Deficit Devalues Peso, Cuts Investment and Innovation 125.0
One of the main barriers to long-term foreign direct investment (FDI) in the Philippines is currency risk. With low FDI, the Philippines is deprived of a major source of intensive learning and innovation. Currency risk arises from the change in price of one currency against another. Every Filipino and his uncle seem to agree that [...]
Support our Innovative Entrepreneurs 123.0
Filipino companies and entrepreneurs hardly do any basic science-based research. All the while, I have thought this to be only because of the high cost and uncertainty of doing such research. I have come to realize that they know it is less risky (and more rewarding) to take opportunities from inefficiencies in the local economy [...]
Ayala Grabs Leadership in Mobile Banking for Microfinance 122.0
Ayala Corporation has obtained Bangko Sentral ng Pilipinas approval to convert Filipinas Bank into an innovative IT-oriented microfinance bank. The Philippine Star reported this in today’s (10.13.09) issue, BPI forms microfinance, IT-oriented bank. Global Innovation Leadership for Ayala. I predicted this to happen in my August 31 post, World Class Innovation: Microfinance as an Ayala [...]
Managing for Medium-Term Peso Appreciation 120.0
The usual first response of Filipino exporters and contact and BPO center businesses to a strong peso appreciation is to ask the government, through their industry associations, for a foreign exchange bailout. With the government considered a soft touch and not proactive, this has created a culture of dependency over the years. It made companies [...]
Filipino Taxpayers, Be Ready for a Possible Reserves Grab at the BSP 119.0
Since we cautioned about the depreciating US$ just three weeks ago in our September 18 post, the Philippine peso has strengthened by 3.0% to PhP46.656 (closing rate, 10.8.09). As in October, 2007, this is a danger signal as some sectors like exporters, BPOs and OFWs will start to clamor for support from the rapid rise [...]
New Dangers Lurk as the US Dollar Depreciates 111.0
Three days ago, I heard a guest at Bloomberg call out that the US has become “a source of funds for the carry trade.” Since then, the drop in the value of the US$ and the improbable rise of the peso to PhP 47.70 to US$1 (closing today, 9/18/09) tend to support that claim. If [...]
Protection of Property Rights Guarantees Innovator Returns 97.0
On intellectual and other property rights, I have copied a relevant post from another Forum that I joined, VoiceOver 2015. A similar scheme for HIV/AIDS drugs for the developing world has been applied elsewhere (See Post #75) after a real threat from US$1 per dose substitute from India, a countervailing force needed for robust democratic [...]
Alternative Sources of Financing for Innovators 91.0
On the question, “If the financial returns are so good, why is everybody not doing the opportunities that I have identified in recent posts?” I generally hear one answer on the ground: lack of financing. There are funds looking for equity investments. There just seems to be some intermediation needed for the two parties – [...]
Crisis as Opportunity for Tycoons to be Teachers 3 of 3
For the Philippines, I see three types of naturally-hedged investment opportunities. While not totally freed from systemic or global problems like the current crisis, they still provide lower risks than the usual businesses. The first type that I remember from when I was working in project finance twenty years ago are hotels and tourist-oriented projects. [...]
Crisis as Opportunity Gives More Power to the Strong 2 of 3
(Start of Part 2 of 3. From Post #64) Today, the European Chamber echoed my post on Monday, June 2 (See Post #64). The financial crisis presents opportunities from changing conditions that level the playing field to investors. Indeed, the government ought to take advantage of the crisis to initiate needed reforms to better position [...]
Crisis as Opportunity to Create an Army of Innovators 1 of 3
The goal of any government is growing wealth for its citizens and strength for the country. For the Philippines, this goal translates to a sustained 7% GDP growth per annum (that I derived in Posts #13 – #14). No administration has ever attained this goal in a sustained manner. The best way to do this [...]
Support the Bangko Sentral for a Stable Peso 3 of 3
Let us support the Bangko Sentral ng Pilipinas as a central bank that provides the price anchor, the present-day gold standard, for our economy. Through real independence from political overlords, the price anchor provides long-term benefits: A stable price of money discourages speculation. Success in investing will now require merit in product differentiation and business [...]
