Monday, December 19, 2011

Jobs: The Best Gift for the Filipinos

Jobs: The Best Gift for the Filipinos
By: Arnel L. Cadeliña

Labor is the most important asset of the poor hence economists assert that the determinants if a country is rich or poor is by checking mainly the unemployment and the underemployment rate . Ramon (not his real name) has a degree in sociology he earned two years ago. He submitted his resume to more than 60 companies and after several interviews still there were no job offers. He cannot believe the claimed of the government that they created 2.1 million new jobs and that the unemployment in the Philippines hit a four-year low of 6.4 percent. Ramon is now applying as a service crew of a fast food chain and he will be paid by the hour making him an additional member of the more than 4 million underemployed in the country.

Looking closely with the employment figures it is true that unemployment decreased but the quality of jobs they reported asserted that these are low quality jobs that will not help lessen the poverty in the country. Added to that, according to Prof. Benjamin E. Diokno of the UP School of Economics the 500,000 new jobs were in the nature of unpaid work in family-owned businesses.

As a professor who is connected to a school whose vision is to serve the poor, I have seen how poverty crippled a family in our immersion activities. But I came into a conclusion that the basic problem of the poor is not so much lack of employment but the low wages and the underemployment of the parents. Their penchant of unwanted pregnancies linked to their persistent poverty. According to Asian Development Bank the low wages, underemployment and too many mouths to feed of a family reduces growth savings and reduces funds available for investment in productive capacity. This underinvestment will result in a domino effect of reduces in overall economic growth and prospects for poverty reduction.

Source: NSO Labor Statistics, October 2011 (retrieved December 20, 2011)

It is not a surprise then that the Philippines ranked among the highest in terms of unemployment in the ASEAN region.

The best gift then this Christmas and new year is to help somebody to have his/her own job. What then we need to do in order to create more jobs in the country?.

Here are some actions we can consider:

1. In agriculture, buy local fruits, vegetables and meat. We have seen a rapid increase in imports of basic necessity commodities especially from China. Buying and selling of local food is beneficial not only to the producers and buyers but also for the nation as a whole. Local food purchases happen to be cheaper because there is slashing of expenditure on transportation and warehousing. As far as the national economy is concerned, there has always been an impetus to local food markets since it helps to curtail the drainage of cash reserves on account of import payments. All that we wanted to cook for our next meal was right there in our public market. Our local food products are definitely fresher due to their proximity of our farms to our markets. Your buying of our own agriculture products will create more jobs.

2. Help our local and national government in their governance. A weak and inefficient state is unable to efficiently deliver the necessary services to its population as a result of low capacity. Pay your correct taxes and support the police in maintaining peace & order. Your taxes will create more jobs.

3. Petition our president, senators and congressmen to initiate work programs that will employ huge numbers of unemployed to take a minimum wage paying civil service job like cleaning and maintaining schools, nursing homes, roads, and museums among other jobs. To prevent fraud and abuse, the program should be accurately measured and track results, This is what Germany did to avoid the recession. Your petition will influence them to create more jobs.

4. Adopt and implement the 22-Point Labor and Employment Agenda of the Department of Labor and Employment. This is the platform and policy pronouncements on labor and employment over-arching goal:Invest in our country’s top resource, our human resource, to make us more competitive and employable while promoting industrial peace based on social justice.

This is Christmas and those who are gainfully employed should be thankful and those who are still looking, just like Ramon, don't lose hope. The gift is there waiting and the best thing is to never give up: stand up and fight for the right to live a full life even when challenged by uncertainty.

My best wishes always.

Arnel L. Cadeliña

Monday, November 28, 2011

Investing in Skills

In my rush of daily office and teaching life it is easy to be overwhelm in grades, meetings and day-to-day business. One night when I step back one question popped in my head: " Am I preparing my students for the world they will face upon graduation?".

The beauty of having experience in the corporate and academe is that you possess the ability to understand both world. Connecting these world is like merging two rivers and the merging point results to a bigger one.

To navigate a turbulent river will require skills and putting it in analogy: to navigate the future will require skills.

The following then are the skills:

1. Knowledge on the major subjects . They must be firmly grounded in Finance content knowledge if they major in Finance. The process is the same whatever major they choose.

2. Flexibility. They should develop their skills to cope in rapid change of tasks or job description. The world now is different and job conditions may be subjected to exponential change.

3. Critical Thinking and Problem Solving skills. In the workplace, you will decide based on limited information. Students should be trained to solve problems mostly should be a complex one.

4. Communication and collaboration skills. Nothing beats skills in writing and oral communication because this is important in an increasing technology usage.

5. Self-management and IT literacy. Students must know how to set personal goals and use various IT software relevant to his/her profession.

6. Values. Telling the truth and acting based on respect & honesty are highly valued in an effective organization. Those who practices good values are always rewarded.

The students should invest on the above skills and teachers like me should be updated to meet the needs of the modern economy.

