SBEP Magazine 2013

STRATEGIC BUSINESS ECONOMICS PROGRAM

SBEP NOVEMBER 2013

On to.. .

AAA

The Philippines gets an Investment Grade Rating AAA

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On to..

Contents

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Will the Philippine Economy Continue to Ride the Crest?

A sensible debt management strategy

SBEP Class 2013

Now on its 39th year, the

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Strategic Business Economics Program is accepting limited applications to its Executive Education offering: Executive MBE (Master in Business Economics) and

2013 Golf Tournament and Homecoming Dinner

Executive CBE (Certificate in Business Economics)

Characters of Class 2013

• A convergence of Economic Principles, Business Techniques, and Strategic Management • Designed for CEOs, CEO Designates, and Owners; Heads of Public Agencies and Institutions, and Senior Policymakers • A modular schedule suited for top executives • With research support from the School of Economics and the CRC Foundation Be part of a great tradition and a network of executives in an atmosphere of academic excellence and real business applications.

Strategic Business Economics Program, 6/F, School of Economics, APEC Communications Building, University of Asia and the Pacific, Pearl Drive, Ortigas Center, Pasig City / Email: sbep@uap.asia / Tels. 634-2820 / 634-3095 / 634-2821

editorial

Victor A. Abola, Ph.D.

WHAT A YEAR 2013 WAS! Foreign Debt Buyback

T

he history books will likely mark out 2013 as a year of many firsts. Both good and bad. On balance, it would seem to favor the positive side by a large margin.

The good news is that the Philippine economy has broken loose from the Intensive Care Unit and is now the second fast running economy in East Asia—next only to China—for the 2nd consecutive year. As the year ended, the PH economy chalked up 8 consecutive quarters of 6+% Gross Domestic Product (GDP) growth, with full-year 2013 hitting 7.2% despite suffering a once-in-a-century super typhoon (Haiyan) in November.

The indicators are pointing to an economy in pink of health—from low inflation, to high foreign exchange reserves, to low fiscal deficits, among others—and ready for the express lane. The major credit rating agencies have taken careful note of the metamorphosis that they (Fitch in March, S&P in May, and Moody’s in October 2013) have raised PH dollardenominated bonds to investment grade, with a positive rating to boot, the first time the country has achieved this since it started borrowing in international markets and sovereign issues were credit rated.

The bad news were the terrible devastation caused by super typhoon Yolanda and the looming political fallout emanating from the “pork barrel” (PDAF) expose. We may include also delayed PPP projects in 2013.

What an Investment Grade Credit Rating Means Although heavy criticism of rating agencies emerged in the aftermath of the World

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Financial and Economic Crisis (a.k.a. The Great Recession) of 2008-09, they have become an indispensable link between lenders risk appetite and sovereign borrowers’ capacity to pay. This they do by providing a credit rating which provides a rough indication of the borrowers’ likelihood of defaulting in its bond issuances.

And since in Finance, reward is positively related to risk, it means that the higher the risk, (of default) the higher would be the premium that will be demanded by the lender.

Our economist Viory Yvonne Janeo and I looked into the experiences of other countries after they received an investment grade rating, based on studies by the International Monetary Fund economists and the work of Carmen Reinhart and Kenneth Rogoff (who came out in 2010 with their book on financial crises through the centuries entitled “This Time is Different”). These underlying studies point to three major benefits of investment grade credit rating, i.e., (a) lower sovereign borrowing costs —in the international markets, of course, as it would mean higher credit standing, (b) lower corporate borrowing cost—this follows from the first, since sovereign issues become the benchmark for corporate bond issuances in the international markets, and (c) higher investment inflows—as the rating is equivalent to a clean bill of health by an independent and reliable agency (of experts), which gives confidence to foreign investors to invest in the country.

This may take a little while, but it is likely to come soon. The composition of the foreign investment will depend on the structure and prospects of the economy rated. And right now, the Philippine economy appears to be entering into a rapid growth period.

The investment grade rating of PH sovereign bonds (ROPs) may not have much bearing on new government borrowing. As an article of mine would show, the wide gap between coupon rates on long-dated ROPs (e.g., 7-year and 10-year) and domestic rates makes it more attractive for the government to borrow locally. This is what the NG has been doing more in the recent years especially in 2013, when foreign financing of NG borrowings was less than 10% of the total.

Even more, the article goes to show that it would be advantageous for the government to buy back foreign debt and refinance them through the local financial markets. This is not only because of the interest rates differential, but also because of the high savings rate which now exceeds 39% of GDP.

This conclusion is supported by analyzing the proposition using two approaches: (a) the net consolidated foreign assets of the government, including BSP, and (b) a discounted cash flow comparison between keeping the foreign debt up to maturity and to buy it back at market rates (in open market) and refinancing it by domestic debt. The process of debt transformation would also have the beneficial effect of preventing peso appreciation which has been a main cause of “jobless growth” that has plagued the country.

This is because a higher exchange rate not only puts domestic producers (both for local and export markets) at an advantage, but also provides more purchasing power and savings for Overseas Filipino Workers’ (OFW) families in PH. It also helps maintain the quality edge of our Business Process Outsourcing (BPO) firms against competitors like India.

Is Above-7% Growth Sustainable?

The real and visual tragedy inflicted by super typhoon Yolanda (or Haiyan internationally) in November has raised questions on the sustainability of the growth momentum, given the extent of damage and the key power plants (some 600 MW of geothrermal-based capacity) and manufacturing facilities (e.g., lone copper smelter, large fertilizer plant) that were downed by the typhoon.

While the human misery is undeniable and indeed incalculable, the relief and reconstruction work that will be done to put these affected areas back into a viable state and improved urban planning would mean an additional (continued on page 6)

THE philippines GETS AN investment grade RATING

SBEP TEAM

(L-R) Lea T. Riñon, Marketing & Alumni Relations Coordinator; Rowena A. Araña; Program Coordinator; Alonica R. Salazar, Marketing & Alumni Relations Manager; Victor A. Abola, Ph.D., Program Director; Joy Kathleen J. Tero, Program Assistant; and Ledinia G. Coates, Executive Assistant.

The SBEP Coordinating Committee, whose members include Dr. Rolando T. Dy, Director of CFA, Dr. Vaughn F. Montes, Ph.D., Fellow of ICD, and Dr. Victor A. Abola, SBEP Program Director, ensures faculty staffing from the University.

Editor-in-Chief Editorial Assistant Contributors

Victor A. Abola

Printing

VG Printing

Alonica R. Salazar Viory Yvonne T. Janeo Carmina E. Cruz

APPLIED BUSINESS ECONOMICS PROGRAM

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For inquiries, please contact Mr. Jonathan Ray Alforte at 637-0912 loc 348 or email jonathan.alforte@uap.asia

special feature

Will the Philippine Economy Continue to Ride the Crest?

Victor A. Abola, Ph.D.

Associate Professor UA&P School of Economics and

Viory Yvonne T. Janeo

Research Associate UA&P School of Economics

The Philippines is now considered as Southeast Asia’s new growth pole as it experienced steady and unprecedented growth of above 6.0% over the past eight quarters. During this period, the country experienced a wave of credit upgrades to investment grade (first time in the Philippine history) from the three major credit rating agencies (i.e., Fitch, Standard and Poor’s, and Moody’s), validating the administration’s claims of robust economic growth, improved fiscal management, and good political governance.

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THE philippines GETS AN investment grade RATING

special feature Table 1. Reconstruction Cost Item Shelter Reconstruction and Resettlement Public Infrastructure Education and Health Services Agriculture Industry and Services Local Government Social Protection Total Total in US $ = 8.0

Notwithstanding these achievements, recent calamities appeared to have dampened growth expectations for the country this 2014.

Given the magnitude of devastation, especially from super typhoon Yolanda, many have reason to ask: will the Philippine Economy still ride the crest?

While fears about the country’s prospect from the devastation are not unfounded, the Philippines is still expected to grow by 7.3% in 2014, in keeping with the original government target of 6.5-7.5%. This is taking into account post-crisis reconstruction from the rubble of Yolanda, intact domestic demand, and the boost from external sectors.

