A good year for the Philippines and its businessmen

(The Year of the Metal Rabbit begins on Feb. 3, 2011. Photo from the Feng Shui Clinic)
THE year of the Metal Rabbit, which begins on February 3, will be a better year for Philippine business and the economy in general.

This is not surprising as most of the country’s leading business personalities are themselves fortunate this year, per the readings of Joseph Chau, resident geomancer/feng shui practitioner of the Mandarin Oriental Manila.

The luck is not limited to the country’s top chief executives but its political leaders, as well, such as President Aquino and Vice President Jejomar Binay, and the Aquino administration’s officials overseeing the economy.

In a press conference on Monday, Chau said the dominant elements this year will be metal and wood, so the businesses that will be generally profitable this year are car-selling, banking and mining, especially in gold, while wood would connote garments, bookstores and the publishing industry.

Because the Philippines was born on June 12, 1898, (Aguinaldo’s Independence Day), that makes it an Earth Dog.

According to Chau, “Dogs are the most compatible zodiac sign of the Year of the Rabbit,” and as such, he sees the Philippine economy “going up” this year.

(The lucky ones - from left: Jaime Augusto Zobel de Ayala II, Erramon Aboitiz, Manuel Lopez, Teresita Sy-Coson. Illustrations from BusinessMirror.)

Other businesses that are good to invest in are in tourism such as hotels, the medical sector and agriculture—the latter, particularly, “will be prosperous in the next 10 years.”

Those working in the entertainment industry, especially those in films, will see their movies making money, as it is ruled by the metal element, as well.

He advises the tourism leaders to promote more Philippine culture, “which will attract more tourists.”

He added that an orderly transportation industry, where cab drivers, for instance, properly register their names, would boost the tourism sector, and travelers will find them more trustworthy.

The year of the Metal Rabbit bodes well for those born in the year of the Dog (1922, 1934, 1946, 1958, 1970, 1982, 1994, 2006), such as PLDT chairman and Meralco President Manuel V. Pangilinan and beer and tobacco tycoon Lucio Tan.

Chau said the work of Dogs “will be comparatively going smooth. Businessmen will get the help of their benefactors. Financially, money luck is promising, especially in the second half of the year. Many opportunities are open for them or in partnership with others.”

(From left: Manuel V. Pangilinan, President Noynoy Aquino, Vice President Jojo Binay, Finance Secretary Cesar Purisima)

This is also a fortunate year for those born in the Year of the Rat (1924, 1936, 1948, 1960, 1972, 1984, 1996), such as President Aquino, Finance Secretary Cesar Purisima and Jaime Augusto Zobel de Ayala, chairman and chief executive officer of the Ayala Corp.

“Everything tends to be more stable and smooth, especially because there are two lucky stars shining bright within the sign. Businessmen will have many opportunities for their business development or expansion. Financially, this is a fortunate year for Rats. They will have a steady income from different sources.”

However, Chau points to the relatively unlucky location of Malacañang and suggested that President Aquino put a water fountain in his office, if he doesn’t want to move his office to another location from the Premier Guest House. This would improve his luck and promote clarity in his decision-making.

If Purisima is lucky this year, perhaps leading the government to keep its budget deficit at decent levels, so is Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr., who is a Dragon (1928, 1940, 1952, 1964, 1976, 1988, 2000), which will hopefully mean a tame inflation and stable peso for the country.

“This is a successful year for Dragons,” said Chau. “However, they have to take preventive measures to avoid unexpected problems that might happen. They should make use of this year to carry out their new projects with great planning. Financially, Dragons will have better luck in money affairs and it is promising.”

Asked about the President’s prospects in terms of love, the master geomancer advises him to look for a woman “who was born in winter—November and December.” The most compatible sign for a mate for him would be a woman born in the Year of the Pig (1947, 1959, 1971, 1983, 1995). Pigs are described as honest creatures, gallant, sturdy, sociable, peace-loving, patient, loyal, hard-working, etc., and is one of the luckiest signs in 2011.

(From left: Ramon S. Ang, Lance Gokongwei, Lucio Tan, BSP Gov. Say Tetangco)
Horses (1930, 1942, 1954, 1966, 1978, 1990, 2002), such as San Miguel president Ramon Ang, Lopez Group Holdings CEO Manuel Lopez and JG Summit Holdings president and chief operating officer Lance Gokongwei, will find their luck “improving” this year.

