BEAT INFLATION

Today January 9, 2012 is my birthday. My gift to my dear blog readers is this article. Enjoy!

Inflation is the reason why the price of your shoes and the price of your bread  increased as the time goes by. Almost everything that we consume or buy are subjected to inflation. All of us and even the government cannot avoid nor eliminate it. The best thing that the government do is to mitigate and reduce it.

When our Bangko Sentral announced that the Inflation rate for December 2011 eased to 4.4. % I am glad because compared to previous years the inflation in the year 2011 is only minimal. It means that Filipinos experience "only" an increased price of food and energy to around 4%. In Business and Economics when we experience a low inflation, the BSP usually cut interest rates in order for Filipinos to borrow more as additional capital for their business or to improve their infrastructure.

While low inflation is beneficial to businesses, for ordinary people though the low inflation rate has no meaning to them because  there are still limited options for savers to earn a real return on their savings. The Inflation figures released last Friday reveal that the consumer prices index – the index used by the government to measure inflation – decreased to 4.4% per cent in December. The price hikes in housing, water, electricity, gas and other fuels – which is seen as a more accurate gauge of the cost of living – fell from 5.7 per cent in November to 5.1 per cent in December.

As Filipino investor we can say that the small drop in inflation announced by BSP will not be enough to curb the woes of the nation’s savers. The lower and middle class are still not given real opportunity because there are no regular savings accounts available in the market that negate the effects of tax and inflation.

In order for us to beat inflation an ordinary Filipino should  find a savings account paying 5 per cent or more a year.Can we identify one Philippine bank that pays 5% interest rate for our savings?. There is none. The number 1 bank, Banco De Oro is paying a low of 2.0% and a high of 2.75%. If you put your money in a bank,  your profit will be eaten by inflation therefore the only way to beat inflation is to increase the risk scale.

There are many ways to beat inflation but not all are accessible to Filipinos. We can not buy gold, we can not trade currencies and we can not buy junk bonds. Maybe you heard all of these anti-inflation strategies but 99% of us are not investing on these because skill, access and capital prohibit us.

What then can we do as ordinary Filipinos?

1. Delay getting your Pag-IBIG Fund benefits

    You can get your Pag-IBIG Fund savings after 240 monthly payment and if you are not yet retiring by that time better continue the Pag-IBIG deduction. Your employer will give a share to your deduction and you will receive dividends at the end of the year.    

2. Delay getting your Social Security

   If you have enough money to have an early retirement, go ahead but to those who are not financially prepared, one way to beat inflation is to postpone taking benefits until age 60 or 65 you make an investment in the form of forgone monthly checks and get a return in the form of enhanced benefits thereafter. The incremental annuity you are buying is inflation indexed.

3. Plant your own vegetables and raised your own chicken or pig.
     On this strategy the city people with no access to agricultural lot and people who has opportunity cost in other endeavors are exempted. For the rest who are willing and able, one basic way to beat inflation is to plant your own vegetables and raised your own chicken or pig. The technique here is to spend less in order for us to invest more.

 3. Invest in Stocks and/or stock mutual funds

  This kind of strategy is only for those who are prepared to take risk. If you are not, stay away and look for other ways. For those who are brave  buy shares of oil, mining, and water companies. They should benefit from rising commodity prices. Real estate investment are another traditional haven for inflation worriers. But this sector is extremely pricey today,be very selective and consult experts before you buy.

     Inflation can have its positive and negative effects in our family and our investing strategies. Again , we have to make sure that our investments will give interest higher than the inflation rate 

       As I say to my Finance students: "Beat Inflation".

My best wishes always,
arnel l. cadeliña

references:

Inflation hits 11-month low. ( 2012, January 7). Business World.

http://learnfinancialeducation.com/what-is-inflation/

http://www.indexmundi.com/

Got Job Interview? Here are top 50 most common questions

I remember my first job interview as the most nerve-wracking experience. My hands were trembling, my knees shaked and I totally goofed.