Post-crisis Reconstruction Based on the UN methodology, the National Government (NG) estimated the total cost of reconstruction at around P360.8 B over a period of three years (see Table 1 and 2). A big chunk of the budget is to be spent on shelter reconstruction and resettlement in order to meet two of the most pressing concerns in the aftermath of Yolanda.

The said amount is expected to be financed by aid, foreign loans, and domestic loans. This increased spending, coupled with the supply chain constraints inflicted by the super typhoon Yolanda, will put pressure on inflation, which is estimated to be at 4% for 2014 – higher than the 3.0% in 2013 but still within the government target of 3-5% for the year. The projected inflationary increase, however, will be tempered by lower crude oil dollar prices as forecasted by the US Energy Information Administration. For 2014, the crude oil prices of the two global benchmark, West Texas Intermediate (WTI) and Brent, are estimated to drop by 2.7% (95.00 USD/bbl) and 4.0% (104.08 USD/bbl); respectively.

PhP Billion 183.3 28.4 37.4 18.7 70.6 0.4 18.4 360.8

Share to Total Cost 50.8% 7.8% 10.4% 5.2% 19.6% 0.1% 5.1% 100%

Moreover, any negative impact from inflation will be offset by its positive impact on fiscal stimulus. The price tag from the boost in government spending will drive economic growth, thus further buoying an already booming economy.

Intact Domestic Demand From both the spending and production view, domestic demand is expected to continue to be resilient with an anticipated 8.0% growth, thereby positively contributing to the Philippines’ largely domestic driven economic growth. In particular, consumption spending, government spending, and investment spending in 2014 are expected to grow by 6.2%, 8.0%, and 16.0%; respectively.

From the expenditure standpoint, all sectors are humming with the assumption of a steady upward trend in both private and public consumption as well as domestic investment. Private consumption will most likely be positively influenced by the depreciation of the peso and gains in exports.

Peso depreciation will magnify OFW remittances, further stimulating consumption and sustaining the residential construction momentum. Additionally, it must be noted that the continuing current account surplus fuelled by rising Overseas Filipino Workers (OFW) remittances resulted to a rapid rise in Table 2. Reconstruction Fund Sources Total NG Spending Timing Aid PhP Billion 2013 34.0 10.0 2014 100.0 22.5 2015 127.1 22.5 2016 100.0 5.0 Total 60.0

While fears about the country’s prospect from the devastation are not unfounded, the Philippines is still expected to grow by 7.3% in 2014, in keeping with the original government target of 6.5-7.5%.

FX Loans Peso Loans 45.0 45.0 22.5 112.5

% of GDP

32.0 59.3 72.5 163.8

sbep magazine 2013

0.2 0.3 0.4

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special feature the country’s Gross International Reserve (GIR) over the past seven years, and is estimated to reach at least $90.0 B by 2014.

Meanwhile, government spending will be spurred by widespread reconstruction efforts while investment spending will be incited by public construction and private investment in durable equipment (i.e., power, water, property, airlines, manufacturing). The latter type of investments will likely offset a slowdown in private construction, which is validated by a single digit 6.8% (in terms of floor area) growth year-on-year in residential construction. Residential building floor area totalled to 3.49 M sq. meters in Q3-2013. In addition, there are signs that major Private-Public Partnership (PPP) Projects (e.g. Cebu International Airport expansion, CaviteLaguna Expressway (CALA), LRT-3 Extension, etc.) will finally take-off.

Looking at the Production View, the claim above is supported by the expected positive growth record of the three different sectors (i.e., the industrial, service, and agriculture sectors). The Industrial sector, which experienced sterling growth in 2013, spurred by improvements in manufacturing, construction, and EGW, is again expected to lead production gains in 2014. This was due to the revival in the manufacturing sub-sector being partly boosted by the improved external environment, and a robust construction sub-sector.

On the other hand, steady growth is projected for the Service sector. This

Summary of 2014 Macroeconomic Forecast Inflation Rate (average percent change) Peso-Dollar Rate (end) Gross International Reserves ($B) GDP Growth Rate Industry Sector Services Sector

2014 4.0 43-46 90.0 7.3 9.7 7.0

is to be mainly driven by the Business Process Outsourcing (BPO) sub-sector (15% growth) and the Tourism subsector (12%). Tourist arrival for JanuarySeptember 2013 alone hit 3.5 M, posing an 11.4% increase for the same period the previous year. Moving forward, sustained growth is expected for the sub-sector.

Meanwhile, the previously slumping Agriculture sector will start to experience a recovery, albeit at a sub-par rate mainly because of the coconut industry’s woes as a result of super typhoon Yolanda’s devastation of Eastern Samar and Leyte’s coconut farms.

compared to the previous month. New job creation in November totaled 205,000, surpassing the 185,000 2013 average monthly gains. Housing prices were also observed to be on the rise. Concurrently, housing starts exceeded 1.0 MM units, serving as an indication of a recovering economy.

Bearing in mind that the country’s fundamentals are being supported by the improvements in the world economy, rosy prospects for the advanced economies will most likely revive the country’s lagging merchandise exports and increase capital flows.

Boost from External Sector A better outlook for the advanced countries is emerging as the International Monetary Fund (IMF) has predicted faster growth rates for the US (+1.0% from 2013 figure) and the Eurozone (+1.6% from 2013 figure); bringing the growth of advanced economies to 2.0% in 2014, a 0.8% increase from last year.

For the United States in particular, November 2013 data on new job creation and housing prices show improvements

Outlook Looks Bright Even After the Super-typhoon In answer to the question posed earlier, the Philippine economy’s unprecedented growth momentum will continue to be sustained by the strong domestic and improved external environment, coupled with heightened construction spending.

Despite the havoc inflicted by super typhoon Yolanda, the economy remains strong and growth should accelerate back to a rapid pace in 2014.

(Editorial... continued from page 2)

P360B expenditure until 2016. This could add some 1% to GDP (including the multiplier effects). Besides, the recent impetus of domestic demand on growth has remained intact, led by manufacturing and construction.

In addition, the advanced economies are in a mend and exports are expected to spring back to life. It had been mostly negative in 2012 and 2013, but should turn positive, albeit modest, starting 2014. Recent economic data from the U.S., the Eurozone and Japan do promise a further lift for the PH economy’s exports. In the meantime, the Business Process Outsourcing industry (BPO) and the Tourism industry are expected to continue their double-dight growth and provide the additional boost to the economy.

What could assure an above-7% GDP growth performance for the coming years would be if the Public-Private-Partnership (PPP) projects

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THE philippines GETS AN investment grade RATING

finally take off this year with a number of large projects expected to be awarded and started in 2014.

Not mentioned in the article is the recent government release that the fiscal situation continued to improve. National Government (NG) outstanding debt increased by only 4.5% while nominal GDP shot up by 9.3%, thus, resulting in a lower debt-to-GDP ratio at 49.2% by end-2013, the first time in more than 30 years that this ratio has fallen below 50%.

The target is to bring this down to 40% by 2016. In the process, this would rechannel more funds from interest payments to infrastructure spending, adding thereby another leg for the sustainability of the rapid growth.

Unless the present administration shoots itself in the foot, the odds are that the Philippine growth story is here to stay at least for the next 3-5 years.

MBE Graduates June 2013 Last June 1, 2013, two distinguished SBEP alumni were awarded a Master in Business Economics (MBE) during the eighteenth UA&P graduation ceremony held at the PICC Plenary Hall. The recipients of the MBE completed all course requirements of the certificate program and successfully defended their thesis.

Alexander S. Lopez Commodore, Philippine Navy Armed Forces of the Philippines "The Future of Philippines Offshore Gas & Oil Exploration: A Case Study on the Security Vulnerability Assessment (SVA) Approach of the Malampaya Deep Water Gas to Power Project (MGPP)"

Reynaldo A. Carpio, Ph.D. President & CEO Grand Monaco Estate Developers, Inc. "Developers for Development: Growth Strategies (2013-2022) for Grand Monaco Estate Developers, Inc. (GMEDI)"

special feature CONVERTING FOREIGN DEBT TO PESO DEBT

A sensible debt management strategy

by Victor A. Abola, Ph.D. Associate Professor School of Economics, UA&P

A high level of external debt could get in the way of a credit rating upgrade for the Philippines. To address this issue, we should consider a debt management program similar to the buybacks conducted by Latin American countries that have achieved an economic turnaround as well as investment grade status.

