MILLENNIALS may be overly confident about their investing skills, but many are handling their 401(k)s with savvy, a new study by Wells Fargo Institutional Retirement & Trust suggests.
More than a quarter of younger workers -- 28% -- have at least 10% deducted from their paychecks, according to the study. It analyzed the behavior of 4 million employees in the plans the company administers, from 2011 to 2016. Among the older generations, 35% of Gen X-ers and 44% of boomers were at the 10% contribution mark. Boomers get their own shout-out.
If you assume they are the ones earning $100,000 or more, which they likely are, they are the “most improved” group over the study’s five years among those who contribute at least 10%.
There was a 15.3% increase among those making $100,000 or more hitting the 10% rate. At the same time, there is a lost opportunity for boomers. Just 7.7% of participants 50 and older make the additional $6,000 “catch-up contributions” allowed by the IRS.
Efforts to get employees to start saving earlier and a widespread trend to auto-enroll employees in retirement plans have helped put more people of all ages in the most popular default investments, target-date funds.
These funds are widely diversified and automatically adjust asset allocations between stocks, bonds, and other assets based on a person’s age, leading up to a more conservative portfolio at retirement.
The survey found that 85% of millennials use a managed investment such as a target-date fund, compared with 77% of Gen X-ers and 73% of boomers.
“We’re seeing the first generation that had the full, out-of-the-gate use of tools like auto-enrollment and target-date funds, and it’s really getting people into plans early and getting them diversified,” said Joseph Ready, head of Wells Fargo Institutional Retirement & Trust.
“Whether they’re astute about the market or not, these things will help people take advantage of, hopefully, longer-term returns from the equity market over the next 35 to 40 years.”
When younger savers do fiddle with their 401(k) accounts, some of them are making smart tax moves. Sixteen percent of millennials elected to use a Roth 401(k), compared with 12% across all generations. Contributions that go into a Roth are after-tax, so starting one when you’re young and in a low tax bracket is a good strategy.
For all that, there’s room for improvement among millennials. If 28% are deferring at least 10% of their pay, seven out of 10 aren’t. Employers can help by automatically escalating employee contributions each year and doing so at a higher rate.
Employers have been concerned about being too aggressive with this strategy, and those that do it typically increase the contribution rate by 1% annually. Wells Fargo’s Mr. Ready urges employers that use auto escalation to bump employees up by 2% a year to get them up to that 10% savings goal faster. Wells Fargo data show that if employers bump the auto-increase rate from 1% to 2%, there’s no big difference in the rate of employees who opt out of the increase. And it makes a huge difference in how prepared they are to retire, Mr. Ready said.
Employees can take matters into their own hands, of course. Every time a raise or a promotion comes along, make it a point to increase your savings rate, whether through your 401(k) or in a separate savings account. That use of today’s rewards will yield a far more meaningful return tomorrow. -- Bloomberg
29 June 2016
‘Strengthen alternative income sources, BPO’
Investment in human capital must be sustained to boost remittance inflows, but given volatility in the global economy, the Department of Finance (DOF) on Wednesday stressed the need for the country to step up the development of alternative sources of income such as the business process outsourcing (BPO) industry.
“If domestic consumption is the driver of the Philippine economy, then its fuel is remittances. The Philippine government should ensure its continued inflow through investing in human capital development. Given the volatility of the world economy, alternative sources of income such as the BPO industry should be strengthened,” the Finance department said in its latest economic bulletin.
Remittances in April reached $2.213 billion, boosting the country’s year-to-date remittance level to $8.67 billion, up 3.1 percent from a year earlier.
“[Remittances from] Saudi Arabia and UAE [United Arab Emirates] exhibit negative growth rates, however, remittances from the Middle East still exhibit double-digit growth rates, and have the greatest contribution to growth despite fluctuating oil prices,” it said.
DOF data showed that remittances from the Middle East grew 13.9 percent to $2.43 billion in the January to April period, up from $2.13 billion a year earlier.
Details of the figures show inflows from Saudi Arabia and UAE fell by 8.1 percent and 3.2 percent, respectively, in the first four months of 2016, while other inflows from other Middle East countries surged 78.3 percent.
“These countries still have enough savings to spur regular economic activity,” it said.
Meanwhile, traditional destinations like the Americas and Europe (with the exception of Germany and Switzerland) show negative growth, while Asia exhibited slow but positive growth.
The Americas exhibited a 1-percent decline while Europe fell 6 percent. Remittances from Asia increased by 3.8 percent.
“Miscellaneous countries, e.g., Other Asia, Other Americas, Other Oceania and Other Middle Eastern Countries (excluding Other Europe) show double-digit increases. Africa also grew 118.4 percent,” it added.
The finance department said this reflects greater dispersion of overseas Filipino workers who are shifting toward emerging, fast-growing labor markets.
Strengthen other sources of income
“Given the volatility of the world economy, alternative sources of income such as the BPO industry should be strengthened,” it said.
“Given the volatility of the world economy, alternative sources of income such as the BPO industry should be strengthened,” it said.
In particular, the DOF said the exit of the United Kingdom (UK) in the European Union through a referendum or “Brexit” has introduced financial and currency volatilities into the global economy, making the sailing a little rough for the Philippines.
“But the country, owing to its good macroeconomic fundamentals, is going to sail all right, Brexit headwinds notwithstanding,” it said.
The country’s current fiscal position is best described as healthy, the agency said, stressing that national government debt is largely peso-denominated, minimizing the adverse impact on the government and consequently the rest of the economy from exchange rate risks that may ensue due to Brexit.
It said fiscal discipline has also kept the deficit at low levels, pointing out that “the country is in a fiscal position for a more expansionary fiscal policy, not for stimulating consumption, however, as in the case of advanced economies in the aftermath of the 2008/9 GFC [global financial crisis], but for investment in both physical and human capital.”
The DOF also noted the country’s external position is strong with regards to possible Brexit effects, with only a minimal portion of OFW remittances and BPO revenues originating from the UK.
source: Manila Times
28 June 2016
Researchers have found names for emotions we didn’t know we have
If you saw Inside Out, you may think you have the major emotions down. But now, a new book, The Book of Human Emotions by Tiffany Watt Smith, reveals names for 154 emotions you probably never knew you had, like “malu” and “awumbuk.” (Guesses, anyone?) Or, you had them but didn’t know what to call them. Enter Smith’s book. Problem solved.
