those who want to have a business and help others at the same time. If you do decide to take it on, the result could be world-changing! It may be daunting to start though so let me share with you some simple steps and tips. First, try to find your passion, then get together with a few like-minded friends, commit to some milestones (do not just have a vision, have a plan), and never, ever give up. It is not easy, but it is so worth it!”
THE country’s top rice-producing municipalities, cities and provinces, farmers and irrigators’ associations, and agricultural workers were honored by the Department of Agriculture in an awarding ceremony held at the Resorts World Manila, March 14.
This year’s Rice Achievers’ Awards conferred a total of over PhP110 million in prizes from the DA National Rice Program to 12 provinces, 48 municipalities and cities, 10 irrigators’ associations, three small water impounding system farmers’ associations (SWISAs), and 496 agricultural extension workers (AEWs).
For surpassing their palay (unhusked rice) production targets, attaining higher average yield, encouraging more farmers to use quality seeds and appropriate technologies, and prioritizing rice-related projects, the provinces of Nueva Ecija, North Cotabato, Nueva Vizcaya, Isabela, Pangasinan, Ilocos Norte, Bukidnon, Bulacan, Kalinga, Mindoro Occidental, Laguna, and Lanao del Norte were declared as the country’s top rice achievers for 2013.
Each of the provinces’ governors received a trophy and check worth P4 million for rice-related projects from Agriculture Secretary Proceso Alcala and National Rice Program coordinator and acting undersecretary for field operations Dante Delima.
The top municipalities and cities, including the exceptional IAs each received P1-million worth of project grants. Outstanding SWISAs got P500,000 each in project grants, while the leading AEWs took home a cash incentive of P20,000 each.
Alcala said the annual contest, now on its third year, is the government’s way of thanking the country’s rice farmers and their respective provincial and municipal officials and AEWs for their continuing efforts and contribution to increase rice production.
“The Agri-Pinoy Rice Achievers’ Awards is part of DA’s interventions and incentive system to encourage LGUs, IAs, SWISAs and AEWs to contribute their share in increasing farmers’ harvest and incomes, to attain national rice sufficiency,” the DA chief said.
The top provinces, cities and municipalities were chosen based on the following criteria: incremental increases in rice harvest and average yield per hectare over 2012 levels, increases over their 2012 targets, amount of budget devoted to rice projects and initiatives, number of farmers benefited, and degree of quality seed utilization, among others.
The combined palay production of the top 12 provinces amounted to 6.65 million metric tons (MMT), which represents about 36 percent of the country’s total harvest of 18.42 MMT last year.
Most Filipinos who work abroad as employees put all their time and effort to eight to five type of jobs for many years even for decades we might say, so that they could earn better to support their families and raise the capital they need for that dream business! They remain patient until the time they could finally rejoin their families in their homeland where they could retire and begin the next phase of their lives as even more productive citizens, seniors as they would be called, but not as employees anymore and not only as dependent members of the family, but as business-minded individuals who could contribute to the overall development of the country’s economy with their businesses that could employ a good number of fellow Filipinos.In these days, Filipinos are becoming even more learned about the significance of being business-minded. The opportunity for employment runs out at the age of 60-65, so the other option for retirees who envision active lives which is definitely more lucrative is to have their own businesses. However, the problem is that even though they have the funds to start-up businesses according to their interests, they seem to be hesitant about pursuing it, because of the challenges they might face in shaping their products and services, creating a business name, developing training, operation and production systems, and everything else under the word branding. It all appears to be overwhelming, because of the required attention on the details of doing business. Nevertheless, in franchising, problems that could possibly arise when doing business could be easier solved for senior citizens wanting to do business. Moreover, with the inevitable decrease in capability to deliver laborious and time consuming tasks in conducting one’s own business, the idea of franchising all seems to be very convenient, entirely beneficial and promising, because of its ready made plans, templates, and support system. Moreover, a franchised business is already popular, so if you are able to find the best location for it, you can expect that customers will come to you. If you are an Overseas Filipino Worker (OFW) and dreaming of having your dream business in the Philippines after many years of work, I would suggest that you invest your hard earned money through franchising if you would want to be saved from most of the hassles of creating your own unique business.