The interest payments of the National Government (ng) in August 2013 showed an 8.8% decline, according to the Bureau of Treasury. On a year-to-date basis, these payments had risen by only 3.5% compared to overall expenditure growth of 12.6%. These figures reflect good debt management on the ng’s part. But can the government do more to reduce the country’s external debt which, at 40% of total public debt, is significantly higher than that of our peers, as noted by Standard & Poor’s (s&p)? This high level of external debt could be an obstacle to a further credit upgrade by s&p in May of this year.

This paper examines the benefits of domestic debt financing relative to foreign financing. Specifically, it looks at potential benefits of an aggressive dollar-debt buyback program, and the conditions under which it should be implemented.

Trends in the borrowing mix This year, the borrowing mix of the ng has shifted drastically to domestic sources.

For the January to August period, gross foreign financing accounted for only 6% of total borrowing, and the rest came from domestic sources. This is even better than the original 10% to 90% plan of the Department of Finance (dof) for foreign and domestic financing of its new debt.

And yet, except for May to September 2013 during which the adverse effect of the Federal Reserve’s announcement of its broad plan to “taper” its long term government bond purchases ran through the bond markets, domestic interest rates have fallen compared to a year ago.

This low share of foreign financing has not always been the ng stance in the past. For 2000 to 2011, the average foreign financing of public debt was 35.5% and was at its highest at 45.9% in 2002 (see Figure 1). Only in 2008 it fell to an extremely low 14.4% level of foreign sourcing observed because of the financial crisis that erupted in the United States and spread to the rest of the world

late that year, which increased the cost of borrowing from abroad. However, since 2012, there has been a clear decision to minimize foreign borrowings in the face of a large and widening gap between savings and investments (see Figure 2). Thus, last year the percentage of foreign borrowing to total ng borrowing fell to 16.4% and dropped further in 2013.

At the beginning of the millennium, foreign borrowing was preferred because domestic interest rates were much higher than foreign rates. However, this scenario has significantly changed, as these borrowings, coupled with increased remittances from overseas Filipino workers (ofws), led to an appreciation bias for the peso starting 2006. At that time (and perhaps until the present), the dof did not mind the currency appreciation as it meant lower peso cost in debt servicing and in valuing foreign debt. But does it provide a full picture of the benefits and losses for the ng and the entire Philippine economy?

Latin America and debt buybacks When Latin America is mentioned with regard to foreign debt, we would commonly think that the region is heavily indebted. After all, Brazil, Mexico, Peru, and Argentina, had mountains of debt in the 1990s and experienced the “Tequila Crisis” of 1993-94. Argentina defaulted sbep magazine 2013

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special feature and Mexico has a bbb+ rating.

We can see that a debt buyback strategy is highly effective when one’s bonds are selling at a discount. But what about the Philippines, whose dollar denominated bonds are commanding a premium? Is a debt buyback still worth pursuing?

Evaluating the benefits and costs What should be our approach in analyzing whether or not the Philippines should take a similar strategy to manage its debt and avoid competition-wrecking peso appreciations?

We will use two bases for analysis: (1) a balance sheet approach and (2) a discounted cash flow approach.

Oftentimes, the government uses the balance sheet approach in which a peso appreciation lowers the local currency equivalent compared to the original exchange rate when the debt was contracted. Thus, most government officials think that peso appreciation is good. We have already shown empirically that an undervalued currency fosters faster economic growth. But should government officials and the Bangko Sentral ng Pilipinas (bsp) continue to think this way?

in 2002. However, the region has had a major turnaround as evidenced by its average debt-to-gdp ratio at only 32.4% in 2012 or much lower than the Philippines’ 51.5%. How did they achieve this? By pursuing an aggressive foreign debt buyback program for a number of years.

In early January 2007, Brazil’s Treasury said that it might permanently extend buybacks of its foreign bonds as the government works to improve its debt profile and gain higher credit ratings.

The Treasury announced that it might buy back bonds of any maturity at any point along its yield curve. According to Paulo Valle, adjunct treasury secretary, the Brazilian government would try to fund most buybacks with dollars the treasury purchases in the spot foreign exchange market instead of greenbacks purchased by the central bank under its

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program to boost foreign reserves. “In principle, we would buy (the dollar) in the open market,” Mr. Valle reportedly said. Repurchases could go on for years, although Brazil did not have any plans to get rid of all foreign paper. “They will continue without a defined timeframe,” he said. “The idea is to have more active (debt) management” (Bloomberg, January 15, 2007). Buying these from the spot foreign exchange market prevented severe appreciation of Latin American currencies, as these countries were enjoying a commodity price boom.

The debt buyback spree went on and so by 2008, Brazil and Peru achieved their goal of obtaining investment grade status.

Peru, it must be recalled, had reneged on its foreign debt in the late 1980s. At present, both countries have a bbb rating, a notch higher than the Philippines’ rating,

THE philippines GETS AN investment grade RATING

The balance sheet approach In this method, what is important is the consolidated public sector balance sheet with regard to foreign assets and liabilities.

The reason for using this consolidated view is to consider the entire public sector and not only the ng.

If we consider the ng and government-owned and controlled corporations, excluding government banks and the bsp, we will see that their total external debt as of March 2013 (latest data published in bsp’s spei) was around $47 billion. They have minimal foreign assets because the bsp holds them by and large. Therefore, that amount puts them in a net debt position. If the ng would look only at its own balance sheet, every peso appreciation would lower the debt (in pesos) by P47B, and is therefore beneficial. Note, however, that this is a paper gain that is realizable only upon maturity (if the exchange rate by then would still be lower than when the fx debt was contracted). This approach ignores the foreign assets (gross international reserves) and liabilities of the bsp.

recent recenteconomic economicindicators indicators

OCTOBER 2013 MARCH 2012

special feature 4

A sensible debt management strategy • Victor A. Abola

In In March March 2013, 2013, the the bsp bsp had hadgir gir NPV of FX debt held to maturity versus NPV of FX debt conversion amounting to $83.9B (although it was to peso debt amounting to $83.9B (although down to $83.0B as of September, the exact figures do notto matter significantly). it was down $83.0B as of Replacement NPV when FX At that time, the bsp had external debt peso debt FX debt info September, the exact figures do not (the NPV when debt is bought Current (PM) at current Coupon number worth $1.4B. Subtracting this amount (a) - (b) back and FX debt is market price market price & rate refers to year matter At that from its significantly). gir, the bsp therefore has atime, net retained (a) converted to of FX debt exchange rate of maturity) peso debt (b) asset of external $82.5B. Thus, every the position bsp had debtfor worth for $1M peso appreciation, it would have to book a $1.4B. Subtracting this amount loss of P82.5B. The flipside would be true.

ROP-19 9.875 125.085 54.762 54.799 54.762 0.037 frombspitswould gir,gain thethat bspmuch therefore has The for every ROP-24 7.500 125.890 53.502 59.247 53.502 5.735 peso depreciation. a net asset position of $82.5B. ROP-24 9.500 140.930 61.310 67.087 61.310 5.776

The logical thing to do is to consolidate Thus, for every peso appreciation, the ng and the bsp for a total view. This the conversion will be neutral with We assume a constant it would have to book a loss of P82.5B. Therates. flipside time, the consolidated assets remain at coupon to finance the buyback.

Withtothis approach, (b)the is respect creating liquidityif in exchange rate of P43.50.

We also use a $83.9B while the consolidated external would be true. The bsp would gain that much for financial system.

3.5% per annum discount rate because public debt amounts to $48.4B. This less than (a), then debt buyback (and transformation every give peso depreciation. of 10-year peso- • The larger the differential between would a consolidated public sector net this is roughly the yield into domestic debt) fxis-debt a better alternative than coupon rates and domestic denominated government securities (gs) assetThe position of $35.5B, and to not ado net is debt logical thing to consolidate the keeping the foreign debt. bond yields, the more beneficial is a position.