Arnel L. Cadeliña

Thursday, October 20, 2011

Occupy Classroom

There is a current wave in the US and Europe wherein people chanted to occupy wall street to express their anger on the excesses of capitalism. Their actions were the result of seething anger due to excessive greed and profit of capitalism.

In the Philippines, the movement should be occupy classroom. There is now a huge gap between the poor and the rich in the access of quality education. The average tuition fee in a private tertiary education cost around P35,00-55,000 per semester. . Even in the premier state run university the tuition fees go as high as P20,000 per semester. When you add the students allowance, dormitory and daily expenses, the cost becomes prohibitive to the majority of the Filipinos

We are in the brink of creating a society where people are less skilled and where drop-outs are familiar stories. We are teetering toward a failed state.

To reverse this, the government should invest more and deliver more funds to our Basic Education. Specifically from kinder to Grade 6 where the love of knowledge and the acquisition of skills are critical  The result may not be quick but it can reverse the backward trend engulfing all of us.

Then strengthened the high school by offering math and science courses that will prepare them to take courses that will help the country to manufacture goods for the locals and for the foreigners to buy.

A country without a competitive manufacturing sector has no comparative advantage.

The only way to go up is to create things we will use and foreigners will buy. This is the only method to create jobs, opportunities and wealth for the majority. The current state of the country, where OFW remittance and service sector such as BPO, are the only factors that oiled our economy is not sustainable in the long run.

We need to occupy classroom by investing more to the education of our youth and the saving grace will be math and science.   

Monday, October 10, 2011

Tribute to F. Sionil Jose

I am an avid reader of F. Sionil Jose's articles. The man is 86 years old but his writings are for the young Filipinos to ponder. He is a national artist for literature and his ideas are refreshing to the Filipino soul. This is my tribute to him while he is still alive.

Thank you Mr. Jose you are the conscience that keep me grounded to the the truth.
To the my blog readers, the article below is related to being an investor. May you be touched!.

Why are Filipinos so Poor?
In the ’50s and ’60s, the Philippines was the most envied country in Southeast Asia. What happened?
By F. Sionil Jose

What did South Korea look like after the Korean War in 1953? Battered, poor – but look at Korea now. In the Fifties, the traffic in Taipei was composed of bicycles and army trucks, the streets flanked by tile-roofed low buildings. Jakarta was a giant village and Kuala Lumpur a small village surrounded by jungle and rubber plantations. Bangkok was criss-crossed with canals, the tallest structure was the Wat Arun, the Temple of the Sun, and it dominated the city’s skyline. Ricefields all the way from Don Muang airport — then a huddle of galvanized iron-roofed bodegas, to the Victory monument.Visit these cities today and weep — for they are more beautiful, cleaner and prosperous than Manila. In the Fifties and Sixties we were the most envied country in Southeast Asia. Remember further that when Indonesia got its independence in 1949, it had only 114 university graduates compared with the hundreds of Ph.D.’s that were already in our universities. Why then were we left behind? The economic explanation is simple. We did not produce cheaper and better products.

The basic question really is why we did not modernize fast enough and thereby doomed our people to poverty. This is the harsh truth about us today. Just consider these: some 15 years ago a survey showed that half of all grade school pupils dropped out after grade 5 because they had no money to continue schooling.Thousands of young adults today are therefore unable to find jobs. Our natural resources have been ravaged and they are not renewable. Our tremendous population increase eats up all of our economic gains. There is hunger in this country now; our poorest eat only once a day.But this physical poverty is really not as serious as the greater poverty that afflicts us and this is the poverty of the spirit.

Why then are we poor? More than ten years ago, James Fallows, editor of the Atlantic Monthly, came to the Philippines and wrote about our damaged culture which, he asserted, impeded our development. Many disagreed with him but I do find a great deal of truth in his analysis.This is not to say that I blame our social and moral malaise on colonialism alone. But we did inherit from Spain a social system and an elite that, on purpose, exploited the masses. Then, too, in the Iberian peninsula, to work with one’s hands is frowned upon and we inherited that vice as well. Colonialism by foreigners may no longer be what it was, but we are now a colony of our own elite.

We are poor because we are poor — this is not a tautology. The culture of poverty is self-perpetuating. We are poor because our people are lazy. I pass by a slum area every morning – dozens of adults do nothing but idle, gossip and drink. We do not save. Look at the Japanese and how they save in spite of the fact that the interest given them by their banks is so little. They work very hard too.

We are great show-offs. Look at our women, how overdressed, over-coiffed they are, and Imelda epitomizes that extravagance. Look at our men, their manicured nails, their personal jewelry, their diamond rings. Yabang – that is what we are, and all that money expended on status symbols, on yabang. How much better if it were channeled into production.

We are poor because our nationalism is inward looking. Under its guise we protect inefficient industries and monopolies. We did not pursue agrarian reform like Japan and Taiwan. It is not so much the development of the rural sector, making it productive and a good market as well. Agrarian reform releases the energies of the landlords who, before the reform, merely waited for the harvest. They become entrepreneurs, the harbingers of change.