There is the Association for Filipino Franchisers Inc. (AFFI) which you may go to and ask for the latest activities and resources pertaining to franchising. The said association encourages Filipino business enthusiasts to patronize local franchises. According to Armando O. Bartolome who is the president of AFFI, ‘franchising is a booming business’. To give you a better idea, Bartolome mentioned about a previous record that stated the income from this industry which amounted to Php54 billion in 2012. In addition, he also said that, ‘Philippines reportedly ranked third among countries that investors are looking at to source potential franchises’. This year, prominent local franchisees are expanding their market reach in other countries. It only means that franchising really is tested to be viable and more importantly, profitable. The success of the franchising industry in the Philippines could be attributed to the fact that our country’s very own franchisees and other international franchisees are incredibly packaged for the newbie entrepreneurs.Depending on your financial capability and interest, there are numerous options to choose from ranging from various industries namely food and beverage (which is very much sought after), travel, convenience stores, pharmaceutical, clothing etc.Food carts cost approximately thirty thousand pesos (Php30, 0000) to even double of this amount. This is very cheap already considering what you would get which are basically what you would initially need when putting it up. You would not have to worry about what to use as equipment and materials, how to train your staff, produce products and where to get your supplies.
You only have to take care of all your operational costs which include rental fees, salaries to employees, electricity and water bill. If you opt for something which is of bigger investment, you can expect to need some Php1.2 million for Mang Inasal, Php30 million pesos for Jollibee, Php35 million for McDonalds, Php5 million to Php8 million for Figaro and Php5 million for Mocha Blends (full store).Considering franchising as your gateway to business is undoubtedly a practical way to succeed in the industry and not put your hard earned money to waste. To retirees, capitalization is at hand, because they could utilize their retirement funds. Aside from wanting to spend it to finance the kind of lifestyles they want when they retire, retirees could use it as investment capital. After all, return of investment and profitability from franchising is realizable.
General Santos City. The Department of Trade and Industry (DTI) in partnership with the Department of Energy (DOE) conducted an orientation on the DTI- DOE Bagwis Program for LPG Dealers. This was held on March 3, 2014 at the Phela Grande Hotel, Magsaysay Avenue, General Santos City.About forty (40) participants from Liquefied Petroleum Gas (LPG) dealers, retailers and members from the General Santos Consumer Welfare Council, Inc. attended the orientation.Engr. Arnel V. Sayco DTI-GenSan Officer-in-Charge, explained the significance of the program wherein deserving LPG dealers stand to be awarded with either a Gold or Silver Bagwis Seal of Excellence.Ms. Mary Ann Morales, DTI Division Chief, elaborated on the rationale of the program as giving recognition to LPG dealers that are compliant to all LPG-related trade laws implemented by both the Department of Trade and Industry and Department of Energy. A Senior Science Research Specialist of the Department of Energy- Mindanao Field Office, Ms. Nenita Uy, discussed the Department Circular No. DC 2014-01-0001 “Providing for the Rules and Regulations Governing the Liquefied Petroleum Gas (LPG) Industry.”In her closing remarks, Ms. Asuncion Rodriquez, President of General Santos City Consumer Welfare Council, Inc. expressed hope that with the DTI-DOE Bagwis Program, LPG dealers may be more responsible and provide safe and quality products and services to consumers.
By William Dipasupil
THE economy will fall not because President Aquino is a poor manager but because of some politicians who are protecting the interests of big businesses, according to a consumer protection group. The Movement Against Business Abuses (MBA), an alliance of consumer protection advocates, was reacting to an earlier statement by Sen. Serge Osmeña blaming the President and Energy Secretary Jericho Petilla on the country’s power woes. “If there’s somebody that should be blamed for the country’s problem on electricity, it is Senator Serge Osmeña III, who obviously is protecting the rape of the economy by big businesses,” the group said. Osmeña, they said, has been remiss in his duty as a lawmaker in helping address the country’s problem on thinning power reserves, much more as chairman of the Senate energy committee. “He failed to recommend amendments to EPIRA which is the primary cause of our power problems,” MBA added. Republic Act No.9136 or the Electric Power Industry Reform Act of 2001squarely puts the burden of protecting the interest of consumers and ensuring competitiveness in a deregulated industry on the shoulders of the Energy Regulatory Commission (ERC). The ERC was created to promote and protect long-term consumer interest in terms of quality, reliability and reasonable pricing of a sustainable supply of electricity. The group pointed out that the recent order by the ERC to void spot market prices of electricity generated and sold to Meralco last December and January were clear indications that the government is aware of the real purpose of regulatory functions. The Movement said that it is about time that the real cost or electricity and how it is computed should be made public, which could be done by amending certain provisions of the EPIRA law. As chair of the Senate energy committee, they said, Osmeña may introduce the amendments so that the power generators and distributors would be compelled to make public how they arrived at on the cost of electricity being charged to the consumers. “Investors in the energy sector had for decades held hostage the government and consequently the users of electricity by threats of brownouts every time their greed driven profits are threatened,” the MBA spokesman, lawyer Rey Cardeno, said. Cardeno pointed out that the consumers had always been on the losing end and ended up paying more every time Meralco pushed for another round of power rate increase before the ERC. “We were convinced, then, that the ERC was in the pockets of Meralco,” he said, adding that “unless this is a trick, and ERC and Meralco has perfected several tricks against consumers, we are looking forward to a new directions at the ERC and the Department of Energy.” But now, he said, that the ERC is being true to its functions by ordering a review and recalculate the cost power that Meralco wants to pass on to consumers, the national leadership, including Osmeña, should support the peoples’ demand for transparency on the actual cost of electricity.