According to this global view, the in the secondary market. We summarize ng and the bsp for a total view. This time, the based on debtuse buyback conversion to peso entire government (including bsp) would our results in the table above In this exercise, we onlyand three rop bonds consolidated assetspeso remain at $83.9B while the the assumption of a $1 million debt and debt. lose P35.5B for every appreciation, with different maturities and coupon rates. We and would gain external similarly from a pesodebtbuyback. consolidated public amounts to a constant of P43.50.

We also The last column assume in the table shows exchange If the fx rate debt buyback and conversion depreciation. This perspective contradicts $48.4B. This would give a consolidated that the npvpublic of keepinguse the foreign debt is annum to peso discount debt strategy pursued, this the the usual partial view. a 3.5% per rateisbecause $39.5B, a for a fx debt buyback implementation should be done by the higherand than not the npv sector Fromnetthisasset globalposition view, a of foreign roughly the yield of 10-year peso-denominated and global conversion to pesois debt.

Concretely, ng through the market (for both foreign debt buyback would cause some peso net debt position.

According to this view, of outstanding, exchange and actual buying government securities (gs)requirements in the secondary market. depreciation and result in further gains for rop-24, for every $1M the the entire government bsp would lose the)government benefits by P5.77M if it back of fx debt). A debt exchange is for government and the(including bsp. The We summarize our results in the table above based replaced the equivalent peso debt. not advisable because the gains would $39.5Bdebt forcan every peso appreciation, and wouldbygain foreign be replaced by domestic is onofthe assumption of to a $1 million debt andthan buyback.

Extrapolating to a total $10B foreign go fund managers rather to the debt, whichfrom the economy can afford to This similarly a peso depreciation. perspective combined government accounts (or the the provide without altering the low interest debt means that the public Thesector last will column in the table shows that contradicts thesince usual partial view. benefit by a whopping P57.7B following country). rate environment there is substantial npv of keeping the foreign debt is higher than debtbuyback buyback and conversion to peso liquidity the Special Fromfrozen this in global view, Deposit a foreigna fx debt npv for the a fxAdditional debt buyback and conversion program. This the advantages Accounts of the bsp , and peso the ngdepreciation ’s purchase debt would cause some and result in idea supportsa debt Apart from the benefits the of dollars would infuse pesos into the general proposition thattoconducting peso debt. Concretely, forfinancial rop-24, for for every further system. gains for the government and the bsp . The(and conversion to peso public sector (and the economy) as a buyback program financial $1M of outstanding, government by is clearlydebt, more advantageous even for whole,the reduction of foreignbenefits debt through foreign debt can be replaced by debt) domestic equivalent peso the ng alone. However,P5.77M the benefitifis it notis replaced an aggressivebyfx the buyback program would The discounted cash flow which the economy can afford to provide always thewithout same. It would depend on the mean less foreign exchange risk (zero to approach debt. Extrapolating to a total of $10B foreign altering the low interestdiscounted rate environment since current market price of the fx bond to be the extent of the buyback). Less external We examine alternative debt that the sector ofwill by debt public as a percentage its coupon rate,means remaining gdpbenefit would also cash or net present values (npv ) bought thereflows is substantial liquidity frozen in theback, Special current yield of translate into less aeconomic a whopping P57.7B following fx debtvulnerability buyback comparing (a) foreign debt (converted time to maturity, and the Deposit Accountsthat of are the allowed bsp, and the ’s purchase equivalent maturityand local conversion debt. to external shocks, as pointed out s&p. to pesos) payments to theng to peso debt program. Thisby idea the From this exercise (and a Finally, by converting foreignof dollars financial continue untilwould maturityinfuse versus (b)pesos foreigninto supports the general proposition thatpeso conducting can be provided), denominated debt into debt, the debt converted to peso debt at current mathematical proof that system. domestic bond would be market values of debt papers, since this we could say that: a debt buyback program (andmarket conversion tofurther peso maturities are enlarged. Such a development would assumes that the debt is bought in the • fx bonds with longer debt) is clearly more advantageous even for the more advantageous to convert to peso make the secondary markets more liquid market.

When the cash discounting rate is The discounted flow approach ng alone. benefit isthenot always the debt because the discount rate However, (local and the consequently, spread between equal to the yield-to-maturity the new We examine alternative ofdiscounted cash flows or a stronger yield) would havesame. impact bids and offers would tend to narrow.

In peso bonds, its npv is the same as the new It would depend on the current market price ) comparing debtcash flows further into other words, it would make the domestic net present (npvthe on negative peso debt usedvalues to finance buyback. (a) foreign bebond bought back, couponthereby rate, future. to of the fx bond to gs market moreitsefficient, With this approach, if (b) ispayments less than (a), (converted to pesos) that arethe allowed remaining time tocontributing maturity, and the current yield of between to greater maturity of the then debt buyback (and transformation • The smaller the differential continue until maturity versus (b) foreign debtof rops and local current yields debt, country’s capital markets. into domestic debt) is a better alternative the equivalent maturity local debt. converted to foreign peso debt. debt at current market values the better it is to convert to peso Considering the clear benefits than keeping the although extent depends mentioned, that the ng and the of debt In this exercise,since we use three that debt, this exercise (andwea hope mathematical proof papers, thisonly assumes the debt is the From on the premium of the rops. Besides, bsp can pursue this scheme immediately. rop bonds with different maturities and

bought in the market. When the discounting rate that can be provided), we could say that: • fx bonds with longer are more is equal to the yield-to-maturity of the new peso sbepmaturities magazine 2013 advantageous to convert to peso debt because bonds, its npv is the same as the new peso debt used

11

seminar

Seminar on Renewable Energy

L

ast May 24, 2013, the SBEP together with Atty. Pete H. Maniego, Jr. (an SBEP alumnus and Chairman of the National Renewable Energy Board) organized a whole-day special seminar on “Renewable Energy: Challenges and Opportunities” at the PLDT Hall of UA&P. It was attended by 48 executives from varied industries, officers of the Department of Energy, renewable energy developers and financing institutions.

The Renewable Energy (RE) seminar was specifically designed for the knowledge and appreciation of senior executives, managers and investment officers of energy companies, power utilities, consultants and investors, CPAs, engineers, and lawyers.

SBEP’s RE seminar equipped the participants with the basic knowledge and better understanding of (1) the Philippine Energy – current situation and outlook; (2) the National Renewable Energy Program; (3) renewable energy mechanisms and incentives; renewable energy projects – challenges, opportunities, and success stories on the following: (4) biomass; (5) geothermal; (6) solar; (7) hydro; (8) wind; (9) financing renewable energy projects; and (10) climate change mitigation programs.

The distinguished speakers were the following: (1) Atty. Pete H. Maniego, Jr. – Chairman of National Renewable Energy Board; (2) Mr. Jesus T. Tamang – Director of Energy Policy and Planning Bureau of DOE; (3) Mr. Mario C. Marasigan – Director of Renewable Energy Management Bureau of DOE; (4) Mr. Jose Maria P. Zabaleta, Jr. – Managing Director of Bronzeoak Philippines; (5) Mr. Francisco G. Delfin, Jr. – President of Maibarara Geothermal, Inc.; (6) Mr. Dante M. Briones – President of Philippine Solar Power Alliance; (7) Mr. Jose Silvestre Natividad – President of PASSHydro; (8) Mr. Gerry Magbanua – Vice President of Alternergy Philippine Investment Corporation; (9) Mr. Benel D. Lagua – Executive Vice President of the Development Bank of the Philippines; and (10) Mr. Arnold Belver – Planning Officer of the Climate Change Commission.

(Alonica R. Salazar)

sbep magazine 2013

13

cover story

Impact of Investment Credit Rating on the Philippine Economy

by Victor A. Abola, Ph.D. Senior Economist and Viory Yvonne T. Janeo, MSIE Economist

Over the past seven quarters (Q1-2012 to Q3-2013), the Philippines demonstrated a resilient economic growth of above 6%. This has spurred expectations (early 2013) that the country will receive a credit rating upgrade from the three major credit rating agencies. It did not take too long before this expectation materialized when Fitch upgraded the Philippines’ sovereign credit rating to BBB- (i.e., investment grade) from BB+ last March 2013, allowing the Philippines to join the roster of highly bankable countries for the first time.