Chau said: “Since the Moon Star shines bright this year, they will have better luck in expanding their personal communication network that will help them have a better prospect both at work and business. Financially, [they] will have better luck developing their businesses.

Vice President Binay, who is also a Horse and regularly joins the Mandarin Oriental’s Chinese New Year parade, will “work well together” with President Aquino this year.

Tigers (1926, 1938, 1950, 1962, 1974, 1986, 1998, 2010) like SM Investments vice chairman and Banco de Oro chairman Teresita Sy-Coson will find 2011 “a productive year.”

According to Chau, “It is good timing for their business expansion. Their career luck is going smooth. They will have the ability to handle all their tough work and challenges. They should treasure this lucky year to show their ability both at work and business. Money luck is pretty good, and it is on the upswing. They will have a profitable return from their investment.”

It is important for Monkeys (1920, 1932, 1944, 1956, 1968, 1980, 1992, 2004), like Aboitiz Equity Ventures president and CEO Erramon Aboitiz, “to have a good strategy plan in the beginning of the year if they wish to have a productive and successful year,” said Chau.

(Master Joseph Chau, resident feng shui expert/geomancer of the Mandarin Oriental, Manila. Photo by MOMNL)

“Financially, this is a fortunate year in money affairs….However, they should avoid being in partnership with people, especially between friends and relatives, or they will be cheated.”

The unlucky signs this year are, ironically, the Rabbit (1927, 1939, 1951, 1963, 1975, 1987, 1999, 2011) and the Rooster (1921, 1933, 1945, 1957, 1969, 1981, 1993, 2005).

While Rats, Horses and Dogs are generally unlucky signs, those in business appear to be on a prosperous path but have to pay attention to their health and love lives.

Those born under the Snake sign will, likewise, find themselves generally unlucky. But those working overseas will be prosperous.

Chau said the lucky colors this year are gold, silver, white, sky blue, green, red, pink, violet, peach and orange.

(My story was originally published in the BusinessMirror, Jan. 25, 2011.)

While no one was looking...

...the Bureau of Internal Revenue quietly changed its list of the Top 500 Individual Taxpayers of 2009. As per media colleague Inday Espina-Varona of ABS-CBN's Boto Mo Patrol Mo group, one of those named in the initial list actually only paid P300,000 and not the P57 million as purported by the government agency. The person complained that that kind of wrong info would attract kidnappers, when he/she was basically just from the middle class...not that anyone deserves to be kidnapped.

Of course, there are still lingering questions on why some taipans (and taipanettes) are not included in this list. I can only say, those guys may have hired better accountants and tax lawyers to do their taxes. In fact, one former BIR tax agent is reportedly the tax accountant of a major Philippine company with Castilaloy leanings. As you know, BIR employees know enough of the country's tax laws and tax codes to exploit any possible loopholes. So there.

Anyhoo, this is the updated BIR list. Thanks for the heads up, Inday.

Top 500 Individual Taxpayers 2009 (Updated)

Top taxpayers in the Philippines 2009

Celebrities, businessmen among top taxpayers

MANILA, Philippines - Celebrities like Wilfredo "Willie" B. Revillame and businessmen like San Miguel Corp. top honcho Ramon S. Ang landed on the Bureau of Internal Revenue’s (BIR) list of the biggest taxpayers for 2009, along with telecommunication giants Smart Communications, Inc. and Globe Telecom, Inc.

The lists of top 500 individual and top 500 corporate taxpayers have been published on the bureau’s Web site, in compliance with Section 71 of the National Internal Revenue Code of 1997 that states "the Commissioner may... publish a list containing the names and addresses of persons who have filed income tax returns," BIR Commissioner Kim S. Jacinto-Henares said in a phone interview Sunday. (The rest at ABS-CBN.)

FOR the public's convenience, here are the lists of the top 500 individual and corporate taxpayers in the Philippines, as per the Bureau of Internal Revenue:

Top 500 Individual and Corp. Taxpayers 2009

Bayan bago sarili

Oras na. Roxas na!

* * * *
BTW, I just wanted to alert everyone on the Black Ops being perpetrated by the camp of another presidentiable vs Noynoy and Mar. They labeled a can of sardine and bottled water w/ the "Operation Tulong Bayan Aquino-Roxas" and photographed via cellphone. Then they sent the photo out via Facebook, tagging columnists and his party-mates.