Smith is a research fellow at the Centre for the History of the Emotions at Queen Mary University of London, and was drawn to her research by improved understanding of how emotions work. “It’s this idea that what we mean by ‘emotion’ has evolved,” she said toScience of Us, reported CNN. “It’s now a physical thing — you can see a location of it in the brain.”
Yep, scientists can now point out exactly where certain feelings are within our heads, all through brain-imaging studies. In fact, back in 2013, a study was published wherein psychologists found neural correlates for nine renowned emotions (anger, disgust, envy, fear, happiness, lust, pride, sadness, and shame).
In Smith’s book, there are dozens of words for emotions you probably didn’t even know you were experiencing — and she gathered the words from around the world. Pretty cool. “It’s a long-held idea that if you put a name to a feeling, it can help that feeling become less overwhelming,” Smith said. “All sorts of stuff that’s swirling around and feeling painful can start to feel a bit more manageable.”
CNN gave an example of ten words from Smith’s book, and we broke them down for you here. Chances are, you experience many of these emotions already — but now, you can finally call them by name. (Bonus points if you actually start using them in conversation.)
[giphy url=http://giphy.com/gifs/suitsusanetwork-suits-donna-paulsen-26BkNYAuK4IRbgP6M]
1. Amae
This is defined as “leaning on another person’s goodwill,” Smith said. It’s a Japanese word that means “indulgent dependency.”
2. L’appel du vide
“L’appel du vide” is French for “the call of the void.” To understand it better, Urban Dictionary describes it as “that tiny voice that tells you to jerk the steering wheel just to the right and take a flying leap off the ledge.” Sounds about right.
3. Awumbuk
This is “the feeling of heaviness and sorrow you feel after your guests have departed,”states The Inky Fool. We can all probably relate, right? The word stems from the Baining people in the mountains of Papua New Guinea.
4. Brabant
This is when you push someone’s buttons just to see if you can. The word appeared in a 1984 book titled The Deeper Meaning of Liff: A Dictionary of Things There Aren’t Any Words for Yet–But There Ought to Be by author Douglas Adams and TV comedy producer John Lloyd. Adams and Lloyd described it as when you are “very much inclined to see how far you can push someone.”
5. Depaysement
This occurs when someone does something unexpected or unusual, creating “the feeling of being an outsider.” For instance, if you go abroad and do something ordinary to us here in the U.S., like tip waiters in Europe, even though it’s not the norm there.
6. Ilinx
Smith refers to this as “the ‘strange excitement’ of wanton destruction,” and cites sociologist Roger Caillois, who “traced ilinx back to the practices of ancient mystics who by whirling and dancing hoped to induce rapturous trance states and glimpse alternative realities,” she said. “Today, even succumbing to the urge to create a minor chaos by kicking over the office recycling bin should give you a mild hit.”
7. Kaukokaipuu
This is a Finnish word for when you’re homesick for a place… though you haven’t actually been there. It can also mean wanderlust (which, TBH, many of us probably suffer from).
26 June 2016
Notes on the accreditation of CPAs
THERE are over 6,100 CPAs accredited in public practice with the Board of Accountancy (BOA) as of June 2016.
The list of accredited CPAs are posted in the BOA web site (http://boa.com.ph/accprac/) so the public can check their names before engaging their services.
Below are the procedural steps currently observed by the Professional Regulations Commission (PRC) in the accreditation of CPAs in public practice and the issuance of the certificate therefor.
The steps presented above appears to be a long and maybe tedious process.
The Board of Accountancy is working with the PRC to expedite and streamline the process. Changes that are forthcoming are the simplification of requirements, the online application, submission of requirements, and verification of CPD completion of requirements and others.
Aside from the CPAs in public practice, the CPAs in education, commerce and industry, and CPA partners and professional staff of auditing and accounting firms and partnerships are all required to be accredited
with the BOA.
with the BOA.
Is there a prospect that these CPAs need not anymore undergo this accreditation process having already acquired their CPA license? Perhaps.
Hon. Concordio Quisaot is a member of the Board of Accountancy, tasked with the oversight in the accreditation of CPAs.
He has a consulting and auditing practice in Cebu and has electric cooperatives among
his clients. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general.
his clients. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general.
These can be e-mailed to boa.secretariat.@gmail.com
source: Business Mirror
Does the recent re-assignment of SMC frequency benefit the consumers?
This is the core question that the public and governmental authorities who oversee the sector need to ask and be assured on.
As a member of the Board of Directors of Globe Telecom with responsibility for corporate governance, accountable not just to shareholders but to all stakeholders, including customers and government authorities, I am fully satisfied that the answer is an unequivocal “Yes.”
Some history: Former Singapore Prime Minister Lee Kuan Yew famously said in 1992 -- “The Philippines is a country where 98% of the residents are waiting for a telephone and the other 2% are waiting for a dial tone.” (Check out my Sept. 9, 2011 blog entry entitled “De-monopolizing telecom” by visiting the link --http://goo.gl/aY1rUr.)
Twenty-five years later, there are as many mobile phones, pocket computers really, than there are people, offering a dizzying array of services fitting any lifestyle and business need. Our progress in telecom has made possible our global leadership in BPO, the key growth driver of the economy. How did we get here?
The long and winding road.
With the reforms introduced by President Ramos during 1992/1993, there was a burst of new entrants, and optimism -- five mobile carriers started, also several landline carriers. The issue was lack of landlines so it was roll-out obligation imposed on those who wanted mobile or international licenses.
The Asian crisis came in the late ’90s. Carriers who were competitively weak found themselves struggling under debt burdens too, and a period of consolidation started. Five mobile carriers became two -- Globe bought Islacom, Smart took over Piltel, and Extelcom went into into financial distress. And those who bet on landline or international went into distress -- PLDT had debt issues, then Smart bought PLDT (but PLDT became the parent), Piltel’s landline went to PLDT, Bayantel was in receivership, PT&T likewise. By 1998-2000, only PLDT/Smart and Globe, with good business models, strong shareholders and scale, were surviving. That was also the strongest growth period in the era of voice/SMS.
The government actually gave Digitel, a small landline company, a mobile license, as they felt the need to have a third mobile player. It took them five years to get to a scale to be a serious third player with more than 10% share.
When 3G arrived, the frequency standards allowed the government to grant 5 licenses: three to the existing players, plus a new one (Cure), and a fifth that Bayan says should have gone to them. Given efficiencies of scale, Cure was bought by Smart, and eventually Bayan got bought by Globe. Digitel by PLDT. So back to two main telco groups. (Thank you to Gil Genio, EVP of Globe for refreshing my recall of all of this.)