Standard and Poor’s followed suit last May and the complete transformation to investment grade status occurred last October when Moody’s finally gave its vote of confidence. The wave of credit upgrades reflects robust PH economic growth, improved fiscal management, and good political governance.

14

THE philippines GETS AN investment grade RATING

cover story The triple upgrade comes as a welcome nod of approval for the country since independent reviews on sovereign debt ratings serve as a benchmark for investors and businesses. Tasked with conducting such reviews are three major credit rating agencies --- Moody’s Investor Services (Moody’s), Standard and Poor’s (S&P), and Fitch Ratings (Fitch). Ratings are intended to be forward-looking qualitative measures of the probability of default. Table 1 shows the different rating categories and their interpretations.

This important milestone is believed to attract more investments and bring huge capital into the country. Empirical studies have identified three major benefits of achieving an investment grade status (i.e., Lower Sovereign Borrowing Costs, Lower Corporate Financing Cost, and Higher Investment Flow).

Lower Sovereign Borrowing Costs An investment grade rating for a sovereign suggests that the country has adequate ability to pay its debts, indicating a lower risk of default from its financial commitments. This translates to lower borrowing costs. Moreover, empirical studies have generally concluded that an investment grade is associated with lower spreads.

In particular, the study of Jamarillo and Tejada (2011) of the International Monetary Fund (IMF) pointed out that reaching an investment grade status reduces sovereign spreads by 36% above and beyond what is applied to its macroeconomic fundamentals, ceteris paribus. Meanwhile, an upgrade within an investment grade asset class reduces spreads by around 5-10%. Another IMF Country Report showed that sovereigns with better credit ratings have tended to enjoy lower spreads (see Figures 1 and 2).1

Apart from the lower default risk associated with holding investment

Table 1. Sovereign Credit Ratings by Agency S&P

Moody’s

Fitch

Investment Grade Highest quality, reliable, stable

AAA

Aaa

AAA

High quality

AA

Aa2

AA

Strong payment capacity

A

A2

A

BBB

Baa2

BBB

Likely to fulfill obligations, ongoing uncertainty

BB

Ba2

BB

Financial situation varies considerably

B

B2

B

Vulnerable, dependent on favorable economic conditions to meet payments

CCC

Caa

CCC

Highly vulnerable, speculative

CC

Ca

CC

Close to default, may be in arrears

C

C

C

Defaulted on obligation

D

Adequate payment capacity Speculative Grade

D

Note: Within rating categories, S&P and Fitch use plus (+) or minus (-) signs to show relative standing, with A+ being better than A or A-. Moody’s uses a modifier 1,2, or 3 for the same purpose, with A1 being better than A2 or A3.

Source: Jaramillo & Tejada (2011). IMF Working Paper. Sovereign Credit Ratings and Spreads in Emerging Markets

grade bonds compared to speculative bonds, another important reason for this phenomenon is that central banks often require banks holding speculative grade bonds to set aside an allowance for possible loss for these issues.

Lower Corporate Financing Cost Credit ratings are based on sovereigns’ broad set of economic, social, and political factors. The determinants of investment grade status includes: external public debt, domestic public debt, broad money, exports (all as percentage of GDP), and a political risk index.2

A credit upgrade to investment status signifies improvements in the country’s performance, which is used as a proxy for

an improved business environment. This implies that sovereign creditworthiness translates into corporate creditworthiness as well.3

Lower sovereign risk expands access to financial resources from major international financial markets and help obtain favorable terms (diversification of funding and extension of maturities) when borrowing from the international market, resulting in lower corporate borrowing costs.4 The study of Jaramillo et. al (2010) revealed that upgrades to investment grade status reduce corporate debt costs substantially.5 In particular, the results suggested that a one notch change in sovereign ratings in emerging economies leads to a 36 bps reduction in corporate spreads.

1 Jaramillo et. al (2010). IMF Country Report. Panama: Selected Issues Paper 2

Ibid.

3

Borenztein et. al. (2007) confirmed the positive relationship between sovereign and corporate ratings. They found out that two notches upward movement in sovereign rating raises the average rating of private companies in that country by one notch.

4

Reinhart and Rogoff. (2004). Capital-Account Liberalization, Debt Financing, and Financial Crisis: Serial Default and the ‘Paradox’ of Richto-Poor Capital Flows.

5

Jaramillo et. al. (2010). IMF Country Report. Panama: Selected Issues Paper.

sbep magazine 2013

15

cover story Figure 1. Sovereign Spread and Ratings (Selected years, basis points) economies grew by 111% as it approached the awarding of the investment grade status and rose further by 72% after the investment status was granted.6

That the country needs foreign investments to bring its economy to a rapid-growth path may be seen in the table below which shows how the country has lagged behind its Asean neighbors in terms of net foreign investment as a percent of GDP.

Source: Jaramillo et. al (2010). IMF Country Report. Panama: Selected Issues Paper

Figure 2. Sovereign Spreads (Median, basis points)

Conclusion Overall, achieving an investment grade status for its foreign indebtedness can provide a strong impetus for a country’s economic growth to accelerate. The lower borrowing costs for the national government and private companies and the inflow of investments can free up government funds, which can be used to finance other productive activities (i.e., infrastructure development, education, and health reforms) needed to promote the country’s economic development.

Nonetheless, while the effects of an investment grade cannot be ignored, it is important to maintain economic resiliency and prudent fiscal management in order to sustain the gains it provides and to gear up the economy to further upgrade its rating status and economic standing.

ASEAN +2

FDI net inflows (as % of GDP) 2000

2005

2012

Philippines

2.8

1.6

1.1

Malaysia

4.0

2.7

3.2

Indonesia

-2.8

2.9

2.2

Source: Jaramillo et. al (2010). IMF Country Report. Panama: Selected Issues Paper

Thailand

2.7

4.6

2.9

Finally, the good effect of achieving an investment grade rating is the added attraction that a country obtains for foreign investments. Subject to information asymmetry, investors get their cue on the country’s investment climate from publicly available sovereign credit ratings. Credit ratings help shape investors’ perception of the country’s economic health and, therefore, influence to a significant extent

Singapore

17.2

14.6

20.6

Vietnam

4.2

3.7

5.4

Cambodia

4.1

6.0

11.1

Lao PDR

2.0

1.0

3.1

Mongolia

4.7

7.3

43.3

China

3.2

4.6

3.1

6

the inflow of investments.

An investment grade is like a seal of good housekeeping, which indicates that it is safe to do business in the country. Thus, a country which has attained an investment rating will more likely experience an influx of huge capital investments into the country. A study by HSBC (2011) supported this argument noting that the historical average annual FDI of emerging

Source: World Bank, 2013

HSBC Global Research, BBB or Not BBB? (2011). Turkey’s three equity themes, with investment grade under spotlight.

16

THE philippines GETS AN investment grade RATING

SBEP Class 2013

ADRIANO, Victoria Joy B. “Vikki”

BILLONES, Antonio P. “Tony”

Director / Genera l Manager DMC Urban Property Developers, Inc.

ANAMIRTHAM, Chandramogan “Chandra” President & General Manager HGST Philippines Corp.

Vice Chairman Public Safety Mutual Benefit Fund, Inc.

BONTIA, Roberto V. “Bobby”

Vice President, Tollways Management Corp.

Chang, Edward G. “Edward”

President & Chief Executive Officer Asia Pacific Express Corp.

Cruz, Carmina E. “Taimy”

Director PNOC Dev’t. & Management Corp.

CABRAL, Maria Catalina E. “Cathy” ANTONIO, Eulogio Jr. P. “Eloy” Distribution Manager Angeles Electric Corp.

Assistant Secretary Dept. of Public Works & Highways

DAVID, Elsie M. “Elsie”

AVP Product & Marketing Division Jg Summit Petrochemical Corporation

Carandang, Maricar V. “Maricar” BARROGA, Ofelia S. “Ofel”

Partner Diaz Murillo Dalupan and Company

Senior Business Manager Hutchison Global Communications Ltd.