Our nationalist icons like Claro M. Recto and Lorenzo Tanada opposed agrarian reform, the single most important factor that would have altered the rural areas and lifted the peasant from poverty. Both of them were merely anti-American.

And finally, we are poor because we have lost our ethical moorings. We condone cronyism and corruption and we don’t ostracize or punish the crooks in our midst. Both cronyism and corruption are wasteful but we allow their practice because our loyalty is to family or friend, not to the larger good.
We can tackle our poverty in two very distinct ways. The first choice: a nationalist revolution, a continuation of the revolution in 1896. But even before we can use violence to change inequities in our society, we must first have a profound change in our way of thinking, in our culture. My regret about EDSA is that change would have been possible then with a minimum of bloodshed. In fact, a revolution may not be bloody at all if something like EDSA would present itself again. Or a dictator unlike Marcos.
The second is through education, perhaps a longer and more complex process. The only problem is that it may take so long and by the time conditions have changed, we may be back where we were, caught up with this tremendous population explosion which the Catholic Church exacerbates in its conformity with doctrinal purity.We are faced with a growing compulsion to violence, but even if the communists won, they will rule as badly because they will be hostage to the same obstructions in our culture, the barkada, the vaulting egos that sundered the revolution in 1896, the Huk revolt in 1949-53.

To repeat, neither education nor revolution can succeed if we do not internalize new attitudes, new ways of thinking. Let us go back to basics and remember those American slogans: A Ford in every garage. A chicken in every pot. Money is like fertilizer: to do any good it must be spread around.Some Filipinos, taunted wherever they are, are shamed to admit they are Filipinos. I have, myself, been embarrassed to explain, for instance, why Imelda, her children and the Marcos cronies are back, and in positions of power. Are there redeeming features in our country that we can be proud of? Of course, lots of them. When people say, for instance, that our corruption will never be banished, just remember that Arsenio Lacson as mayor of Manila and Ramon Magsaysay as president brought a clean government.We do not have the classical arts that brought Hinduism and Buddhism to continental and archipelagic Southeast Asia, but our artists have now ranged the world, showing what we have done with Western art forms, enriched with our own ethnic traditions. Our professionals, not just our domestics, are all over, showing how accomplished a people we are!

Look at our history. We are the first in Asia to rise against Western colonialism, the first to establish a republic. Recall the Battle of Tirad Pass and glory in the heroism of Gregorio del Pilar and the 48 Filipinos who died but stopped the Texas Rangers from capturing the president of that First Republic. Its equivalent in ancient history is the Battle of Thermopylae where the Spartans and their king Leonidas, died to a man, defending the pass against the invading Persians. Rizal — what nation on earth has produced a man like him? At 35, he was a novelist, a poet, an anthropologist, a sculptor, a medical doctor, a teacher and martyr.We are now 80 million and in another two decades we will pass the 100 million mark.
Eighty million — that is a mass market in any language, a mass market that should absorb our increased production in goods and services – a mass market which any entrepreneur can hope to exploit, like the proverbial oil for the lamps of China.
Japan was only 70 million when it had confidence enough and the wherewithal to challenge the United States and almost won. It is the same confidence that enabled Japan to flourish from the rubble of defeat in World War II.

I am not looking for a foreign power for us to challenge. But we have a real and insidious enemy that we must vanquish, and this enemy is worse than the intransigence of any foreign power. We are our own enemy. And we must have the courage, the will, to change ourselves.

F. Sionil Jose, whose works have been published in 24 languages, is also a bookseller, editor, publisher and founding president of the the PhilippinesÕ PEN Center. The foregoing is an excerpt from a speech delivered by Mr. Jose in Manila, Philippines.

Thursday, October 06, 2011

Monday, October 03, 2011



Recently I was given a copy of the Philippine Human Development Report 2008/2009. The book was published by the Human Development Network and the UN Development Programme. The analysis and perspectives brings an in depth analysis of Human Development of Philippine provinces.

I made an extract of the report focusing on Quezon Province to benefit the students, researchers, faculty, Quezonians and friends of Quezon Province. The data will bring you enlightenment as well as righteous anger. I will be remiss on my civic duty if I will not inform you on what is happening in Quezon Province. It is but proper first to give thanks to the Human Development Network headed by Arsenio M. Balisacan for the data. Though their research was dated 2006 the relevance is unquestionable. 



A long and healthy life is proxied by achievements in life expectancy at birth.
The average Quezonians are expected to live 67.5 years.
The longest among Filipinos are those born in la Union who are expected to live 74.6 years while those born in Tawi-Tawin have the shortest at 53.4 years old.

The knowledge are measured as a weighted average of the high school graduate ratio and the basic education enrollment rate.
Quezon province high school graduate ratio is only 48%. Fellow CALABARZON province Cavite has 73.7% while Laguna has 72.5%. The percentage shows that there is a high dropped out rate in Quezon Province.


The per capita income in Quezon Province is P16,827. Fellow CALABARZON, Laguna is P30,838, Batangas is P23,465.