So as you can see, there are many reasons why the Philippines ended up with two major telcos -- scale, continuing high capex requirement that can only be funded from overseas or by ploughing back profits into the business, infra difficulties that give incumbents advantage, and in mobile, limits on how frequency are sliced up.
Is this resulting two player structure inimical to public interest?
I think only if they behave in a non-competitive way.
From everything I have seen as a Board Director for over a decade, there is not only competition, but fierce competition.
Globe as the challenger has played its role to the hilt. It has been gaining market share through innovation and improvement in services. For the public, evidence of this abound -- look at the billboards and TV ads, or the daily SKU battle in prepaid, or how for P15 one can get unlimited calling and texting for a day, and how mobile Internet prices have come down -- these are the indicia of competition.
Moreover, more players do not mean better service. Europe is a good example. They had a lot of players competing that led to price competition lowering of EBITDA margins (aside from an aggressive regulator). This has taken away the ability of these telcos to spend for needed rollouts. Eventually, the markets began to consolidate leaving a small number of players. Incidentally in the case of Globe (and I believe likewise for PLDT) it is reinvesting 28%-33% of revenues for capex, significantly more than telcos in most other countries.
Ultimately, it is not concentration per se but harmful behavior that indicates lack of competition that the Competition Law (RA 10667) is concerned about. Even before the passage of that law, Globe has always placed the interest of consumers at the center of its business, the sine qua non for long-term profitability and sustainability of Globe, and the industry. (See “Demonopolizing Telecommunications”).
(The next installment of this column will address observations on poor or costly broad band service of local telcos vs peers, why this is true for fixed line infrastructure but not for mobile, factors that explain these, and what government can do to improve service. Also why the re-assignment of the 700 mhz frequency band from SMC will help majorly advance the interest of consumers vs alternative courses.)
Romeo L. Bernardo is GlobalSource Partners Philippine advisor. He served as Finance undersecretary during the Aquino-1 and Ramos administrations.
As a member of the Board of Directors of Globe Telecom with responsibility for corporate governance, accountable not just to shareholders but to all stakeholders, including customers and government authorities, I am fully satisfied that the answer is an unequivocal “Yes.”
Some history: Former Singapore Prime Minister Lee Kuan Yew famously said in 1992 -- “The Philippines is a country where 98% of the residents are waiting for a telephone and the other 2% are waiting for a dial tone.” (Check out my Sept. 9, 2011 blog entry entitled “De-monopolizing telecom” by visiting the link --http://goo.gl/aY1rUr.)
Twenty-five years later, there are as many mobile phones, pocket computers really, than there are people, offering a dizzying array of services fitting any lifestyle and business need. Our progress in telecom has made possible our global leadership in BPO, the key growth driver of the economy. How did we get here?
The long and winding road.
With the reforms introduced by President Ramos during 1992/1993, there was a burst of new entrants, and optimism -- five mobile carriers started, also several landline carriers. The issue was lack of landlines so it was roll-out obligation imposed on those who wanted mobile or international licenses.
The Asian crisis came in the late ’90s. Carriers who were competitively weak found themselves struggling under debt burdens too, and a period of consolidation started. Five mobile carriers became two -- Globe bought Islacom, Smart took over Piltel, and Extelcom went into into financial distress. And those who bet on landline or international went into distress -- PLDT had debt issues, then Smart bought PLDT (but PLDT became the parent), Piltel’s landline went to PLDT, Bayantel was in receivership, PT&T likewise. By 1998-2000, only PLDT/Smart and Globe, with good business models, strong shareholders and scale, were surviving. That was also the strongest growth period in the era of voice/SMS.
The government actually gave Digitel, a small landline company, a mobile license, as they felt the need to have a third mobile player. It took them five years to get to a scale to be a serious third player with more than 10% share.
When 3G arrived, the frequency standards allowed the government to grant 5 licenses: three to the existing players, plus a new one (Cure), and a fifth that Bayan says should have gone to them. Given efficiencies of scale, Cure was bought by Smart, and eventually Bayan got bought by Globe. Digitel by PLDT. So back to two main telco groups. (Thank you to Gil Genio, EVP of Globe for refreshing my recall of all of this.)
So as you can see, there are many reasons why the Philippines ended up with two major telcos -- scale, continuing high capex requirement that can only be funded from overseas or by ploughing back profits into the business, infra difficulties that give incumbents advantage, and in mobile, limits on how frequency are sliced up.
Is this resulting two player structure inimical to public interest?
I think only if they behave in a non-competitive way.
From everything I have seen as a Board Director for over a decade, there is not only competition, but fierce competition.
Globe as the challenger has played its role to the hilt. It has been gaining market share through innovation and improvement in services. For the public, evidence of this abound -- look at the billboards and TV ads, or the daily SKU battle in prepaid, or how for P15 one can get unlimited calling and texting for a day, and how mobile Internet prices have come down -- these are the indicia of competition.
Moreover, more players do not mean better service. Europe is a good example. They had a lot of players competing that led to price competition lowering of EBITDA margins (aside from an aggressive regulator). This has taken away the ability of these telcos to spend for needed rollouts. Eventually, the markets began to consolidate leaving a small number of players. Incidentally in the case of Globe (and I believe likewise for PLDT) it is reinvesting 28%-33% of revenues for capex, significantly more than telcos in most other countries.
Ultimately, it is not concentration per se but harmful behavior that indicates lack of competition that the Competition Law (RA 10667) is concerned about. Even before the passage of that law, Globe has always placed the interest of consumers at the center of its business, the sine qua non for long-term profitability and sustainability of Globe, and the industry. (See “Demonopolizing Telecommunications”).
(The next installment of this column will address observations on poor or costly broad band service of local telcos vs peers, why this is true for fixed line infrastructure but not for mobile, factors that explain these, and what government can do to improve service. Also why the re-assignment of the 700 mhz frequency band from SMC will help majorly advance the interest of consumers vs alternative courses.)
Romeo L. Bernardo is GlobalSource Partners Philippine advisor. He served as Finance undersecretary during the Aquino-1 and Ramos administrations.
source: Businessworld
Friday, September 9, 2011
De-monopolizing telecommunications
Business World
Introspective
Two key issues on telecommunications have lately hogged business headlines: a) the PLDT-Digitel Merger, and b) the proposed National Broadband project. Both these issues test the clarity of government's development vision and its commitment to sound regulation and competition policy. Its decisions will impact not only the efficiency of delivery of telephony and data services to both private users and government, but our country's competitiveness and development over the long run.