De Castro, Roderick F. “Ricky” Executive Director Team Energy Foundation, Inc.

Cayabyab, Michelle P. “Michelle” Baysa, Jennifer C. “Jenny” Manager Globe Telecom Inc.

18

Manager, Public Safety Mutual Benefit Fund, Inc.

Cenas, Grace J. “Grace” philippines investment grade

Administrator National Dairy Authority

Divina, Arnold T. “Arnold” President & General Manager Dayton Commercial, Inc.

SBEP Class 2013

DOLINA, Jose Salvador M. “Joel”

Managing Director, Zurich Biopharma Inc.

FABI, Rolendes C. “Rollie”

Treasurer-Director, FRD Food & Spices, Inc. Mesa/La Mesa Grill Group

GARRATON, Laarni F. “Arni”

VP/CFO/Head of Administrative Operations, Insular Life Assurance Co., Ltd.

IBAÑEZ, Robert P. “Robert”

Entrepreneur, Alliance 4 Health

Ocampo, Justino Juan R. “Justin”

TUNGALA, Rizaldo A. Jr. “Zaldy”

Pelaez, Jose Mari G. “Joey”

VALDEZ, Raymond C. “Raymond”

QUE, Charlie T. “Charlie”

Velasquez, Mary Jane T. “Jane” Manager Public Safety Mutual Benefit Fund, Inc.

Senior Vice President First Metro Investment Corp.

Vice Governor Province of Misamis Oriental

Vice President Hutchison Global Communications Ltd.

SANTOS, Maria Isabel C. “Issa” IT & Systems Director Gawad Kalinga Community Dev’t. Foundation, Inc.

Vice President / Director Public Safety Mutual Benefit Fund, In

Senior Assistant Vice President Development Bank of the Philippines

VILLAVIRAY, David R. “Dave” Senior Vice President D.M. Consunji, Inc.

JAVIER, Eric Q. “Eric”

Trustee Public Safety Mutual Benefit Fund, Inc.

SUPREMO, Aries C. “Aries”

Managing Consultant, Indra Sistemas

WONG, Manuel T. Jr. “Bongbong” Executive Director PAREF Northfield School for Boys

MANZANO, Alexander O. “Alex”

Plant Operations Manager, Nutri Asia, Inc. sbep magazine 2013

19

SBEP’s 39th Anniversary Celebration:

The 2013 Golf Tournament and Homecoming Dinner

by Alonica R. Salazar

The SBEP’s 39th anniversary celebration featuring a Golf Tournament and a Homecoming Dinner was held last February 22, 2013 at the WackWack Golf and Country Club, Mandaluyong City. The success of both grand festivities could be credited to the hard work and generosity of Class 2013 - the host batch.

20

THE philippines GETS AN investment grade RATING

The exciting day started with a Golf Tournament at the West Course of the Wack-Wack Golf and Country Club.

Dr. Victor Abola (SBEP Director), Dr. Chandramogan Anamirtham (Class 2013 President / President and General Manager of Hitachi Global Storage Technologies Philippines Corporation), and Mr. Sergio Ortiz-Luis, Jr. (Chairman of the Philippine Chamber of Commerce and Industry), led the ceremonial tee-off at 8:00am. Old friendships were rekindled and new ones forged as the tournament breezed through the day. A total of 48 alumni, faculty, current participants, and guests joined the tournament.

Dr. Chandramogan Anamirtham (Class 2013) came out as the Overall Champion and Mr. Rodolfo Brobio (Class 2011) emerged as the Low Gross Champion. Division winners were Mr. Raul Lambino for Class A; Mr. Carlos Serafica for Class B; Mr. Paul Torres for Class C. Batch Champion was Class 2013 represented by Dr. Chandramogan Anamirtham and Mr. Robert Ibañez. For the Fun Holes, Mr. Jose Laraya bagged Nearest to the Pin at Hole #14. Mr. Edwin Tan won the Most Accurate Drive at Hole #5 and Mr. Rododlfo Brobio bagged the Longest Drive at Hole #10.

The Hole-in-One Prize was a Club Car golf cart. Unluckily, nobody won the golf cart.

All those who participated in the golf tournament were happy to go home with a fantastic giveaway package comprised of the following: NIKE dry-fit shirt, NIKE golf cap, Nike sleeve of balls, and golf umbrellas. The SBEP and Class 2013 would like to thank the following generous

sponsors for making the 2013 Golf Tournament a huge success: for Platinum Sponsors – First Metro Investment Corporation, Hitachi Global Storage Technologies Philippines Corporation, and South Forbes Golf Club; for Gold Sponsors – Metro Pacific Tollways Corporation, Stradcom Corporation, Manila North Tollways Corporation, Public Safety Mutual Benefit Fund, Inc., and Club Car; for Silver Sponsors – Diaz Murillo Dalupan & Co., M.V. Sabalburo Construction, Associated Marine Officers, Ortigas & Co., Maple Leaf Movers, Ayala Land, Inc., Ultra Elite Golf Club, Hotel Masfino / Royal Northwoods Golf Club, J.E. Manalo & Co., Mesa, Semirara Mining Corporation, Petron, SAFI / NutriAsia, AHCC Nutrients Phil., Inc., E.C. Builders & Trading, Metropolis Construction, B-Mirk Enterprises, Governor’s Office – Tarlac, Landbank of the Philippines, National Grid Corporation of the Philippines, Team Energy, DM Consunji, Inc., and National Dairy Authority.

The festivity did not end at the golf tournament. Shortly before dinner, the Banquet B of the Wack-Wack Golf & Country Club was brought to life as family and friends of the alumni and Class 2013 celebrated the Homecoming with a feast prepared by ‘Via Mare.’ A total of 112 alumni, current batch, guests, faculty, and staff graced the Homecoming Dinner.

The entertaining program started with an invocation by Gen. Eric Javier (Class 2013 weekday class vice president). The recognition to Class 2013 was delivered

by Dr. Bernardo Villegas and the welcome address was given by Dr. Chandra

Anamirtham (Class 2013 president). The masters of ceremonies for the night were Asec. Cathy Cabral, Mr. Ricky De Castro, and Mr. Joel Dolina (Class 2013).

Throughout dinner, the guests were serenaded by the celebrated band, “The MOBB” – featuring our very own alumni – Mr. Aton Atilano (Class 1982) and Mr. Gerry Reyes (Class 1999). The dance floor came alive as the guests danced to the music of the 70s, 80s, and 90s.

The amazing raffle prizes glued the audience to their seats. These were donated by the alumni and Class 2013 which included a 32” LED Samsung FullHD TV, an IPAD mini 16GB Wi-Fi, 2 Golf Memberships for 1 year at South Forbes Golf City, 4 gift certificates for 2 pax for a 3D/2N stay in a Studio Suite at Alta Vista Boracay with breakfast, 2 gift certificates for a 10-hour chauffer service

by AVIS, 2 WD 500 GB portable hard drives, and an IWATA bladeless fan – for the major prizes.

Mr. Roberto Juanchito T. Dispo, President of First Metro Investment Corporation, delivered the inspirational message to the alumni and guests. The homecoming dinner formally concluded with our program director, Dr. Victor Abola’s closing remarks.

The SBEP would like to express gratitude to all the sponsors for their generous contribution to the SBEP Endowment Fund. Likewise, the program would like to acknowledge Class 2013 and all the hardworking SBEP staff for making the festivities of February 22, 2013 an enjoyable and memorable experience for everyone.

sbep magazine 2013

21

seminar

Intensive Training on Bonds

L

ast May 28, 29 & 30, 2013, the SBEP organized a three whole-day “Intensive Training on Bonds” at the Case Room 1 of UA&P. It was attended by 15 senior executives from varied industries and services sector.

The Intensive Training on Bonds equipped the participants with a systematic and integrated learning on all bond and bond-related products available in the market today. Computer based exercises were provided to the seminar participants to facilitate straightforward and practical learning.