In a summary the measure of human development that seeks to measure the average achievement are in three basic dimensions of human development: a long and healthy life, knowledge and a decent standard of living. Quezon was ranked number 58 out of 77 provinces. Let us see the comparative data:
Rank   Province
2         Rizal
3        Cavite
5        Laguna
15      Batangas
58      Quezon

If Quezon Province was a country, how would it fare against other countries in Human Development Index?
HDI     Province/Country
0.684   Quezon
0.684    Tajikistan
0.670    South Africa
0.646    Morocco
0.634    Namibia

Human Poverty Index

Poverty incidence is a general measure of well being. It is defined as the proportion whose income falls below a specified poverty line. The poverty line is the amount of money just sufficient to meet a person’s most basic food and nonfood needs.

Year       %
2006     43.7
2003     32.3
2000     28.6
1997     30.3

From the above record, it is very clear that the incidence of poverty in Quezon Province is on upward trajectory. This only means that 43.7% of Quezonians are having difficulty of meeting his most basic food and nonfood needs.

Now let us compare the data with our neighbor, Batangas.

Year     %
2006    23.3
2003    25.6
2000    14.9
1997    17.4

Though the poverty index is also increasing in Batangas, the 23.3% is still much lower to Quezon’s 43.7%..


Quezonians born in 2006 are expected to live 67.5 years.

In terms of Human Development Index, Quezon Province is ranked number 58 in the country, the lowest in CALABARZON. Laguna is number 5 while Batangas is 15.

Our per capita income is the lowest in the CALABARZON contributing to the highest poverty Incidence of 43.7%. Laguna has 9% incidence while Batangas has 23.3%.

Our Human Development Index is comparable to Tajikistan.

The people of Quezon Province is on a downward slide in terms of income and upward swing in terms of poverty, It is time for the Quezonians to help the province in every way and anyway they can. We are just a statistics away from Namibia.

Arnel L. Cadeliña

Tuesday, September 20, 2011


The Securities and Exchange Commission has approved last week the participation of PSE in the Southeast Asian Trading Platform. This platform will facilitate trading of Philippine stocks to Malaysia, Singapore and Thailand.

Initially 30 biggest and most liquid stocks would be brought for cross-border trading.

The countries are the Philippines, Malaysia, Singapore and Thailand

The stock exchange are the Philippine Stock Exchange (PSE), Bursa Malaysia (BM), Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET).The four will be electronically interconnected

Benefits for Philippine companies will be the trading of their listed securities to the 3 ASEAN nation.

Benefits for stock buyers, the possibility of buying stocks of the 3 ASEAN nations like:
1. Malaysia -Maybank, Sime darby, CIMB Group, Public Bank and Maxis

This platform will change the landscape of stock trading in our country.

Arnel L. Cadeliña

Tuesday, August 30, 2011

Laws that will affect our investing strategies

The following are the capital market legislation we are waiting to be implemented:

1. Personal Equity Retirement Account (PERA) Act- encourage the accumulation of savings and investments to augment inadequate pension and retirement benefits. Status: Approved but tax regulations that would govern the grant of tax incentives for the investors still under review.

2. Real estate Investment Trust (REIT) Act - promote the development of the capital market by expanding the participation of Filipinos in the ownership of real estate.Status: Approved but tax regulations that would govern the grant of tax incentives for the investors still under review.

3. Collective Investment Schemes Law- authored by Senator Angara which aims to unify laws and regulations governing all types of pooled investments and provide a competitive environment.
Status: pending

Thursday, August 25, 2011

The Philippine Stock Exchange Online Trading System is doing the online trading for several years but the announcement of the PSE that they will provide online trading services for trading participants that can in turn be offered to investors will revolutionalize how we buy and sell stocks. Investors in the provinces and the OFWs are waiting for the online trading system for a very long time. I am forecasting a PSE that is more active once the system will be functional.

To date, most trades in the country are still done via phone calls or physical interaction with stockbrokers or agents.The system will not kill the stockbrokers but rather take advantage of the Internet and the continuous growth of online transactions by allowing us, investors, to place our orders to the brokers online.

The online trading system will level the playing field.

Congratulations to PSE president and chief executive officer Hans Sicat for this project and hoping and praying that you will select the best solutions provider before the year ends.

I can not wait trading online!

Monday, August 22, 2011

Economics and Investing: A direct relationship

In my fifth year of teaching Finance I was approached by an honor student complaining that he did not deserved the 78% grade on his case analysis paper. He mentioned that all his grades for the past case analyses are way above 90%. I admired his bravery but I pitied his fear of receiving low grades. Looking on our society today, being rejected and being a failure is an anathema. Parents, peers and even schools pressured us to be successful in all what we do resulting to the feeling of humiliation when we experienced otherwise.

In investing, failure is part of the territory. Stock prices will surely go down, mutual fund NAVs will fall, real estate prices may depreciate and business may collapse. What we can do is to mitigate the failure by using our knowledge in economics.