Young entrepreneur Richard Sanz started out with nothing but a business concept and his gut feel. Going by personal instinct and intuition has been considered too risky by many business people. In Richard’s case, it has proven him right in the long run, because he now rules one of the most successful food businesses in the country.
He started his venture in 2004. “I was 23 years old when I resigned from my engineering job in a multinational firm. It was a risky decision as I had a family to provide for, but I went ahead because I was young and excited to have my own business.” He remembers his mother making iced tea from tea leaves and water. With that dearly-held childhood memory, Sanz collected Php120,000 worth of capital from personal loans and created Tea Square, the Philippines’ first specialty iced tea brand.The first Tea Square branch was opened at the Alabang Town Center in Muntinlupa City.
“We are confident that through focused development and brand-building, we can get a respectable market share in three to five years,” he shares. Despite the fact that most food businesses rely on the tried-and-tested iced tea prepared from powder, Richard Sanz has successfully popularized a line of all-natural tea beverages. Food Asia Corporation, his company, currently has four brands and 80 retail outlets nationwide, and has experienced revenue growth of over 1,000 percent during the past years.
“My target was the upscale, health-conscious AB market. Since I had a low budget, I developed my own products based on what I felt the market would enjoy. I also designed the cart, and learned how to use Adobe Photoshop to create my company’s logo and marketing materials. The entire setup took two weeks,” Richard narrates.
“Since I only had one employee, I did all the marketing, accounting, and other tasks myself. But it made me so proud to see people frequenting the store–between 50 to 100 customers came each day, probably out of curiosity. The good thing, though, is we were able to translate that curiosity into continuous sales.”
One way to ensure business success is to to educate the public about one’s products. Richarddid taste tests and set up in-mall posters informing the consumer of tea’s health benefits, such as boosting one’s immune system, preventing cancer, and reducing high blood pressure. He also had the creative idea to use ‘LoyalTea’ cardsto attract more customers. Richard believes in excellent customer service. To show his dedication in satisfying customer demand, he printed his personal cellular phone number on all packaging materials. If that isn’t engaging with your market on a very personal, down-to-earth manner, we don’t know what is.
Tea Square has grown to twenty branches nationwide. “I was able to recover my initial investment in only six months and repay my loans within a year,”Sanz proudly says.
In 2006, not wanting to rest on his laurels, Sanz sought to venture into the bibingka business. His idea is so simple and yet quite effective. “My family likes eating bibingka, but sometimes, we can’t finish a whole serving. So I thought of making smaller portions.” He called it as Bibingkinitan!, a combination of‘bibingka’ with ‘balingkinitan’, which means small or petite in Filipino.
At Php20 per piece, Bibingkinitan! rice-flour cakes are accessible to the mass-based broad C market. It has classic and flavored variants of the classic bibingka recipe, including chocolate, cream cheese, and macapuno.The mini-bibingkas sold like hotcakes. According to Richard, “Bibingkinitan! is the country’s leading bibingka chain today in terms of revenue and store number. It’s also our bestselling brand. We now have over 60 Bibingkinitan! branches.”
One would think that another business success would leave an entrepreneur to settle down, but not Richard, who seems to be quite a natural in handling a business venture. One year after Bibingkinitan!’s launch, he opened another upscale outlet called Bibingka Cafe at the Alabang Town Center in December 2007. Its menu consists of bibingka ala mode, champorado, salabat, tsokolate,and barako coffee, all classic Filipino comfort food and beverages,offered at very affordable prices. Not to be stopped, he opens three more branchesin 2008 at SM North EDSA, SM Clark, and SM Mall of Asia.