Dr. Victor A. Abola, SBEP Director, also an Economist and Finance Expert, delivered the course for Days 1 & 2. The following topics were covered: Credit Analysis and Interest Rate Risk; Bond Types and Conventions; Basic Fixed Income Mathematics; Zero-Coupon Pricing and Yield Estimation; Fixed-Rate and Floating-Rate Bonds; Bond Yield Curves; Measures of Return on Investment; Interest Rate Sensitivity; Managing Portfolio Risk; Convexity; and Convertible Bonds.

For Day 3, Mr. Augusto M. Cosio, Jr., President of First Metro Asset Management, Inc. (FAMI), the fund management subsidiary of the investment house – FMIC, and formerly Vice President of Banque Paribas Capital Markets Group in Hong Kong, delivered the following topics: Bond Portfolio Management Models; Holding Period Yield Immunization; Bond Portfolio Management Strategies; ROPs and Foreign Denominated Bonds.

The Intensive Training on Bonds is being offered by the SBEP bi-annually, in May and November. It is designed for the knowledge and appreciation of Chief Financial Officers, Treasury Managers, Bond Traders, Bank Officers, Risk Officers, Investment Managers, Trust Managers, Certified Public Accountants, Lawyers, and Individual Investors. Interested participants may call the SBEP Alumni Office at 6342820 / 6343095 / 6370912 loc. 222 or send an email to sbep@uap.asia. (Alonica R. Salazar) sbep magazine 2013

23

Characters of SBEP Class 2013

trip—Jenny is always in a dress even during a long flight. She never runs out of stories to tell. She would light up any gathering ... bubbly Jenny is someone we’d love to have around at all times.”

—Taimy Cruz Antonio Billones “Truly an officer and a gentleman.

Soft-spoken and kind as a person but firm and just as a leader.

In the field then, now in the boardroom.”

—Eric Javier Victoria Joy Adriano “Vikki…a new found friend and a lady full of wit and humor. She tries to find good in whatever that comes along her way even in unfavorable situations or circumstances….no wonder that she’s very easy to get along with. She also shares her thoughts and ideas during class discussions. With all of these, Vikki manages to stay young (at heart) and be a smart woman as she is.”

—Michelle Cayabyab Chandramogan Anamirtham “He is an innovative manager with great leadership skills. His insights are ahead of his time — truly a model for others to follow.”

—Robert Ibañez Eulogio Antonio, Jr. “Eloy is definitely a contender for the most gorgeous SBEP student of all time. His good looks come with a very charming and easy smile. Aside from the looks, he is also very pleasant to be with. He is very approachable and puts

you at ease. He also has a very organized mind. From the way he approached our case studies, he is not the type who would take shortcuts just to get things done for the sake of getting them done. He wants conclusions to come from a wellorganized data. Any institution would be privileged to have him around.”

—Bongbong Wong Ofelia Barroga “Ofel is a very interesting person! She is the lady with an ABC – the Accountant and Audit and Business Assurance Partner of Diaz Murillo Dalupan and Company, the Brains, and the Charm!

She has extensive world-class work experience and she is well-traveled. Her discipline, determination, and dedication at work and in SBEP are truly inspiring of Ofel!”

—Arni Garraton Jennifer Baysa “She is the only one who got away with the dress code of UA&P... No skirt length above the knee. One SBEP2013 colleague did make a comment during our Jakarta

Roberto Bontia “Mr. Bobby Bontia is a gentleman in his own right, calm and softspoken but strong-minded, friendly and approachable. He shares his indepth knowledge of Project Analysis professionally with our team members and I learned so much from him. He is a good friend. Cheers Bobby and more power to you and all of my SBEP friends.”

—Edward Chang Maria Catalina Cabral “Cathy typifies a new breed of government executives: pretty, young and energetic. I have always seen her taking classes seriously but behind that she can be game and jolly too. And she can sing! Most of all, what strikes me about her is, she knows how to listen, a true professional indeed.”

—Grace Cenas Maricar Carandang “A golden smile and an angelic personality – a perfect deal – which could only be found in Maricar. She would sbep magazine 2013

25

Characters of SBEP class 2013 seem to be soft-spoken but she is actually very determined and opinionated . She is someone you could rely on for meetings and group projects. Someone whose friendliness oozes from head to toe. A magnificent woman who will always have a special place in all our hearts.”

—Jenny Baysa Michelle Cayabyab “Michelle is one of our youngest dynamic professionals in the batch. Amidst the tons of assignments and group presentations, we can always count on Michelle who generously shares with us her accounting forte! Charming, intelligent, energetic, (a promising singer), and a very dear friend to all; we are so privileged to have Michelle in the powerhouse cast of SBEP 2012-2013!”

—Vikki Adriano Grace Cenas “As a fellow public servant, Grace lives up to our doctrine of dedication to the service. What I love about her is her being unassuming and modest but very passionate with her work in the dairy industry. As a colleague in SBEP, she provides full support and participation especially in our out-of-town activities.”

—Cathy Cabral Edward Chang “Edward is one of the two non-Filipino members of the class but probably knows more insights on Philippine economy than the average Filipino having spent more than a decade in the country and currently heads the Korean Chamber of Commerce Philippines, Inc. Our class has been fortunate with Edward’s sharing on Korea’s growth experience and relating this to our own country’s setting.”

—Bobby Bontia Carmina Cruz “She is our self-proclaimed Ms. SBEP of Class 2013. She would always sit in the first row seemingly composed and relaxed. She has her own special way of making others happy with her witty jokes and easy smile which will brighten your day whenever you are feeling down. She is someone who has a dangerously contagious laugh and has a prowess of making others smile with her stories and hilarious jokes. However, she can be serious when necessary and is always

26

ready to lend a listening ear. Alongside this, Taimy ensures that everyone is up to date by setting up our own SBEP 2013 Class Group emails were she religiously sends updates on the latest trends and economic changes in the Philippines and the rest of the world.”

—Jenny Baysa Elsie David “Elsie is fierce in her career, my impression from our initial encounter in Baguio when she first joined us. She is at the same time, a caring friend. We are fortunate to gain knowledge from her experience and wisdom.”

—Taimy Cruz Roderick De Castro “Rick looks calm, quiet and always seem to be in deep thought. What one can't see is that he is smart and very dedicated to helping the less fortunate. But you will not hear him say about it unless you talk to him and know more about him.

Street smart, funny and one great guy to be with.”

—Aries Supremo Arnold Divina “Arnold, a strategic thinker, always thinking ahead on how to make things easier. The best thing is that he makes everything look easy by smiling and staying calm. Beneath that smile, however, is a serious person that calculates and thinks what is the best move-- like a chess grand master. He can

THE philippines GETS AN investment grade RATING

easily remember topics and answers without breaking a sweat.”

—Aries Supremo Jose Salvador Dolina “My first impression of Joel—he reminds me of my college professor who is strict, and yet a very refined gentleman, who only works for the best for his students. True enough, behind the baritone voice reflects the man with a great love to learn. He shares his wisdom as always to the team, a servant leader not only to his corporate team as well as to his colleagues in SBEP and a loving father to his wife and kids.”

—Alex Manzano Rolendes Fabi “Rollie is approachable and very generous.

We enjoyed free sumptuous dinner in his resto on several occasions. He was very patient in sharing to us his experiences in putting up a business and some helpful tips on how to grow it. In the class, I consider him as one of our consultants. He is knowledgeable in almost everything. He was very diligent in his studies and showed positive attitude towards learning new things.”

—Raymond Valdez Laarni Garraton “Laarni is fun to be with and you can always have a lively conversation with her. She is a religious person and finds so much joy in being a mother to her two wonderful daughters”.

—Ofel Barroga

Characters of SBEP class 2013 Robert Ibañez “Robert is one of the best I have ever seen at creating instant lifelong friends.

Sincerity and honesty is his second nature.”

—Chandra Anamirtham Eric Javier “A conscientious Police General, a straightforward brother-in-arms, and above all, an officer and a gentleman”.

—Tony Billones Alexander Manzano “On the very first day of the SBEP, I had the privilege of meeting my first classmate who was all alone, reading the full blue binder (with his eyes closed), a debonair, energetic, and dependable, and all these attributes fit one very important person, “ME”, ehe, I mean, MR. ALEX MANZANO. In all team assignments, we were together in the group (wow, was this a punishment?). That is why I’ll be attending the sessions of the next batch.