We should remember as an investor that investment works in the essence of the most important word in economics: scarcity. I remember my economics professor Enrico Mina said that scarcity compel us to compete starting from the sperm cell racing to meet the egg cell. In investing it is the same , you compete with everybody else on buying the house located in the best location, selling first the stocks before the price goes down and even just getting a high score in the dreaded UPCAT exam.

Those who say that we can disregard competition are in the wrong side of the equation. We can not escape it and the products it produce: pain when failing and joy when succeeding. If I succeed in a competition it will teach me magnanimity and humility and if I fail my salvation is to persevere more to do all things well and to anticipate the reward that will surely come.Our being will not be complete if pain and joy are absent.

In my MBA days I had a debate with an Indonesian classmate who said that our country is becoming a failure. At the beginning, I was angry then I realized that there was a hint of truth on what he said. His basis of contention is that we do not produce what we consume and the scarcity we are experiencing were the product of lousy performance. Now I accepted that economics play a vital role in good investing.

Our country and our investment strategies are microcosm of who we are.

Our country will be economically prosperous if we start the culture of rewarding those who are most useful and those who provide valuable things to others.

Our investing strategies will be successful if our decisions are based on business performance and achievements.

Economics and investing are inseparable twins fueled by scarcity, surviving due to coordination and succeeding thru productive efforts. Disregarding one means stagnancy and strengthening the two means prosperity. We now know what to choose.

Arnel L. Cadeliña

Wednesday, August 17, 2011

Investing in Real Estate

Those who took accounting subjects it was taught to us that a house is an asset.Our professors are correct but in personal finance we treat house as a liability. Why? We spend money for the maintenance, utilities, furniture and fixtures. It is a total cash outflow. If you would like to make it an asset, you have to think of ways to make your house earn money. Can you launch a business in your garage? can you convert unused space for a boarding house? Can you make a home-based business?. There are myriad of ways but first we have to accept it is a liability in order for us to be on our toes to make it as an asset.
Those who will buy real estate there are several factors that will contribute to the increase of market value of your prospective property. My stint as an appraiser during my 3 years stay at Pag-IBIG Fund taught me the following:

1. LOCATION is a primary factor. Appraiser always give a high appraisal for those real estate that are near commercial areas, schools and church. They gave low appraisal for those property located neat a creek or river that has history of overflowing. Transportation is also a factor- real estate where 24 hour transportation is present is always priced high.

2. CORNER LOT AND FRONTAGE.If you have an opportunity of buying a real-estate that is located in a corner lot ,has a wide frontage, heavy traffic of people and wide streets with pedestrian lane, you hit the jackpot. Buy it now, the increase of market value will double or even triple in 5 years time.

3. DRAINAGE AND SEWERAGE SYSTEM. You should be very careful on buying property where drainage and sewerage system is defective or non existent. The risk of your property being flooded during the rainy season is high hence the market value will be low. Therefore generally property located in elevated area fetch higher that those in low-lying area.

4. CLEAN TITLE. In our country there are people who are expert in making bogus documents and Jose Pidal is their hero. Therefore you have to be careful by checking with the register of deeds the property that is offered to you. When we say clean title it is registered and free form liens or claims. Check also the tax declaration to make sure the real property taxes are paid regularly.

These are the 4 ways I know that can help you decide based on my three years stint as appraiser of Pag-IBIG Fund Lucena City.

Happy hunting, then.

* thank you for the photo featured here.

Monday, August 08, 2011

The importance of emergency fund

My son was hospitalized for eight days because of dengue. In his first two days of sickness we thought that it was just an ordinary case of fever because his platelets were above 200 thus normal.When the fever did not subside on the third day we decided to bring him to the hospital just to make sure. Our suspicion was confirmed when his platelets plummets to less than 200 and reaching as low as 84 on the sixth day. His chilling never stopped and his blood pressure dropped to 90/50.

I thought I am losing my son. I lost count on how many medicines I bought and how many dose of dextrose they inserted on his veins. As a parent, the fear factor was there. We had only prayers to hold into and the rosary our sole company on those agonizing eight nights. In that time of uncertainty, we literally knocked on heaven's door.

It was heaven's sent that his doctor was well-trained on handling dengue cases and she was accepting calls even past midnight. She instructed the nurses to monitor the vital sign of my son every two hours.

On the 7th day the platelets began to jumped to more than 100, the fever subsided and the blood pressure returned to normal. We thanked God for this turned of events.

As we contemplate on what happened, we accepted the fact that even though our house and our backyard are clean, the mosquitoes carrying dengue can fly from house to house and multiply quickly on rainy days. One family can not solve the continuous rise of dengue cases. Cleaning the surrounding should be a community effort and the local government should assists.

Meanwhile, I paid the hospital around P20,000. A huge amount that can be used to other important expenses. When I read the newspaper today that there is a dengue outbreak in other parts of the country, I feel for the parents who need money to buy medicines for his child. It is no joke to be sick in our country and those who have no income and no emergency fund will put the child in danger. These are the reasons why there are children dying of dengue though is a curable sickness.