Operation Tulong Bayan was a movement set up in the aftermath of Typhoon Ondoy to collect donations and distribute them to the typhoon victims. Let me tell you that I was part of OTB along with hundreds of young people who selflessly volunteered their time to help our kababayan in need. We know for a fact that none of us put labels on those items w/c were distributed as it was a non-political effort. Many of them will be able to testify to this fact.

(At the OTB headquarters, in Sept. 2009: unlabeled care packages ready for distribution to typhoon victims. Photos by Stella Arnaldo)

(The kids who made Operation Tulong Bayan possible. Are you seriously accusing them of politicking?)

The entire world knows which presidential candidate labeled his Ondoy donations with his name and political colors. Just because his numbers in the surveys are still behind, he is now trying to turn the tables around, by accusing front runners Noynoy and Mar of the same. W/ all the money that this presidentiable has, he should've just use it instead to print more of his posters, bec. no one will believe this lame black ops. Besides the photo is four months late, nyeh! SMB! (Style mo bulok!)

Looking forward to 2010!

CHRISTMAS cards are meant to convey the warm wishes and joyful feelings of the holiday season.





They usually come in cheery, or funny, or spiritual types, like some of those posted on this page.



So you can just imagine how befuddled some people felt when they received a Christmas card from the government-run National Statistical Coordination Board. (For those who don't know, the NSCB is the repository of all official govt data such as the GDP, inflation, remittances, income, population, etc.)


Most of the data just show how mucht the economy sputtered in 2009 compared to 2008 (e.g. 3Q 2009 GDP growth rate was 0.5% compared to 4.6% in 3Q 2008, or the poverty rate in 2006 was 32.9% of the population compared to 30% in 2003.) Depressing di ba?

Of course we don't need NSCB's greeting card to know how poorly our country has fared over the years under the presidentita's administration. But hey, at least the academics at the NSCB managed to turn that glaring reality into a positive, and made an unforgettable Christmas card huh? With any luck, maybe under the next administration, NSCB's Christmas cards will feature much improved economic data.

With that last bitching for the year, let me wish everyone all the best for 2010!

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Whoopsie! Before I forget, check out Professional Heckler's fearless forecasts for 2010, and die laughing. Aba! Feeling Madam Auring! ;p

Important news we missed while we were glued to the Hayden-Katrina faceoff

1. RP has now 10 H1N1 cases

Scary. Wash your hands well!

2. RP economy ‘teetering toward recession’

But I think we'll be okay this year. Spoke w/ some businessmen recently; the second quarter results look promising. You know what the Chinese say: "Crisis means opportunity."

3. BSP cuts interest rates

Well, if you think the interest rates on your savings accounts were too low, this move will cut them further. Even if you go to higher-yielding deposit instruments like SDA's or 5-yr tax-free special savings accounts, your interest rates will be eaten up by inflation.

4. Navy whistleblower Gadian surfaces at CA hearing

I hope Gadian's safety is well-secured. You know what happened to the other whistleblowers in the military.

5. Arroyo: There will be elections in 2010

Of course, we don't believe her. And looks like there's trouble in paradise as the Kampi head Luis Villafuerte was absent at the merger announcement this morning. He has resigned from the party in protest of the merger. Even former Phil. president Fidel V. Ramos, chairman emeritus of the Lakas-CMD party, was nowhere to be found. (Sick daw.)

According to broadcaster Ricky Carandang, the new merged party's name is PaLaKa. Hahahaha!

Good news...the sky isn't falling

Here's an interview I did of one exporter who isn't suffering from the economic crisis:

Mama Sita’s maker says global crisis will push its exports

COUNT this among the heartwarming exceptions to the adverse impact of the global crisis. Unlike most exporters, Marigold Commodities Corp. believes the economic crisis plaguing most of the Western hemisphere will actually boost by 25 percent this year the sales of its Mama Sita’s brand of marinades, mixes and sauces.

“Because we’re in the food business, we think the economic crisis will encourage more people to cook more at home. They’ll avoid eating out, so it’s more economical to buy our sauces or marinades, our mixes, and cook at home. Our mixes cost 69 cents across-the-board. So we’re hopeful our exports will still grow this year,” said Jane Rubinos-Taguinod, export sales manager of Marigold, in an interview with BusinessMirror. (Read the rest of my story here.)