To further grow his flourishing business empire, Richardcreated another business division. Calling it Fresh-Foods, its first product offerings are ready-to-eat and ready-to-cook frozen foods, like Stuffees stuffed bread and tilapia ala pobre, as well as fresh poultry produce, like fresh white eggs, red duck eggs, and fresh chicken.
SM Supermarket was impressed with the company’s products and marketing efforts, and offered the opportunity for Richard to develop a brand of consumer food products for the broad C market. These products are now being distributed in major SM supermarkets and hypermarkets nationwide.
Richard notes that FreshFoods’s competition is much more formidable than those of their retail brands, but he remains confident about it. “We are confident that through focused development and brand-building, we can get a respectable market share in three to five years.”
FoodAsia presently has a workforce of almost 100 employees and occupies a 100square meter office in Muntinlupa City. Both Tea Square and Bibingkinitan! have begun franchising, with its combined 20 franchised outlets comprising roughly 25 percent of the current total stores. “We want to establish a presence in all towns in the Philippines,” Sanz says.
In today’s globally-oriented world, an entrepreneur should be able to think in more global perspective. “Innovation is part of our strategy. The product itself is an innovation because we changed the landscape for bibingka. I want to make Bibingkinitan a global brand. All the other food from other countries like Italy, Japan, Vietnam and Thailand are available locally but we have to establish distribution of Filipino food abroad. My dream is to make this Philippine delicacy known globally through Bibingkinitan. We have inquiries in Jakarta, Singapore and Hong Kong today. Hopefully it’s a first step,” the founder of the country’s first bibingka empire says.
In line with its Doing Business in Free Trade Areas (DBFTA) information campaign, the Department of Trade and Industry (DTI) recently conducted a consultation and workshop with the education sector on the Philippine Qualifications Framework (PQF).
“Through this activity, we intend not just to develop and disseminate information on the features and components of the PQF but more importantly tackle the framework’s impact on education, industry, professionals, skilled labor and employers, and related issues,” DTI Undersecretary Ponciano C. Manalo, Jr. said.
The PQF is a national policy that describes the levels of educational qualifications and sets the standards for qualifications outcomes. The institutionalization of the Philippine Qualifications Framework (PQF) or Executive Order No. 83 Series of 2012 was signed by President Benigno S. Aquino III on October 1, 2012.
The activity was organized through the Bureau of Export Trade Promotion (BETP) and the Philippine Trade Training Center (PTTC), an attached agency of the Department of Trade and Industry (DTI), in partnership with the Professional Regulation Commission (PRC). It was also supported by the ASEAN Australia New Zealand Free Trade Area Economic Cooperation Work Program (AANZFTA ECWP).
Participants included representatives of various institutions and organizations of the education sector, and officials of the Professional Regulation Commission (PRC), Technical Education and Skills Development Authority (TESDA) and Commission on Higher Education (CHED).
“To back the national and international mobility of workers through increased recognition of the value and comparability of the country’s qualifications, the PQF is aligned with international qualifications framework,” Manalo said.
During the activity, a comprehensive discussion on the Philippine Qualifications Framework (PQF) and the ASEAN Qualifications Reference Framework (AQRF) was presented by Teresita R. Manzala, chairperson of the PRC. Manzala is also the chairperson of the ASEAN Task Force on the (National Qualifications) ASEAN Qualifications Reference Framework.
The AQRF provides opportunities to open up large market for goods, skilled labor and professionals. It is a common reference framework that provides a device to enable comparisons of qualifications across participating ASEAN countries.
Manzala mentioned the importance of encouraging the development of national approaches to validating learning gained outside formal education and enabling comparisons of qualifications across member countries that will support recognition of qualifications. In doing this, the AQRF will be able to promote and encourage education, learner and worker mobility, and higher quality qualifications systems.
The ASEAN member states agreed that 2018 is target year for referencing national qualifications frameworks with the ASEAN Qualifications Reference Framework.
by Enrique Soriano
IN a family business, conflicts arise and it is but natural. Like in any other groups of people, the members of the family have their own perceptions, personalities and ways. These differences create divisiveness and lack of peace in the family business. On the positive note, peace can be made possible if the family members will know what factors determine peace and consider them all the time.