As a parent our choice is clear: to save the life of our child .......notwithstanding the astronomical hospital bills in our country.

Saturday, July 30, 2011

Investing in iPad?

A university in the visayas required the students to buy the P27,000 iPad. They even spread the news that their enrolment goes up because of the result of this new way of "learning".

As a parent is it worth to invest our P27,000 in a tablet?

I am teaching business subjects for the past 9 years and I came into conclusion that the iPad and the likes of it are not the right tool to develop critical thinkers. Here are my reasons:

1. Instead of following instructions of the professors, the students are too darn distracted.

2. Though some tablet has FreeThinker software, still students can not take notes using the iPad. Worse, they can not even edit their documents.

3. Since clumsiness is part of the territory when you are young, there are some students forgetting where they left their tablet and dropping the P27K iPad will be common in campus corridors.

4. We have to accept that Steve Jobs and his pals created iPad to entertain the users.For you to read digital books is a secondary reason, that is why when they market it they always say : it is your best choice to watch video, view photos, listen to music, play games, with satisfying and fun. Education? never mentioned.

5. maybe you are not aware, you can not replace the battery of the iPad. What will you do then?


My dear friends nothing beats creativity and critical thinking inside the classroom. Good professors,well written books and a sturdy laptop or netbook are the need of your children.

Go ahead and buy your children the iPad or the other tablets flooding the market
but be ready to see your children listening to songs, watch video, Internet, email and so on in every second that they like it.

They will do it not only in your home but also inside MY CLASSROOM.

Tuesday, July 26, 2011

Expect peso to appreciate to P41

The peso could appreciate to the P41-per-dollar territory by year-end as investors in search of yields continue to flock to Asian markets including the Philippines(Alegado, 2011).

This a good news and a bad news as well. Let us revisit our micro and macroeconomics. A strong currency is good because:
1. Investment grade status of the Philippines will improved.
2. The debt ratios of the country will improved.
3. Inflation will be controlled.
4. We can buy foreign goods (such as iPAD and laptops )at lower prices.
5. Buy more domestic goods and services.
The strong currency is bad news because:
1. it hurts domestic producers or exporters because it decreases the foreign demand for their goods and services
2. Less money for OFWs and their families.

 If Filipino enterprises increase their domestic sales and Filipinos consume or buy more Filipino made products then the strong currency will positively affect our economy. This is what the Japanese, the Koreans and the Chinese did for them to have a strong economy. Added to that the Philippines should produce more goods and services that are bought and consumed by consumers in order for the economy to have solid growth.

Why is it that President Aquino's 2nd SONA failed to mentioned the concrete goals how to generate or increase employment opportunities and how to increase production and consumption of goods and services. This is the cycle of growth we need and should focus on...

Arnel L. Cadelina

Alegado,A. (2011, July 25).Peso seen at P41 by yearend, Business World,p.S2/1.

Monday, July 18, 2011

The Filipino Investor pays tribute to Rizal@150

When you study at the Ateneo, whether undergraduate or post graduate, the images of Rizal are ubiquitous.As if the Jesuits want you to know that Rizal is Ateneo and Ateneo is Rizal.To ever-remind you that their most distinguished alumnus was our national hero, they named their library as Rizal because they know as an Atenenan the library will shaped a huge part of your education. Then they invite you to visit their Rizaliana Collection to reinforced the belief that the national hero was once their student and his being creative,critical thinker, nationalistic and non-violent revolutionary ways were the result of the Jesuit education. You can not escape the rub.

Once your done with your study and working from sunrise to sunset, the images of Rizal will not leave you. Every town he has a monument and every one peso you got, he is there being the most depicted image of the Philippine currency.

In tribute to Rizal at 150. Let us revisit the poem of Rafael Zulueta y da Costa:

Not yet, Rizal, not yet
The glory hour will come
Out of the silent dreaming
From the seven-thousandfold silence
We shall emerge saying WE ARE FILIPINOS
And no longer be ashamed

Sleep not in peace
The dream is not yet fully carved
Hard the wood, but harder the blows
Yet the molave will stand
Yet the molave monument will rise
And God’s walk on brown legs

Thursday, July 07, 2011

Why BIR is wrong?

Yesterday,July 6, 2011, The Philippines Bureau of Internal Revenue issued a memorandum circular no. 27-2011 saying that only mandatory contributions of SSS, GSIS and Pag-IBIG Fubd are exempted from income and witholding tax. Any contributions above the compulsory amount cannot be excluded from the gross income of taxpayers and are therefore subject to tax.

Filipino investors who are members of Pag-IBIG Fund are required to contribute as an employee a maximum of 2% of their monthly compensation. Majority of Pag-IBIG Fund members are lower class and middle class who aspire that their Pag-IBIG savings will help them save for their retirement.

With the 2% contribution, a typical member of Pag-IBIG can have around P200,000 after 20 years of savings. Since P200,000 is not enough when you retire, Pag-IBIG Fund offers a scheme called Pag-IBIG II wherein members, whose gross monthly income exceeds P5,000.00 would have another savings option that would provide them with a yield higher than those given under their existing membership with the Fund.