Spend! Spend! Spend!

"Today, years after the recovery, even well-off Japanese households use old bath water to do laundry, a popular way to save on utility bills. Sales of whiskey, the favorite drink among moneyed Tokyoites in the booming ’80s, have fallen to a fifth of their peak. And the nation is losing interest in cars; sales have fallen by half since 1990." (Click here for the rest.)

I think we're in too much of a panic over this economic crisis. Things won't get worse than they already are. Our economy has been in a rut for the longest time, so it will be more of the same. How can you believe that Filipinos are so hard up when they're still at the mall eating, watching movies and shopping? Heck, even our househelp who comes in three times a week has bought a new TV recently! How? She sells Avon products. And according to her, people are still buying the products.

Unless you are in the export business, or in garments, or semi-conductors, you will still have a job tomorrow. But of course, you won't get a raise this year. Let me rephrase that...there are some exporters who will fold up this year, but some will keep growing. I've already interviewed two separate exporters who are projecting more than 10% growth in 2009. (Will post their stories soon.)

So if you have enough financial resources, go ahead and spend. Don't be shy if you are among the privileged class. But instead of buying foreign brands, may I encourage you to go local? You will help keep the economy afloat. Consider it your patriotic duty.

Here we go again (Updated)

U.S. President Barack Obama will be the featured speaker at the 57th National Prayer Breakfast hosted by by the U.S. Congress. And guess who's on the first plane to Washington D.C.?

“She really just wanted to have a photo opportunity with Mr. Obama," a source said, referring to President Arroyo, “even for one minute."

The officials of the Philippine Department of Foreign Affairs are pulling every string to make sure Mr. Obama gets her attention, a source added.

"This breakfast event used to be no big deal in DC until this year," the source said. (Read the rest here.)

At magfo-Four Seasons pa! Gee, whoever said the Philippines is in an economic crisis and has a massive budget deficit must be nuts!

And uyyy, yung isang pupunta din, si feeling Obama. LOL!

* * * *
UPDATE: According to a report on the ABS-CBN News web site, the presidentita failed to meet President Obama again. Geez, I dunno how much more humiliation she (and our country) can take! This woman just won't quit!

The audacity of hope*

THE second day of the New Year and I’m in a virtual coma. Too much food, too much to drink, and too many yappy relatives. You can understand why my brain is half-functioning today.

I could bore you with the details of my family’s Christmas Eve celebration (basically, it was eating, opening gifts, eating, drinking, more opening of presents, eating again, then sleep, only to be repeated the next day), or I could make up my New Year’s resolutions (stop eating pork, go to yoga class three times a week, walk more, read more books, less computer time, etc. etc. etc.). But what would that accomplish?

Mercifully, I read a news story about Filipinos feeling more hopeful for 2009. According to the latest survey from the Social Weather Stations, 92 percent of its respondents said they would be welcoming the New Year “with hope”, while only 8 percent said they would be entering 2009 “with fear.” Of course, we’re only talking about 1,500 respondents here, mostly living in Metro Manila, thus hardly a representative sampling of us 76 million Filipinos.

Still, I tend to believe the results. Sure the entire economy is pretty much in the dumps, no thanks to the presidentita, and her continued machinations to extend her term beyond 2010. But Filipinos are very much the contrapelo in any situation; even in tragedy, we smile our sadness away. Beaten down by economic and political burdens, we still crack jokes and laugh. When the stacks are all against us, we will try to find some way to be more optimistic.



I suppose we have no choice; we need to trust that our desperate lives or any negative situation will turn around, or we would all fling ourselves off the San Juanico bridge. The alternative is just too depressing to even think about.

Being mostly Roman Catholics and believing in some Higher Power who listens to our prayers and pleas for succor and comfort also help us banish whatever gloom threatens to engulf our being, especially during the critical days of Christmas. I know for a fact that many people who normally don’t go to Sunday Mass usually go to Church for midnight Christmas Eve Mass, ardently praying for more blessings in the New Year. (“Lord, I need a better job. Lord, I need more money to be able to buy food for the kids. Lord, I need you to inspire my son to study harder. Lord, I need you to make my husband stop fooling around. Etc. etc. etc.”)