Let me start with a disclosure - I am a board director of Globe Telecom. In a previous life, though, for over two decades, I was a civil servant at the Department of Finance and in multilateral institutions. There, I had a good view of the politics of economic reform, especially as undersecretary under the reform-minded Aquino 1 and Ramos administrations. With this background, I was asked, together with my colleague Christine Tang, to do a case study on the subject by the World Bank Growth Commission. (The Political Economy of Reform during the Ramos Administration, link
http://www.growthcommission.org/storage/cgdev/documents/gcwp039web.pdf). A key chapter, the De-monopolization of Telecommunications, documents the political and regulatory fortitude needed to dislodge entrenched interests.
THEN
It starts with a quote attributed to Singapore Senior Minister Lee Kuan Yew in 1992: The Philippines is a country where 98 percent of the residents are waiting for a telephone and the other 2 percent are waiting for a dial tone. Indeed it best describes the situation of the domestic telecommunications industry in 1992. An estimated 800,000 applicants, 75% in the country's capital, Metro Manila, were queuing for a telephone line. At the time, the Philippine Long Distance Telephone Company (PLDT), which owned the only nationwide transmission backbone, was a virtual monopoly, controlling over 90% of the country's telephone lines. Its controlling shareholder was politically well connected, its influence extending across the three branches of government as well as the media.
None of the telephone companies operating at the time were in a position to challenge PLDT's leadership. Following news accounts, PLDT, instead of expanding its network to meet service demand, spent heavily for the protection of its market share. For instance, when the previous government decided to open up the sector to competition, reports indicate that PLDT was able to secure as needed favorable legal rulings to block prospective entrants. It had apparently been a risky venture for the president to go after PLDT. If he loses in this duel, the president's credibility as a strong leader will be severely dented, observed one report at the time.
Nevertheless, the Ramos administration proceeded to pry the sector open with various tactics... from encouraging the formation of consumer groups that took to the streets and clamored for change, to boardroom battles. One case reportedly led to the resignation of a Supreme Court justice whose decision favoring PLDT was alleged to have been written by a PLDT lawyer.
As a result, the twin executive orders (EO) that the president issued in 1993 opened the floodgates to investments in the sector. By the time Congress passed legislation largely echoing provisions of the two executive orders, the country's teledensity had doubled and PLDT had already embarked on a zero backlog program.
Our 2008 paper continues: Fifteen years on, the benefits of the reform may be seen in (i) increased access to telecommunication services, with teledensity in the cellular mobile telephone service (CMTS) segment of the market reaching 50 per 100 population in 2007; (ii) increased market competition with the entry of more players representing domestic and foreign interests; (iii) the rise of new growth industries such as business process outsourcing; and (iv) a whole new range of business solutions using cellular mobile telephone technology that caters to the retail client, such as money transfers for overseas workers. An interesting, perhaps ironic turn of events is that PLDT, which had strongly resisted the reform, managed to shape up and emerged a big winner of the reform....
NOW
Fast forward to the present. PLDT, under new controlling ownership, proposes to acquire Sun-Digitel, threatening to reestablish a near monopoly situation. Together, the combined companies will control 73% of the market. Even more tellingly, the combined PLDT-Digitel will control three out of the four blocks of telephone frequencies - 75% of the highway for delivering the service. This level of control is against the spirit, if not a direct contravention of the Ramos era EO which sought to limit each telco to only one bloc.
This issue has been recently deliberated in the appropriate Senate committee whose findings we await, and is now under consideration by the NTC. What was made clear during the hearings is that nowhere in the world is such a degree of concentration allowed without putting effective limitations on the dominant provider. For example, in the US, the recent AT &T/T-Mobile merger triggered alarm bells in the US top anti-trust agency even though both carriers combined subscriber bases would amount to a little less than 44% of the total wireless market. Well established regulatory regimes everywhere else would have done the same.
Widely followed analyst Boo Chanco wrote in his latest column about the ill-advised revival of the National Broadband project. He provided yet another reason why we need to strengthen competition in the industry. To combat the fear of Secretary Montejo that our private telcos might overcharge government for telco services, he cited that two noted economists (Dr. Raul Fabella and Dr. Noel de Dios) at that meeting with the secretary urged government to make sure no one of the private telcos gain even near monopoly powers. Government must exercise its function and duty to regulate the telcos not just to get the prices they are seeking for government operations but for the sake of the consumers as well.
I am hopeful that the present regulators - and the national leadership - will be equal to the challenge of the times.
Mr. Romeo Bernardo is a Philippine GlobalSource Partners advisor, managing director of Lazaro Bernardo Tiu & Associates, Inc. and a board member of The Institute for Development and Econometric Analysis, Inc, (IDEA).
Introspective
Two key issues on telecommunications have lately hogged business headlines: a) the PLDT-Digitel Merger, and b) the proposed National Broadband project. Both these issues test the clarity of government's development vision and its commitment to sound regulation and competition policy. Its decisions will impact not only the efficiency of delivery of telephony and data services to both private users and government, but our country's competitiveness and development over the long run.
Let me start with a disclosure - I am a board director of Globe Telecom. In a previous life, though, for over two decades, I was a civil servant at the Department of Finance and in multilateral institutions. There, I had a good view of the politics of economic reform, especially as undersecretary under the reform-minded Aquino 1 and Ramos administrations. With this background, I was asked, together with my colleague Christine Tang, to do a case study on the subject by the World Bank Growth Commission. (The Political Economy of Reform during the Ramos Administration, link
http://www.growthcommission.org/storage/cgdev/documents/gcwp039web.pdf). A key chapter, the De-monopolization of Telecommunications, documents the political and regulatory fortitude needed to dislodge entrenched interests.
THEN
It starts with a quote attributed to Singapore Senior Minister Lee Kuan Yew in 1992: The Philippines is a country where 98 percent of the residents are waiting for a telephone and the other 2 percent are waiting for a dial tone. Indeed it best describes the situation of the domestic telecommunications industry in 1992. An estimated 800,000 applicants, 75% in the country's capital, Metro Manila, were queuing for a telephone line. At the time, the Philippine Long Distance Telephone Company (PLDT), which owned the only nationwide transmission backbone, was a virtual monopoly, controlling over 90% of the country's telephone lines. Its controlling shareholder was politically well connected, its influence extending across the three branches of government as well as the media.