Determinants of Peace in the Family Business
Peace in the family business entails a set of core values, philosophy, common vision and mission, respect, commitment to duty, tolerance, open-mindedness and forgiveness.
Core Values and Philosophy
Peace is the result of good values. Values are rooted first in the family. It makes sense to think that in a family business, peace can be attained. Develop a set of core values which the family adheres to in unity. What do you think are the things that are important to your family in terms of character, ethics, service and professionalism? Are these positive qualities that can better shape the relationship within the family and with everybody else working for the company including non-family members? Come-up with a philosophy that suggests the prevention of problems. Prevention is always better than cure. Incorporate the family values into the philosophy so that it will be the guiding principle of the members of the family in all business dealings. The core values and philosophy of the company will have to remain in the hearts and minds of the members of the family, so that peace can begin intrinsically and be evidently seen in the business environment.
Common Vision and Mission
The peace in the family business can be disrupted when the motivations and objectives of the members of the family are not common. Set the vision and mission of the company, before allowing everyone to do their thing. Never assume that everyone in the family already knows the direction of the company. Conduct an orientation about it especially about why it is so. Always remind about the short-term and long-term goals of the family business. As time passes by, people may tend to forget or may tend to change courses, so it is advisable to mention about the company’s vision and mission when possible, because this is why you are all together in the business. There may be times when some members of the family will debate about things that are not in line with the vision and mission of the company. Such instances can become the source of resentment, when in fact it should not be part of the operations to make the family business successful.
Respect is giving high regard towards the name and image of the family business including that of its workers and of the dignity of the family. Family members ought to be mindful of their thoughts, words and actions, because it can affect how the public will view the company and the unity of the members in the family. Advise the members of the family, that when in a difficult situation, ask questions to themselves as to whether they are at the right place and time, have already reflected about the ideas they have in mind, have wisely chosen their words, and have certainly decided about what to do.
Honoring the family council, reporting to the assigned authorities, listening to the advice of non-family managers and mediators, and abiding with the rules that delineate the boundaries between family concerns and business matters are opportunities to exhibit respect. Respect results to peaceful interactions. Its practice can be possible when respect is demonstrated and when the members of the family have respectable conduct.
Commitment to Duty
There is peace when the members of the family are committed to their duties, because it lessens the chances of conflicts if expectations are not met when tasks are not completed. When someone fails to be responsible, it is a chain reaction. Someone else will have to suffer the consequences and sacrifice for that failure to deliver. In order to stress on this, develop a family participation plan wherein the roles will be clearly stated and duties completely described including time-frames. Identify the family’s expectations and success indicators of the business.
Conduct regular meetings, because attendance and contribution to these proves one’s commitment to duty. In family business meetings, topics about the governance of the company, objectives, expectations, rights to stocks, profit distribution, training, policies and product/service development among many others can be discussed.
Peace is having tolerance. Allowing the members of the family to have reasonable options and to do what makes them creative and empowered is practicing tolerance. Gain control over the family business by not imposing, but by inspiring the members of the family to prevent and solve problems in their unique and efficient ways. Provide opportunities to be honest and healthily assert one’s thoughts and express feelings and preferences during family business meetings.
Open-mindedness and Forgiveness
Being open-minded gives way to forgiveness. Emphasize on the importance of admitting one’s mistake/s, apologizing and forgiving to maintain harmonious relationships within the family business.
By Miguel Raymundo
NOT just ironic, but unpatriotic as well.
While the government has been hard put wooing foreigners to invest in the capital-starved Philippine economy, the country’s elites are doing the opposite—taking their money abroad. Mind boggling, the capital flight has gone unabated for decades, largely running to billions of pesos in foreign exchange which could have been used to create jobs in an impoverished nation.
Yet, the moneyed few had gone on a splurge as it were coming from a country where average daily wage is a paltry US$7-10 and poverty remains widespread. Based on the latest Bangko Sentral ng Pilipinas (BSP) data, the few rich and famous took out nearly US$7 billion as of December 2012, a figure which has been rising over the past years. Meant for investments in the offshore capital market, the money found its way to the United States, China and other countries where returns are relatively higher than in the home front.
Equity-linked securities and other debt issues accounted for the bulk of the money placements by Filipinos abroad, many of them among the country’s richest such as ethnic Chinese taipans Henry Sy, Lucio Tan and John Gokongwei. The three tycoons, who all trace their roots to China, have sizeable investments in China, ranging from property to retail, banking and finance and manufacturing.