And then my cynicism surfaces and I think, maybe it’s because we’re so used to being at the bottom of the barrel, that we think there is no way but to reach up and out. Consider rich countries like Germany, whose own “hope” survey results were also published by the SWS on its web site. Compared to most Filipinos, Germans seem to be extremely fearful of their future. Every year from 2001 to 2007, their survey showed 50 percent or less of German citizens entering a new year with hope. (There were no results yet for 2008 entering 2009.) In contrast, Filipinos were very much above 80 percent on the “hope” meter every same year.

If you’re used to being on top, being rich, and powerful, and then you lose all your money because of a mistaken investment, how hopeful would you feel about the New Year? Already, there have been reports of a couple of suicides from the sub-prime mortgage crisis in the U.S. and the Bernie Madoff ponzi scheme.

Perhaps it is all a matter of trying to readjust one’s attitude as well, and finding out one’s priorities. If it’s money that moves you, having it will give you a perpetual high and makes you want more. Losing it, will push you off the edge. But you and I know (though we do sometimes forget especially when confronted by the latest Prada bag in the shop window) that there are more important things in life than money – like family, moral values, and spirituality.

So whatever ill or mean thing which may have happened to us in 2008, or no matter how disgusted we are with how our country has plummeted to the dark abyss of nothingness, we’re still here, alive. We have our good health, a roof over our heads, and are still able to eat three square meals a day.

Personally, I felt extremely blessed that during Christmas, my entire family was together despite earlier events in the year pointing to what could have been a tragic disunity amongst us. And I prayed hard every day that all the hurts and pain amongst the family members would be healed. With that prayer answered, how can I not feel anything but even more hopeful of what the New Year would bring? How audacious is that?

Most of you readers also realize that like me, our families are still better off financially than 70 percent of our kababayan, so how dare we be depressed or sad or fearful for 2009? We should in fact give thanks that He has not forgotten us, and that even though we sometimes think we don’t deserve it, we continue to get the good stuff from Him.

Of course, in the same breath, we should maybe pray some more for those less fortunate than us – like those who were not able to be with their families last Christmas, for our kababayan abroad who have lost their jobs because of this global economic crisis, and especially for those who are in poor health, that their situation will turn around in the New Year.

I don’t mean to sound preachy, but really, we have so many things to be thankful for. List ‘em down. 2008 may have been awful year for a number of us, but hey, we’re still standing! Who was it who said: “What does not kill us makes us stronger”?

And I firmly believe that 2009 will turn out just splendid. For one, it’s a year before the next presidential elections, and we have the power to change our country’s direction. So that is something to look forward to. (Register to vote people!)

So in the same joyous spirit and ebullient words of a good buddy of mine, I wish you all a Happy New Year. Let’s rock and roll, baby!

(*With apologies to the U.S. president-elect. Photo from www.5pie.net. Btw, this piece would have been my column for today in BusinessMirror, but someone decided to close shop earlier than usual. That's the New Year for you. Something Like Life is usually published every Friday in the BusinessMirror, unless someone throws a fit. As you can very tell, "stop being bitchy" isn't part of my New Year's resolutions.)

No stopping Christmas

Something Like Life
Dec. 12, 2008

I finally sat down last Tuesday and started to wrap the gifts I would be giving to close family and friends this Christmas. As many of you probably know, I finished most of my Christmas shopping a long time ago, organized person that I am. But I never really found the initiative to actually wrap them until a couple of days ago. In the past, my gifts would be all wrapped as soon as December 1 kicked in. This year I just didn’t feel as excited as in previous years.

Maybe it’s because of all this talk of the global economic crisis. I can’t help but be fearful of what next year would bring. While the Bangko Sentral and the local banks continue to reassure us of the soundness of the banking system, small savers like me can’t help but still feel a bit unsure.

So I’ve postponed some necessary repair work for the house in favor of waiting it out next year. We just might need the extra cash next year. Being a small country, the Philippines, no matter how fundamentally sound our government economic managers would like us to believe it to be, will be affected by the turmoil in the bigger economies like the United States. If Americans stop buying our goods, a lot of people here may find themselves out of work. (The rest of my column in BusinessMirror. Photo from www.lumesoft.com)

Marc Faber on the global economic meltdown

DR. Marc Faber of Marc Faber Ltd,. has been a favorite guest on many business shows on cable TV because of his often shoot-from-the-hip comments and contrarian investment advice. He was in Manila last Thursday as keynote speaker of the 8th annual Asia Pacific Regional Investment Conference which I attended. His often tongue-in-cheek humor about the global crisis sent many conference tittering. It was of course, pure entertainment. Faber also publishes a regular newsletter called the Gloom, Boom, Doom report available on the web.