None of the telephone companies operating at the time were in a position to challenge PLDT's leadership. Following news accounts, PLDT, instead of expanding its network to meet service demand, spent heavily for the protection of its market share. For instance, when the previous government decided to open up the sector to competition, reports indicate that PLDT was able to secure as needed favorable legal rulings to block prospective entrants. It had apparently been a risky venture for the president to go after PLDT. If he loses in this duel, the president's credibility as a strong leader will be severely dented, observed one report at the time.
Nevertheless, the Ramos administration proceeded to pry the sector open with various tactics... from encouraging the formation of consumer groups that took to the streets and clamored for change, to boardroom battles. One case reportedly led to the resignation of a Supreme Court justice whose decision favoring PLDT was alleged to have been written by a PLDT lawyer.
As a result, the twin executive orders (EO) that the president issued in 1993 opened the floodgates to investments in the sector. By the time Congress passed legislation largely echoing provisions of the two executive orders, the country's teledensity had doubled and PLDT had already embarked on a zero backlog program.
Our 2008 paper continues: Fifteen years on, the benefits of the reform may be seen in (i) increased access to telecommunication services, with teledensity in the cellular mobile telephone service (CMTS) segment of the market reaching 50 per 100 population in 2007; (ii) increased market competition with the entry of more players representing domestic and foreign interests; (iii) the rise of new growth industries such as business process outsourcing; and (iv) a whole new range of business solutions using cellular mobile telephone technology that caters to the retail client, such as money transfers for overseas workers. An interesting, perhaps ironic turn of events is that PLDT, which had strongly resisted the reform, managed to shape up and emerged a big winner of the reform....
NOW
Fast forward to the present. PLDT, under new controlling ownership, proposes to acquire Sun-Digitel, threatening to reestablish a near monopoly situation. Together, the combined companies will control 73% of the market. Even more tellingly, the combined PLDT-Digitel will control three out of the four blocks of telephone frequencies - 75% of the highway for delivering the service. This level of control is against the spirit, if not a direct contravention of the Ramos era EO which sought to limit each telco to only one bloc.
This issue has been recently deliberated in the appropriate Senate committee whose findings we await, and is now under consideration by the NTC. What was made clear during the hearings is that nowhere in the world is such a degree of concentration allowed without putting effective limitations on the dominant provider. For example, in the US, the recent AT &T/T-Mobile merger triggered alarm bells in the US top anti-trust agency even though both carriers combined subscriber bases would amount to a little less than 44% of the total wireless market. Well established regulatory regimes everywhere else would have done the same.
Widely followed analyst Boo Chanco wrote in his latest column about the ill-advised revival of the National Broadband project. He provided yet another reason why we need to strengthen competition in the industry. To combat the fear of Secretary Montejo that our private telcos might overcharge government for telco services, he cited that two noted economists (Dr. Raul Fabella and Dr. Noel de Dios) at that meeting with the secretary urged government to make sure no one of the private telcos gain even near monopoly powers. Government must exercise its function and duty to regulate the telcos not just to get the prices they are seeking for government operations but for the sake of the consumers as well.
I am hopeful that the present regulators - and the national leadership - will be equal to the challenge of the times.
Mr. Romeo Bernardo is a Philippine GlobalSource Partners advisor, managing director of Lazaro Bernardo Tiu & Associates, Inc. and a board member of The Institute for Development and Econometric Analysis, Inc, (IDEA).
21 June 2016
Philippines joins list of most promising FDI destinations
THE PHILIPPINES has emerged as among the world’s most promising destinations of foreign investments in the next three years, according to the United Nations Conference of Trade and Development (UNCTD).
In its World Investment Report 2016, UNCTD said the US, China and India remain the top destinations of investments by multinational enterprises (MNEs) between this year and 2018. However, the US, which since last year has shown signs of economic recovery, displaced China in this year’s UNCTD survey among executives belonging to the 100 biggest non-financial MNEs.
China was the top choice when the UNCTD last held its survey in 2014, or before the world’s second largest economy showed signs of slowing down.
The Philippines joined the top 15 destinations, placing eighth, along with Australia, France and Malaysia, which in the previous survey round ranked 14th.
The report recognized the “noteworthy measures” of the Philippines to liberalize foreign investments, particularly in removing the foreign ownership restriction on lending firms, investment houses, and financing companies, as well as reducing the number of professions reserved for nationals.
Another Southeast Asian economy new on the list is Myanmar, which ranked ninth along with Vietnam, which in turn rose from the 18th spot during the 2014 survey round.
Seven of the top 15 choice locations belong to emerging Asia, of which 5 came from Southeast Asia, with Indonesia steaming ahead on seventh place, and like Malaysia was on the 14th spot in 2014.
FDI FLOWS SURGE IN 2015
Global foreign direct investment (FDI) flows in 2015 surged by 38 per cent to $1.76 trillion, the world’s highest level since the global economic and financial crisis of 2008 -- 2009, UNCTD said, adding that the growth rode on the increase of cross-border mergers and acquisitions (M&As) to $721 billion, nearly 67% higher than the $432 billion in 2014.
Inward FDI flows to developed economies reached $962 billion, the UNCTD said.
“As a result, developed economies tipped the balance back in their favour with 55% of global FDI, up from 41% in 2014. Strong growth in inflows was reported in Europe. In the United States FDI almost quadrupled, albeit from a historically low level in 2014.”
Developing economies drew $765 billion of FDI inflows, or 9% higher than in 2014, as said economies continue to compose half of the top 10 destinations of FDI flows.
Developing Asia remains the largest FDI recipient region globally, with inflows amounting to $541 billion, or a 16% increase.
Going forward, UNCTD expects FDI flows to decline around 10%-15% this year, mirroring the “fragility of the global economy, persistent weakness of aggregate demand, sluggish growth in some commodity exporting countries, effective policy measures to curb tax inversion deals and a slump in MNE profits.”
Growth is expected to get back on track in 2017, with UNCTD predicting FDI flows to go beyond $1.8 trillion in 2018. -- Roy Stephen C. Canivel
source: Businessworld
In its World Investment Report 2016, UNCTD said the US, China and India remain the top destinations of investments by multinational enterprises (MNEs) between this year and 2018. However, the US, which since last year has shown signs of economic recovery, displaced China in this year’s UNCTD survey among executives belonging to the 100 biggest non-financial MNEs.
China was the top choice when the UNCTD last held its survey in 2014, or before the world’s second largest economy showed signs of slowing down.