For you out there who are scheduled to be scrutinized by the persons you don't know personally but who can decide if you are employable material here are the interview questions they will throw based on researched by Glassdoor :

Most Common Interview Questions

1. What are your strengths?
2. What are your weaknesses?
3. Why are you interested in working for [insert company name here]?
4. Where do you see yourself in 5 years? 10 years?
5. Why do you want to leave your current company?
6. Why was there a gap in your employment between [insert date] and [insert date]?
7. What can you offer us that someone else can not?
8. What are three things your former manager would like you to improve on?
9. Are you willing to relocate?
10. Are you willing to travel?
11. Tell me about an accomplishment you are most proud of.
12. Tell me about a time you made a mistake.
13. What is your dream job?
14. How did you hear about this position?
15. What would you look to accomplish in the first 30 days/60 days/90 days on the job?
16. Discuss your resume.
17. Discuss your educational background.
18. Describe yourself.
19. Tell me how you handled a difficult situation.
20. Why should we hire you?
21. Why are you looking for a new job?
22. Would you work holidays/weekends?
23. How would you deal with an angry or irate customer?
24. What are your salary requirements? (Hint: if you’re not sure what’s a fair salary range and compensation package, research the job title and/or company .)
25. Give a time when you went above and beyond the requirements for a project.
26. Who are our competitors?
27. What was your biggest failure?
28. What motivates you?
29. What’s your availability?
30. Who’s your mentor?
31. Tell me about a time when you disagreed with your boss.
32. How do you handle pressure?
33. What is the name of our CEO?
34. What are your career goals?
35. What gets you up in the morning?
36. What would your direct reports say about you?
37. What were your bosses’ strengths/weaknesses?
38. If I called your boss right now and asked him what is an area that you could improve on, what would he say?
39. Are you a leader or a follower?
40. What was the last book you’ve read for fun?
41. What are your co-worker pet peeves?
42. What are your hobbies?
43. What is your favorite website?
44. What makes you uncomfortable?
45. What are some of your leadership experiences?
46. How would you fire someone?
47. What do you like the most and least about working in this industry?
48. Would you work 40+ hours a week?
49. What questions haven’t I asked you?
50. What questions do you have for me?                                                             source:http://www.glassdoor.com/blog/common-interview-questions/

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
http://www.indexmundi.com/about.html (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
nelcadelina.blogspot.com

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

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.   

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!.

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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.

Steve Jobs (February 24, 1955 – October 5, 2011)

A genius. Geek hero . Rest in Peace.

QUEZON PROVINCE: A HUMAN DEVELOPMENT DATA

QUEZON PROVINCE: A HUMAN DEVELOPMENT DATA

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. 

NOW HERE ARE THE HUMAN DEVELOPMENT DATA OF QUEZON PROVINCE

I. LIFE EXPECTANCY

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.

II. KNOWLEDGE
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.

STANDARD OF LIVING

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


IV. HUMAN DEVELOPMENT INDEX
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.

RECORDED HISTORY OF POVERTY INCIDENCE IN QUEZON PROVINCE
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.

RECORDED HISTORY OF POVERTY INCIDENCE IN BATANGAS PROVINCE
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%..

Conclusions:

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
nelcadelina.blogspot.com

SOUTHEAST ASIA TRADING PLATFORM

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
2. Thailand - PTT CHEMICAL PUBLIC COMPANY LIMITED,THE SIAM CEMENT PUBLIC COMPANY
LIMITED,THAI OIL PUBLIC COMPANY LIMITED
3. Singapore - SINGTEL, WILMAR INTERNATIONAL, DBS GROUP of Singapore

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

Arnel L. Cadeliña
nelcadelina.blogspot.com

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

The Philippine Stock Exchange Online Trading System

CitisecOnline.com 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!

nelcadelina.blogspot.com

Economics and Investing: A direct relationship

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.

nelcadelina.blogspot.com


* thank you greaterlearning.org for the photo featured here.

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.

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?

6. iPad IS NOT DESIGN FOR CONTENT CREATION.

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.

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
nelcadelina@blogspot.com


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

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

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..

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.....

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?