Here are a few choice quotes from Dr. Faber regarding the global sub-prime credit meltdown:

WHO TO BLAME: "The Federal Reserve's highly expansionary monetary policy in 2001 to 2007 led to strong money supply growth and storng credit growth.... 70% went to housing and real estate investment. Home prices rose steadily and went way above the trend."

THE DOMINO EFFECT: "Regardless of policies followed by the U.S. government and its agencies, the consumer is in recession and the recession will deepen. Trade and current account deficits will shrink further and diminish international liquidity. The shrinkage of global liquidity is bad for asset prices, including commodities. Also, deleveraging is occurring among financial intermediaries. This is extremely negative for an economy addicted to credit growth. We had an unprecedented global economic boom. A global bust is likely to happen."

ON THE $700-B BAILOUT PACKAGE: "If (Federal Reserve chair Ben) Bernanke wants, he will print money. You just throw money in system. Buy up the bond market and real estate mortgages. You create inflation....The bailout package won't address the real problem, which is too much debt. The debt bubble has already burst."

ON THE U.S. RECESSION: "A U.S recession is not bad. Americans will eat 5% less, obesity goes down."

THE IMPACT ON ASIA: "Where it hurts, will be the people who produce for the U.S. economy (Asia).... Decoupling will not likely to occur. There is a correlation in asset markets. If the S&P drops, most markets will go down. If S&P is up, markets are up. If the U.S. goes into a recession, China and India's growth will probably slow down to 3%. But coming from a fast growth to a slowdown, it will feel like a recession [in these countries]."

WHY ASIAN BANKS ARE BETTER: "Asian banks are in much better shape than U.S. banks. I suspect this is because most Asian bankers are just too stupid to understand structured products. Compared to U.S. banks, Asian banks are rock solid. Even Philippine banks, because they've invested domestically."

IMPACT ON THE PHILIPPINES: “Only a Filipino will believe that the Philippines will be immune from a global slump. Of course it will affect the Philippine economy as already reflected in the decline in share prices already. The Philippine market has been down 60% from its peak in '97. It's not terribly expensive. But before a new bull market emerges, a lot of base building will happen."

WHERE TO INVEST:

• Real Estate: In resource rich emerging countries
Avoid real estate in financial centres

• Healthcare: Pharmaceutical, hospital management companies

• Local Brands: May displace some international brands

• Commodities: Volatile, but uptrend intact. Corrections of 50% are common.
Caution about industrial commodities is warranted

• Tourism: Hotels, casinos, airports, beach resorts. Potential problem is oversupply.

• Financial Services: Banks, insurance companies, brokers in emerging economies

• Infrastructure: Bottlenecks everywhere. Potential problem could be cancellations

• Plantations and Farmland: Indonesia, Malaysia, Latin America, Ukraine

• Japan: Very depressed, banks look interesting

• New Regions: Cambodia, Laos, Myanmar, Mongolia

• Africa as a play on Asia

• Gold and Silver

(Click here for another story from the investment conference.)

Eco 101

AS predicted earlier, interest rates are on their way up.

With too much pressure on consumer prices to rise (it hit 9.6% in May), the Bangko Sentral ng Pilipinas (central bank) had to hike its key overnight rates by 25 basis points in its Monetary Board meeting yesterday.

According to the BSP Gov. Say Tetangco:

“The Monetary Board believes that there are already indications that supply-driven pressures are beginning to feed into demand.

“Core inflation as of May 2008 has reached its highest level since April 2006.

“Recent business- and consumer- confidence surveys also indicate an upward shift in inflation expectations, coinciding with increased term spreads on government securities and higher secondary-market rates.”

Wading through all that gobbledygook, what the Gov is particularly referring to is the rice supply-demand situation. Because rice seems to be in short supply, it has not been keeping up with the increased demand of the population. Rice, makes up about 50% of the so-called food basket that is measured for inflation rate. And since the food basket constitutes the bulk of the inflation rate, any price movement there will make inflation rise or fall as well.