The Philippines joined the top 15 destinations, placing eighth, along with Australia, France and Malaysia, which in the previous survey round ranked 14th.
The report recognized the “noteworthy measures” of the Philippines to liberalize foreign investments, particularly in removing the foreign ownership restriction on lending firms, investment houses, and financing companies, as well as reducing the number of professions reserved for nationals.
Another Southeast Asian economy new on the list is Myanmar, which ranked ninth along with Vietnam, which in turn rose from the 18th spot during the 2014 survey round.
Seven of the top 15 choice locations belong to emerging Asia, of which 5 came from Southeast Asia, with Indonesia steaming ahead on seventh place, and like Malaysia was on the 14th spot in 2014.
FDI FLOWS SURGE IN 2015
Global foreign direct investment (FDI) flows in 2015 surged by 38 per cent to $1.76 trillion, the world’s highest level since the global economic and financial crisis of 2008 -- 2009, UNCTD said, adding that the growth rode on the increase of cross-border mergers and acquisitions (M&As) to $721 billion, nearly 67% higher than the $432 billion in 2014.
Inward FDI flows to developed economies reached $962 billion, the UNCTD said.
“As a result, developed economies tipped the balance back in their favour with 55% of global FDI, up from 41% in 2014. Strong growth in inflows was reported in Europe. In the United States FDI almost quadrupled, albeit from a historically low level in 2014.”
Developing economies drew $765 billion of FDI inflows, or 9% higher than in 2014, as said economies continue to compose half of the top 10 destinations of FDI flows.
Developing Asia remains the largest FDI recipient region globally, with inflows amounting to $541 billion, or a 16% increase.
Going forward, UNCTD expects FDI flows to decline around 10%-15% this year, mirroring the “fragility of the global economy, persistent weakness of aggregate demand, sluggish growth in some commodity exporting countries, effective policy measures to curb tax inversion deals and a slump in MNE profits.”
Growth is expected to get back on track in 2017, with UNCTD predicting FDI flows to go beyond $1.8 trillion in 2018. -- Roy Stephen C. Canivel
source: Businessworld
20 June 2016
US govt: Duterte behind the Davao Death Squad
Presidential candidate Rodrigo Duterte is finally getting the recognition that he’s been seeking – that he is what he is, a tough guy, maybe even a killer. He is now squarely in the radar of the US government.
According to US State Department documents released by Wikileaks, the US government has “solid evidence” that Duterte is responsible for the extra-judicial killings and enforced disappearances in Davao City.
When fellow presidential candidate Grace Poe announced on April 14 that she would appoint Duterte as crime czar if she won the presidency, Washington took notice. “I want to offer to him the position as crime czar because of what he said that he will finish the problems of criminality in six months,” Poe said. This prompted officials and journalists to check their files and dossiers on Duterte.
Solid evidence vs Duterte
What they found was jaw-dropping. Poe’s crime czar is most likely a criminal. Duterte is considered a criminal by the US government. Based on “solid evidence,” the State Department has established that “Mayor Duterte of Davao City is clearly behind a group called the Davao Death Squad.”
What they found was jaw-dropping. Poe’s crime czar is most likely a criminal. Duterte is considered a criminal by the US government. Based on “solid evidence,” the State Department has established that “Mayor Duterte of Davao City is clearly behind a group called the Davao Death Squad.”
This is the shocking revelation of a global investigation outfit, Open Source investigations (ISI), which has specialized in the disclosure of information on important political issues and political personalities, since the group was publicly announced in Sept. 2015 and opened its Facebook page on Dec. 2.
This revelation surpasses in gravity the earlier controversy stirred by Duterte with his vile remarks about the Australian lay missionary rape victim in Davao.
The Open Source report said the US State Department is convinced that Duterte “supports” and “encourages” the extra-judicial killings in Davao City. He is the one who decided “to green light” the Davao Death Squad (DDS).
It was Mayor Duterte himself who privately “acknowledged his active support of the DDS group.” He made the admission during a 2003 meeting with political officers of the US Embassy in Manila. And he did it again, two years later during a conversation with an official from the Embassy of Australia in Manila. Duterte told the Australian officer that “killings were what criminals understood” and that this was “the way things are done here.”
The State Department has “documented evidence of hundreds of vigilante-style killings of civilians in Davao City” since the late ‘90s.
The DDS, a vigilante group “formed by the mayor,” carried out many of the killings. DDS is an underground network made up of former criminals and militants, perpetrating killings in exchange for payment. Victims are “usually street children and petty criminals.”
The State Department said that Duterte should be brought to justice. In its assessment, local police failed to investigate the crimes and protect witnesses. In fact, the Davao police, “who are controlled by the Mayor,” support the killings. The investigations of the Philippine National Police (PNP) have been of no avail and the killings have been spreading to other localities
The US has deplored the Davao killings and has privately urged the Philippine government to undertake a thorough investigation.
“A separate investigation into Mayor Duterte’s connection to the killings” should be opened, the US recommended.
Open Source background
Open Source Investigations (OSI) describes itself as an independent initiative that aims to connect common people with the reality behind open scene of politics.
Open Source Investigations (OSI) describes itself as an independent initiative that aims to connect common people with the reality behind open scene of politics.
On its sleek-looking site, which appears well-funded, the group claims that it is composed of “investigative journalists, researchers, fact-checkers, activists, and data experts, who have teamed up to provide in-depth research behind political stories.”
“By supplying non-partisan and precise analyses and investigations, OSI Group website is a source of information that makes citizens more aware of how politics affects their lives,” it said.
Rodrigo Duterte is not alone in attracting the interest and investigative zeal of OSI.
Grace Poe has gotten considerable attention as well.
Biggest secret of Grace Poe’s husband
The latest post of Open Source on Ms. Poe concerns her husband, Teodoro Misael “Neil” Llamanzares.
The latest post of Open Source on Ms. Poe concerns her husband, Teodoro Misael “Neil” Llamanzares.
It disclosed that Neil Llamanzares’ biggest secret is that he is a former contractor of the US National Security Agency (NSA) and the Central Intelligence Agency.
The report said: “Neil Llamanzares, the potential First Gentleman of the Philippines, is not only an American military man, but also a former US Intelligence contractor. As an employee of the largest private intelligence service in the world, SAIC, Grace Poe’s husband was doing specialized work for NSA, CIA and DIA: tracking foreign communications on the internet, feeding disinformation to the foreign press, integrating classified information gathered by the major US intelligence agencies worldwide.