A minimum P500 monthly contributions can be made. The scheme will help the members to accumulate additional fund for their retirement.

This is the additional contribution the BIR want to tax.

It is understood that the state needs money for its operation but the state exists because of the people who are paying religiously their taxes. If the state can not help the people in terms of assistance in their retirement years then the state should help the people who want to save by providing incentive such as exemption of tax for the Pag-IBIG II contribution.

The BIR should tax more those who spend not those who will save.

The BIR should repeal their

latest ruling..

Tuesday, June 28, 2011

Dont Cry for Me Lucena City

As of today, my hometown Lucena City has two mayors. One suspended by the DILG but retained by the Supreme Court and the other installed by the DILG and recognized by COMELEC. Both of them holding office in two different places.

If you are busy making money and all of these political circus keep on pestering your brain you might be correct that Lucena City is going nowhere.

Our forefathers who created Lucena City vision it as the center of commerce not only in Quezon but in the whole Southern Tagalog. It was carved near 2 ports: Dalahican and Cotta , located between two rivers (Dumacaa and Iyam) and strategically accessible in all directions. So the vision is outstanding. The heirs are spoiling it by focusing on short-term strategies that benefits only their inner circle.

Meanwhile those who are working hard and raising their families in honest ways are penalized by having a dysfunctional local government. We can not stop their wrangling but they should be ashamed that the Filipino Investors based in Lucena City deserved a better local governance. History is harsh to those who are ineffective, look at Saleh, Gaddhafi.....

Sunday, June 12, 2011

Buying Individual Stocks

Those who have experienced buying individual stocks directly instead of mutual funds will give you one common advice: be very careful. Why? because buying individual stocks will not need the diversification test required to minimize the risk.

If you have already investing in mutual funds you have experienced receiving annual report from you fund managers informing you how they picked the stocks they invested in. You noticed that they have strict limits on the number of companies they invested in.

It is only wise that you act like a fund manager in picking your own individual stock by buying only stocks that are favorites of fund managers. Check your mutual fund annual report and you will see the stocks that I am talking about.

Second step is to research the stock you selected by checking the company and the management team handling the company. Judge them based on their style and management experience.

Third, once you bought the stock, you have to make sure that you manage it. You made a choice of buying directly therefore devote time to manage it.

Fourth, what will you manage? the checking how the volume of shares traded in the stock market. You have to check your stock on a daily basis or weekly basis if you are too busy. The bottom line is you should make a historical perspective of your stock's price usually for 52 weeks to establish a basis whether to keep or sell your stock.

This is my personal experience on stock buying. How's yours?

Thursday, June 02, 2011

The Consumer Country (a re-blog)

Mario (not his real name) was an MBA classmate of mine when we were working then in Ayala. We have a lot of qualities in common that’s why we were at eased with each other for at most 10 years.

One thing that differ him from me is that he is a spendthrift.

Every payday I save money to invest in my house and college education of my children. Mario is different, he spend as if there is no tomorrow. Branded clothes, shoes, neckties, handkerchiefs and regular dining in fine restaurants are his usual “investments”. He is known in his office for being maporma.

When we reached 30 years old, Mario and I decided to have a small drink at the Greenbelt. After we downed 2 bottles, Mario got under the influence. He began to tell stories to me that he was heavily in debt. More than hundred thousands because of the plastic (credit card!!!). He can not pay anymore the loan because he has other loans with lots of people. He is about to be kick out from his apartment if he will not pay the rent which is due for 3 months. His girlfriend abandoned him when she learned that he was bankrupt. Mario was totally devastated. Victim of zero savings habit and 100% consumptions propelled by his eveready credit card.

My life was reversed of him. I am not rich but I have a house and lot , college plan for my two children are paid in full and I have investment in mutual funds all before I reached 30.

Mario and I parted ways when I left PILTEL in 2001. I never heard any news about him. But I see a lot of Mario’s in our country. Children of OFWs, government or private workers and sabungeros. Only few people I know who has the propensity to save and invest.

Our country is a consumer country. With the exception of the Tsinoys and some enlightened countrymen the norm in our blood is to spend and consume. Postponing pleasure today in order to have a pleasant future is somewhat a blasphemy in our culture.

To exorcise this spendthrift demon, some like Mario need to suffer first before expelling it while others kill it even before it step on their door mat.

The roads are difficult for the latter but sure as the sun shines it brings reward.

Wednesday, February 02, 2011

Bank Passbook and ATM

When I was in grade school one of my memorable moment was getting my very first bank passbook (no ATM then!). I recall the bank was Solid Bank and the memory of seeing my name on the passbook and checking the amount reflected on it I still vividly remember.

When I saw the first interest earned by my savings, I began to asked myself how did they computed the amount. I realized then and there that my money can earn in a bank but I wondered why was it so low.

Today I am convinced that banks don't pay much interest on my money even though they charge high interest rate when they loan it for me. No wonder banks earned record profit margins last year and at the expense of their customers.