Capital flight is the movement of capital from a resource-scarce developing country to other countries due to political and economic reasons. Statistics showed that capital flight from the Philippines began in the 1970s at the height of martial law which amounted to US$16 billion, rising to US$36 billion in the 1980s, and US$43 billion in the 1990s. Undoubtedly, these figures are significant amounts of lost resources that could have been utilized in the country to generate additional economic output and jobs.
Based on some technical studies, capital flight from the Philippines followed a revolving door process–that is, capital inflows were used to finance the capital outflows. This process became more pronounced with government’s adoption of financial liberalization in the 1990s. Thus, it may be argued that capital flight resulted obliquely in the hollowing out of the Philippine economy.
Alarmed by a capital plight that has sapped the economy of its financial strength, the BSP has warned it would enforce “contingency measures” to stem the rising outflow of money. In times of uncertainty, the BSP has standby powers to provide foreign exchange liquidity through the spot and swap markets as well as hedging facilities and granting temporary and limited regulatory forbearance to banks. Under its legal mandate, the BSP may also opt to relax the banks’ access to rediscounting facilities, or tweak reserve requirements, among others.
Overall, the BSP wants to minimize the impact of capital outflows and ensure that liquidity remains adequate to fuel the economy’s requirements. In its analysis, French bank Credit Agricole says the BSP is faced with “a tough task of managing the ripple effects” of the US Federal Reserve’s decision to withdraw its economic stimulus. “We anticipate significant outflows of portfolio capital from the Philippines, which will reduce the availability of funding needed for growth,” it said. Capital flight currently experienced by emerging markets such as the Philippines is due to the US Federal Reserve’s impending tapering of its massive bond buying as the US economy gains traction. The adverse effects of the recent developments abroad have already been felt in the Philippines: The peso depreciated, the stock market wiped out gains, and spreads on Philippine debt widened.
Analysts say these asset market effects are largely temporary and may be viewed as a healthy correction that may have helped defuse the risk of an actual build-up in financial imbalances. However, the bigger concern with capital flows is the “excessive volatility” that could easily impact business activities and even the financial system. The BSP’s strategy has been geared toward increasing the economy’s resilience against the risks posed by both capital inflows and outflows anchored on promoting non-inflationary growth and safeguarding financial stability. It is also keeping an eye on capital inflows in case they might form asset price bubbles. But more revealing are data in the United Nations Conference on Trade and Investments’ World Investment Report 2013 showing the extent of capital fleeing from the Philippines.
In 2012, a whopping US$1,845 million was shipped out of the country, the biggest outflow since 2008. It was more than the US$1,816 million invested by foreigners in the country the previous year. This was despite that the economy chalked up an impressive 6.8 growth rate that prompted foreign credit rating agencies to give the Philippines an investment grade rank. The 2012 capital outflow raised the Filipinos’ stock of investments abroad to a whopping US$9 billion, equivalent to 29 percent of foreign investments in the country. Against that backdrop, one can’t avoid but speculate: Is the Philippines’ elite expecting a political or economic upheaval in the remaining two and a half years of President Aquino? Apparently, they feel that parking their funds abroad is safer than in their own country. Analysts recall two instances in recent history when Filipinos’ capital investments abroad breached the US$1 billion mark. In 1984, the Philippines suffered its worst political and economic crisis sparked by the global debt crisis and the assassination of Senator Benigno Aquino in August of the previous year. There was also a US$579 million blip in 2004 due to the economic elite’s worry that the jailed Joseph Estrada’s proxy, Fernando Poe, Jr., would win the presidential elections that year.
The second was in 2007 when the Asian financial crisis set in, leading to an exodus of capital from the Philippines.
The UNCTAD data also show that while foreign direct investments (FDI) into the Philippines increased to US$2.8 billion in 2012 from US$1.8 billion the previous year, the country lags far behind its Asean neighbors. In that year, Indonesia got $20 billion; Malaysia, $10.1 billion; and Thailand, $8.6 billion. The Philippines’ key rival now as a preferred investment site is Myanmar which nearly had the same FDIs as the Philippines’ US$2.2 billion in 2012. Based on the UNCTAD’s survey of 159 global companies, the Philippines in 2012 was ranked 19th attractive site for investments, way below Indonesia, which is ranked 4th; Thailand, 8th; and Vietnam, 11th. After over three years of Aquino’s daang matuwid rhetoric, the Philippines finds itself sinking deeper in a financial quagmire exacerbated by political uncertainties in the years ahead.