“At least from 2004 to 2006, as long as he worked for SAIC, the state of the Philippines was one of Neil Llamanzares’s targets.”
The report averred that there was “a partial truth in Grace Poe’s web of lies.”
“Neil Llamanzares did stay in the US until May 2006. He did sell their million-dollar mansion. And he did have very important projects to finish. But both Grace Poe and her husband kept the nature of those important projects secret.
“And that is because the Philippine presidential candidate’s husband is a former US Intelligence contractor.
“Neil Llamanzares stayed in the US to work for the largest private intelligence services in the world, Scientific Applications International Corporation (SAIC). SAIC has a symbiotic relationship with the National Security Agency (NSA). For years, SAIC was NSA’s largest contractor, earning the nickname “NSA West” inside the intelligence community.
“SAIC also does a huge amount of work for the CIA, where it is among the top five contractors, and is deeply involved in the operations of all the major US intelligence agencies (Defence Intelligence Agency – DIA, Office of the Director of National Intelligence – ODNI, National Reconnaissance Office – NRO).
“In March 2007, Donald Barlett and James B. Steele published a profile of SAIC in Vanity Fair. Two-time Pulitzer Prize winners, Barlett and Steele are two of the most important investigation journalists in the history of American media.”
The title of the Barlett-Steele article, “Washington’s $8 Billion Shadow,” shows that SAIC is a very big deal in the intelligence business.
Take a second look at Neil
To the Filipino intelligentsia, Grace Poe may look like a rank amateur, who is out of her depth in running for the presidency. But her husband is no amateur; he is a professional.
To the Filipino intelligentsia, Grace Poe may look like a rank amateur, who is out of her depth in running for the presidency. But her husband is no amateur; he is a professional.
When some politicians and journalists suspect Sen. Chiz Escudero of being the puppeteer behind Grace Poe, they are mistaken. There is a better man at the controls. And he knows his stuff.
Talk about Grace Poe being a Manchurian candidate is not a mere fantasy of people who have seen too many movies.
When you look at the shadow of Neil Llamanzares behind Grace Poe, the nation would be foolhardy not to take a second and careful look.
yenmakabenta@yahoo.com
Group says Duterte faces arrest if he visits US
Written by Mario J. Mallari, Monday, 25 April 2016
PDP-Laban presidential candidate Davao City Mayor Rodrigo Duterte will likely be arrested if he travels to the United States, an online foreign investigative group said, citing State Department documents released by Wikileaks.
Group says Duterte faces arrest if he visits US
Written by Mario J. Mallari, Monday, 25 April 2016
PDP-Laban presidential candidate Davao City Mayor Rodrigo Duterte will likely be arrested if he travels to the United States, an online foreign investigative group said, citing State Department documents released by Wikileaks.
source: Manila Times
13 June 2016
100 indicators better than GDP
Many people are getting impatient with gross domestic product (GDP) growth data, especially growth rates of 6% or higher, saying these numbers are “irrelevant”, “useless”, “misleading”, and “mean nothing” to their lives. Stronger criticisms of GDP growth numbers include “jobless growth” and “outright lies” that paint a rosy picture of an otherwise thorny and despicable society.
While there are some truths to these sentiments, especially for people who live under dictatorships and harsh political repression, a number of these sentiments are themselves misleading and full of angsts and misdirected anger.
One recent article that got circulated well in social media was published by the World Economic Forum (WEF) blog, “Five indicators better than GDP.” The author cited a study by the New Economics Foundation (NEF) and listed these five criteria as “better than GDP” and may imply that GDP data can be dispensed with:
1. Good jobs. Employment statistics tell us what proportion of people have jobs. They don’t tell us what proportion of those with jobs are paid too little to afford a decent standard of living, or worry about whether they’ll still have work next month.
2. Well-being. A growing economy is not an end in itself -- it’s a means to improving people’s lives. Few would disagree that the ultimate aim of public policy is well-being; we care about GDP because we assume it means more well-being. So why not also measure well-being directly?
3. Environment. The NEF proposes a national indicator of lifestyle-related carbon emissions, relative to an allocation calculated from global targets for avoiding dangerous levels of climate change.
4. Fairness. Research increasingly shows that high income inequality has negative social consequences, while casting doubt on the idea that it incentivises hard work.
5. Health. The NEF proposes “avoidable deaths” as a simple, easily-understandable measure that captures the quality of health interventions -- not only treatment, but also prevention.
Let us take for the sake of argument that we can dispense with, even throw away, GDP growth data and use those five indicators instead. Then other problems can crop up, like some people will complain, “Why only those five? Why not also include indicators on (6) affordable housing, (7) efficient public transportation, (8) good anti-flooding, (9) more CCT welfare, (10) cheap and stable electricity, (11) cheap nutritious food, (12) free or affordable university education,... (100) fast, free Wi-Fi.”
Thus, a replacement of “irrelevant, useless, misleading, jobless growth...” GDP data can actually result in numerous indicators that can raise more questions and suspicious how they are computed, what factors are included in their computation, for each of those 50 or 100 indicators.
So that WEF article, like many of its predecessor and similar papers, is lousy. Computing the GDP actually involves tons of data from so many sectors and sub-sectors. Whether computing the GDP on the demand side (GDP = C + I + G + [X-M]) or the supply side (GDP = gross value added in Agriculture + Industry + Services), lots of data in each of those factors in the equation are dug, verified, and counter-checked. An overstatement of the numbers last year to project a rosy achievement would mean possible understatement of the actual numbers this year, or further tinkering of the data to sustain the deception.
One problem with this method is that when people continuously torture data, the latter will confess and the real numbers will surface. So through time, various governments and their national statisticians have learned to respect their real data, and if they have to torture it, not too much otherwise the data will confess sooner than later.
Bottom line, GDP growth (or non-growth) data are the result of hundreds or thousands of nuances in each sub-sector of the economy, collating thousands of numbers to produce only two figures, (a) the value of the flow of goods and services in one year, and (b) growth rate over the previous year.
Having established this, let us now check GDP growth numbers of the Philippines compared to its neighbors in the region. I chose the years of each administration in the Philippines (see Table 1).
While there are some truths to these sentiments, especially for people who live under dictatorships and harsh political repression, a number of these sentiments are themselves misleading and full of angsts and misdirected anger.