What is insulting nowadays is that the small interest earned on your savings account they add tax charges on it. They will charge you more if you use your ATM in other banks not affiliated with them.

Second, we Filipinos treat our passbook as deferred savings account because we withdraw the money as frequent as possible. The banks made sure that you do spend because ATM's are easily accessible.

Let us be honest here. Most of us can not accumulate money in our bank savings account.

The Real Savings Account? It is when you save your money, not withdrawing it every time and forgetting about it because it saved for specific long-term objective like college education or buying a house. You can not do that in your passbook savings.

Use the banks as temporary custodian of your money and when you accumulated enough for investment then it is the right time Mutual Funds and Stocks step in.

Monday, January 17, 2011

For the 20 to 30 Year old Filipino Investor

I received an e-mail from Slovenia (Yes, Slovenia!} sharing that he was influenced by my blog.

I am very happy that I have a reader from Europe but I am in my best mood if more Filipinos will appreciate the Filipino Investor blog.

Why? because personal finance in my country Philippines is not being taught from basic to tertiary education (unless you major in Finance). This unawareness is contributory to the poverty that engulfing millions of Filipinos.

The Filipino people are the reason behind my passion to write the "Filipino Investor"because the destiny of our country we shared whatever the outcome . This is my share for patriotic purposes.

My friend at Slovenia benefits also because personal finance is universal and surely can be applied to his personal investment strategies.

Now to my blog:

If you are on your twenties to early thirties, a Filipino Investor can afford to be aggressive. As Money magazine said " You have nothing to lose but few more years of your working life. You have nothing to gain but an earlier retirement?.

Once you saved P50,000 to P100,000 you can now invest strategically in the following ways:

1. 70% in growth stocks.
2. 20% in equity mutual fund
3, 10% in money market fund or Time Deposit.

The above strategy offer you an annual returns of 9% or more based on past performance or the worst case scenario of 7% or less.

next topic: For the 30 to 40 years old Filipino investors

Tuesday, January 11, 2011

Buying Your First Home

For my blog readers you noticed by now that I write only articles based on my own experiences. It is my guiding principle that I will share only what i did passed through.

Now, those who would like to buy their first home, your own time factor is critical when designing an investment and savings plan for home ownership.

Please do not be surprised if i tell you now that I planned my first home five years before I wanted to make a purchase. I was 25 then.

Today young people I know ,including my own business students, they can not wait five years to buy a house. Really the trend today is to be fast and furious.

I can not blame them since they are experiencing their own rat race.( which surprisingly this race is abhorred nowadays by my generation)

But what is the benefit then of preparing for 5 years before buying a first home?.

The primary reason is that you will have more for downpayment or equity and less loan to pay for.

Here are my further advise to you then:

1. Review where your money is going and where you could save.
Can you forget that Starbucks coffee and drink Nescafe instead?. Trim your expenses like a possessed person and save a lot in mutual fund preferably balanced fund.

2. Visualize your dream house. Photograph it or draw it. Put in places you see everyday and set the date when you will build it.

3. Open a savings account intended only for your first home. Make regular deposits whatever the amount you got.

4. Monitor your progress to remind you that you are determine to have your house.

Remember this my dear-first-time-buyer-of-their-first-home your first house is the best investment you can make. It will be your sacred nesting ground.

May your house blessing happen soon.

Wednesday, January 05, 2011

Stock or Equity Mutual Fund

In mutual fund the best way of earning money is investing in stock or equity mutual fund. Judging from my past investment history, I did earn more in equities than in balance or money market fund for the reason that the rise of the price of stocks will carry the NAV upward.

Since 2003 I've been investing in mutual funds and over the years I gravitated to the First Metro Equity Save and Learn Equity Fund and ATR Kim Eng Equity Fund primarily because of their low cost structure, a reasonable initial minimum investment, the availability of performance data in their website and the ease of redeeming the funds.

What I learned over the years is that a Filipino Investor should primarily focused on knowing the consistency of performance of a stock mutual fund company. Do not be impressed with those 1-year, 3-year and 5-year performance tables you see in Business World newspaper everyday.

Here are then my tips for you:

1. Analyzed the stock mutual fund based for its total return for full calendar years .

2. Give more weight for the most recent year's performance than the prior year's because fund grows in size.

3. Check the stocks bought by the mutual fund company through their website if it provides the investment style of growth, core and value classification.

The following are the stock mutual fund available in the Philippines:
ATR KimEng Asia Plus Recovery Fund Inc.** (USD$)
ATR KimEng Equity Opportunity Fund, Inc.
First Metro Save and Learn Equity Fund, Inc.
Philam Strategic Growth Fund, Inc.
Philequity Fund, Inc.
Philequity PSE Index Fund Inc.
Philippine Stock Index Fund Corp. *
Sun Life Prosperity Phil. Equity Fund, Inc.

The best way to start if your interested is to visit their website and compare the funds with each other including their investment style. From then , you are already halfway of having passive income.

My best wishes always,