Also, the massive budget deficit of the government means it doesn't have enough money to fund its operations. Thus, it has to borrow more from the banks via Treasury Bills, notes, bonds which are government securities. In one T-bill auction last month, the one-year T-bill was up at 6.915% from 5.993%, which means banks see a grim inflation outlook.


What this all means is that, yes, believe your wife when she tells you that the prices in the grocery and supermarket are rising. Give her a bigger budget. But tell her to cut down on the non-essentials like the kids' junk food, the sodas, and dining out. (To my restaurateur friends, I apologize for this bit of advice, but the economy is really in for the long haul, and unless you provide value-for-money dishes, you will go through this rough patch as well.)

Postpone purchases made on your credit card or personal loan. Because if interest rates are up, bank lending rates will rise as well.

But all is not lost! You can use this period of instability to your advantage.

Because interest rates are rising, it will be worthwhile to invest again in government securities. Set aside those monies meant for the junk food, colas, beer, and tobacco into an investment fund. Talk to your banker and see what high-yielding government securities and deposit accounts he can offer you. It's time to get back to those time deposits, 5-year tax-free deposit accounts, and commercial debt papers (just check on the company's credentials first).

As a matter of personal choice, I stay away from the mutual funds and UITFs, because I don't want to check on these investments everyday. And mind you, if you have such funds, you have to monitor them closely.

SAVE! I'm sure this will not sit well with businesses because what they need right now is for people to spend to keep the economy going. Well, I'm not against spending, and I'm actually one of those people who can't help but eat out and try a new restaurant. But I think this is a good time to learn the value of saving or prudent spending. It's okay to spend, but as they say, do it wisely.

That bee is gonna sting

Sign of the times: Jollibee hiking
prices on soaring costs

By Dennis Estopace
Reporter, BusinessMirror
May 14, 2008

NOW you know times are really hard. The iconic fast food that offers “distinctly Filipino” spaghetti and fried chicken has been bitten by the inflation bug.

Jollibee Foods Corp., the country’s largest fastfood operator, would be hiking prices “any time soon,” chief executive Tony Tan Caktiong told the BusinessMirror.

However, Tan Caktiong said he doesn’t expect such increase to impact sales. (Read on at Jollibee.)

OH crap, now we're in real trouble! Various economists from different banks are already projecting a 9% inflation rate this year. With this announcement from Jollibee, that makes the inflation projection even more credible. After all, about 50 percent the consumer price index (which is the basis of the inflation rate) is composed of food, beverages and tobacco items.

Jollibee's products have become an index of sorts for the country in terms of food prices. Its burgers, spaghetti, and fries are standard fare especially for the lower middle income market. (I personally like the nacho fries.) These are the clerks, the sales ladies, tellers, patrolling cops, and janitors, etc. who comprise the bulk the of country's working force.

These folks don't even earn enough to pay for all their needs, an uptick in food prices will just burden them further. (What's more, transport groups are agitating for higher fares.) With Jollibee raising its prices, I am pretty sure other food staples like canned sardines and instant noodles will soon follow. It's bad enough we have a rice crisis and surging electric bills.

I can't imagine how we Pinoys can take more of this.

* * * *

ON the other hand, a higher inflation rate spells good news to depositors as this usually means, the Bangko Sentral ng Pilipinas (central bank) will need to increase its overnight rates to sop up the extra liquidity in the market.

This also means the rate on government securities like Treasury Bills and Bonds will go up. Depositors will be sure to check with their banker the latest rates for special deposit accounts and investment instruments.

Already I got a call from my bank which is offering 8.5% interest per annum on its Tier 2 notes. (Earlier this year, the notes were only offered at 7%.) Of course, the catch is, you have to hold on to this basically unsecured debt for 5 years and the interest is paid out every six months. But it's a good deal especially if it's a strong solid bank. Also try to look ask your bank if it offers 5-year tax-free accounts. These special accounts normally accept deposits as low as P50,000. Interest is paid every month but like the Tier 2 notes, you must keep your money in the account for five years.

And btw, just in case you've bought into the whole economic miracle that is RP crap promoted by the presidentita, a high inflation rate is one of the signs the economy is heading for the dumps.