One recent article that got circulated well in social media was published by the World Economic Forum (WEF) blog, “Five indicators better than GDP.” The author cited a study by the New Economics Foundation (NEF) and listed these five criteria as “better than GDP” and may imply that GDP data can be dispensed with:
1. Good jobs. Employment statistics tell us what proportion of people have jobs. They don’t tell us what proportion of those with jobs are paid too little to afford a decent standard of living, or worry about whether they’ll still have work next month.
2. Well-being. A growing economy is not an end in itself -- it’s a means to improving people’s lives. Few would disagree that the ultimate aim of public policy is well-being; we care about GDP because we assume it means more well-being. So why not also measure well-being directly?
3. Environment. The NEF proposes a national indicator of lifestyle-related carbon emissions, relative to an allocation calculated from global targets for avoiding dangerous levels of climate change.
4. Fairness. Research increasingly shows that high income inequality has negative social consequences, while casting doubt on the idea that it incentivises hard work.
5. Health. The NEF proposes “avoidable deaths” as a simple, easily-understandable measure that captures the quality of health interventions -- not only treatment, but also prevention.
Let us take for the sake of argument that we can dispense with, even throw away, GDP growth data and use those five indicators instead. Then other problems can crop up, like some people will complain, “Why only those five? Why not also include indicators on (6) affordable housing, (7) efficient public transportation, (8) good anti-flooding, (9) more CCT welfare, (10) cheap and stable electricity, (11) cheap nutritious food, (12) free or affordable university education,... (100) fast, free Wi-Fi.”
Thus, a replacement of “irrelevant, useless, misleading, jobless growth...” GDP data can actually result in numerous indicators that can raise more questions and suspicious how they are computed, what factors are included in their computation, for each of those 50 or 100 indicators.
So that WEF article, like many of its predecessor and similar papers, is lousy. Computing the GDP actually involves tons of data from so many sectors and sub-sectors. Whether computing the GDP on the demand side (GDP = C + I + G + [X-M]) or the supply side (GDP = gross value added in Agriculture + Industry + Services), lots of data in each of those factors in the equation are dug, verified, and counter-checked. An overstatement of the numbers last year to project a rosy achievement would mean possible understatement of the actual numbers this year, or further tinkering of the data to sustain the deception.
One problem with this method is that when people continuously torture data, the latter will confess and the real numbers will surface. So through time, various governments and their national statisticians have learned to respect their real data, and if they have to torture it, not too much otherwise the data will confess sooner than later.
Bottom line, GDP growth (or non-growth) data are the result of hundreds or thousands of nuances in each sub-sector of the economy, collating thousands of numbers to produce only two figures, (a) the value of the flow of goods and services in one year, and (b) growth rate over the previous year.
Having established this, let us now check GDP growth numbers of the Philippines compared to its neighbors in the region. I chose the years of each administration in the Philippines (see Table 1).
Then I got the average GDP growth for the yearly data of these 16 members of the Regional Comprehensive Economic Partnership (RCEP), plus Hong Kong and Taiwan as they are neighbors of the Philippines (see Table 2).
The above numbers show the following:
1. President Benigno S. C. Aquino III’s administration has experienced or facilitated the fastest growth of the Philippine economy over the past 3 decades. For his detractors who say that the 6.2% average growth rate was “meaningless”; perhaps an average growth of 2%-3% would have pacified them? Or they would be angrier because we could have grown much faster than 3%?
2. The fastest growing economies in the ASEAN in recent years is actually not the Philippines but Laos, Myanmar, and Cambodia. But these nations have low economic bases and hence, potential for growth is much higher than countries with bigger economic bases. Would the GDP detractors or skeptics also dismiss the growth achievement of these three countries as “meaningless and irrelevant”?
3. From 1980-1997, the Philippines has the slowest growth rate in the Asia Pacific except Brunei and Japan, earning the ugly label of the “sick man of Asia” for nearly two decades. Would the local GDP bashers consider that fact as “meaningful, relevant” because the Philippines was the laggard?
Readers can make their own interpretations and conclusions of the economic performance of the Philippines and other countries from the table.
High GDP growth almost always create more jobs. If people are jobless even temporarily, there are at least two possible explanations. (a) They simply want to bum around and their rich parents or siblings, etc. can feed them; or (b) they are industrious but have high “reservation wage”, meaning if are offered P20k a month job, they reject because they are waiting for a P25k a month or higher job offer.
High GDP growth expectation also produce high employment and wage expectations. That is why some people who receive P30k a month last year are disappointed that they only get a raise to P31k this year instead of P35k or higher, so when SWS or other surveyors come to ask about their standard of living, they feel bad or poor. And they become one of the GDP skeptics/bashers.
Not that I am a fan of centralized economic planning. I only with to point here that GDP bashing is actually more bashful than the subject that they deride.
Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET and Stratbase-ADRi.
minimalgovernment@gmail.com
1. President Benigno S. C. Aquino III’s administration has experienced or facilitated the fastest growth of the Philippine economy over the past 3 decades. For his detractors who say that the 6.2% average growth rate was “meaningless”; perhaps an average growth of 2%-3% would have pacified them? Or they would be angrier because we could have grown much faster than 3%?
2. The fastest growing economies in the ASEAN in recent years is actually not the Philippines but Laos, Myanmar, and Cambodia. But these nations have low economic bases and hence, potential for growth is much higher than countries with bigger economic bases. Would the GDP detractors or skeptics also dismiss the growth achievement of these three countries as “meaningless and irrelevant”?
3. From 1980-1997, the Philippines has the slowest growth rate in the Asia Pacific except Brunei and Japan, earning the ugly label of the “sick man of Asia” for nearly two decades. Would the local GDP bashers consider that fact as “meaningful, relevant” because the Philippines was the laggard?
Readers can make their own interpretations and conclusions of the economic performance of the Philippines and other countries from the table.
High GDP growth almost always create more jobs. If people are jobless even temporarily, there are at least two possible explanations. (a) They simply want to bum around and their rich parents or siblings, etc. can feed them; or (b) they are industrious but have high “reservation wage”, meaning if are offered P20k a month job, they reject because they are waiting for a P25k a month or higher job offer.
High GDP growth expectation also produce high employment and wage expectations. That is why some people who receive P30k a month last year are disappointed that they only get a raise to P31k this year instead of P35k or higher, so when SWS or other surveyors come to ask about their standard of living, they feel bad or poor. And they become one of the GDP skeptics/bashers.
Not that I am a fan of centralized economic planning. I only with to point here that GDP bashing is actually more bashful than the subject that they deride.
Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET and Stratbase-ADRi.
minimalgovernment@gmail.com
source: Businessworld
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