For 1 year, aside from learning the intricacies of Economics, I also gained a new friend, whose insights and principles in life are now part of mine, cheers to you, Mr. Alex Manzano.”

—Joel Dolina Justin Ocampo He is mysterious, Looks smart and very intelligent, But seems naughty inside J —Charlie Que Josemarie Pelaez “I had reservations talking to him, so soft spoken, so formal, so alienated that the group then was very hopeful of his full support to the activity. But when we started working, the real Vice Governor surfaced. He was into it right from the tip off, very animated, buoyant, spirited that he suggested lots of things, ideas and helped the team’s plan run smoothly—an embodiment of a team player. Oh, one other thing, he doesn’t like discussing politics.”

—Joel Doringo

outgoing individual giving insightful comments in class and during case discussions. He is the class “telco” expert with a broad perspective.”

—Justin Ocampo Maria Isabel Santos “Issa, the juggler. Her juggling act of motherly duties to her small, young kids; the demands and travels for Kawad Kalinga, is a fulfilling feat. She exuded an endearment meeting my daughter for the first time—the essence of motherhood.

The success of Gawad Kalinga is the hand of motherhood.”

—Taimy Cruz Aries Supremo “Aries Supremo is my batch-mate year 2012-2013 and also my batch-mate year 2013-2014. He is an athletic person despite his heavy frame. He possesses a good sense of humor. He seems to be always sleepy in the class. Seriously speaking, he has a good heart and he always thinks about others.”

—Arnold Divina Rizaldo Tungala “Gen. Zaldy A. Tungala is indeed an officer and a gentleman. A man of few words but certain on what he says.”

—Jane Velasquez Raymond Valdez “Raymond is a very smart and hardworking group mate. We are fortunate to have him in our team during the Project Analysis presentation session in Jakarta because of his experience as Assistant Vice President of DBP,

evaluating project proposals and financial statements.”

—Rollie Fabi Mary Jane Velasquez “It has been a pleasure working with Jane as a classmate in UAP and a co-employee in PSMBFI. Soft spoken as she is, but always willing to offer a hand to anyone who needs her help. As we complete SBEP, more challenges will come along our way. As we have done in past and we will continue doing, united we will always stand. Congratulations for achieving another milestone my friend!”

—Michelle Cayabyab David Villaviray “A good fellow and a good-looking man.

Kung titingnan mo siya he is a reserved type na tao but actually very friendly siya at madaling makagaanan ng loob. Nice to meet you, Dave.”

—Riz Tungala Manuel Wong “For a short counted time we met, I found him to be of help to everybody, much more being a religious man which makes him happy. He is focused on his career as well as to his objective, a disciplined man, imparting his experiences in his field thus making a big contribution in the class and educating all of us.”

—Eloy Antonio Jr.

Charlie Que “Charlie is one guy in class who first appears to be the quiet type but eventually you discover a warm and

sbep magazine 2013

27

SBEP Jakarta Trip 2013

Start of our journey as SBEP2013 in

our cozy coaster

By Ms. Carmina Cruz Our journey as SBEP Batch 2013 started as we stepped out of Gate 6 of NAIA 1 all breathless and frantic. We almost didn’t make it to our connecting flight to Jakarta because of the delayed departure from home to Singapore. We all snaked our way through the crowds and lines and only took our first breath when we finally arrived at Soekarno Hatta International Airport. The heat and humidity known to Indonesia greeted us together with Syawal, our tour guide, who held a banner with our group’s name on it. We saw him and looked forward to his greeting but he looked past us. Chandra teased that Syawal was probably expecting young students and now could not believe the group he was seeing before him – all middle-aged! He was going to be stuck with us for the next 6 days.

We boarded a coaster and quickly learned at the onset that traffic in Jakarta can be disheartening (and you would have thought that motorbikes in Manila are already a nuisance). But one has to be circumspect with the trip and must go beyond the traffic jams and the proliferation of motorcycles at every corner (and needless to say get too distracted with the shopping sprees?). It helps in a way to put into perspective that both the Philippines and Indonesia are in the crossroads of attaining real and sustainable internal growth. And thus being in Jakarta during this time was a good first hand experience and perhaps a preview of the city and country touted as the 4th largest economy in the next 2-3 decades.

Syawal, Glodia and Ms. Billas introduced themselves and distributed our packed meal of chicken and rice in the coaster. This simple first encounter with the people would reinforce the notions of how similar our demographics are (not to mention the features and similarities in the language). Though I was personally amazed how tolerant (and maybe a bit laid back) Indonesians are amidst the snail pace of traffic queues, something you would not observe among Filipino (especially jeepney drivers). Their customary way

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of addressing people with the use of “Pak” and “Ibu” is also something worth appreciating which to me is a clear manifestation of their culture of respecting individuals.

On the other hand, I also appreciated the many facets of why the Philippines… why Filipinos, for that matter, have certain advantages as a people compared with our South East Asian neighbors… speaking/comprehending the English language being one (I never imagined myself doing hand signals and facial demonstration in front of a cashier, whose features are pretty much the same as mine, just to buy “kakang” and soda in a local convenience store).

Upon checking into the Gran Melía hotel, I was impressed. It held up to its 5-star rating because its architecture and interiors of old wood, marble, alabaster and raw mother of pearl exuded sophistication and class. The hotel had the perfect ambience for what we came here for – to study, but the good food almost became a distraction!

THE philippines GETS AN investment grade RATING

There was just too much food to whet our varying palate. They showcased cuisine of different countries – Indonesian, Western, Japanese (their fresh salmon sashimi melts in your mouth!), Chinese and their bountiful desserts and delicacies and homemade delicious ice cream. … at the Gran Melía Hotel, get it?

Finally, I headed to my assigned room that I was going to share with Ofel Barroga.

Our schedule was tight and our pace was fast.

Our days started with a very early breakfast in the morning and our lecture series started immediately after.

Day 1 Our first breakfast together was also used as a time to get to know one another again and this time in a foreign land. It was interesting to look at other people’s plates to see what they chose over the wide selection of international breakfast buffet.

SBEP Jakarta Trip 2013

The morning chat was mostly on wanting to find out what the itinerary for the day was, how far people are in the assigned readings and most importantly, how each person’s projana was coming along.

I remember we were still at NAIA the day before and there were some who were still fumbling with their projana slides while others were showing off what they’ve finished. Scarily serious!

Justin, on the other hand, pulls out his case studies on the plane just before we took off from Singapore to Jakarta and crammed to read them.

Ferociously serious!

Our group has always been on time. That seemed to be our common goal – to never be late for lectures since we didn’t want to miss one word from any of our professors. Incredibly, deadly serious, aren’t we?

Each of us from the SBEP2013 was always properly dressed especially here in Indonesia – corporate attire than our usual casual wear during our weekend lectures.

Dr. Dy starts his Projana lecture. Chandra, who had flown half the hemisphere to catch us at our flight to Jakarta, seemed to be holding up well and absorbing the lectures in spite of the three different time zones he’s had in a span of 48-72 hours. Charlie, who frequents Jakarta for official business was comfortable as expected. Our new pals, Dr. Ed Malagapo, Juliet Albaño and Miriam Carpio sat together and participated well in class.

Gen Eric Javier was very engaging during our lecture series, too. He usually attends the weekday lectures, thus, this was a good chance for us to learn from him as well. He is in group IV with us (Ofel, Alex, Eric, Joel and I) and our work together has been very interesting.

As group IV had two working groups in Manila, Dr. Dy’s lecture gave us a different perspective on how to improve on our presentation. I gather each one believed the same – great minds run deep.

Dr. Abola gave us our afternoon lecture on Business Ethics. It was a very important lecture since business ethics has not been properly implemented and practiced and it is high time

Filipinos do so. This will certainly help make our country more attractive to foreign investors and raise the bar to become an emerging country.

And then off we went on our coaster that we will soon learn to be a cozy ride to our first dinner out at Warung Tekko Restaurant, a native Indonesian restaurant with its delicacies. As we waited for our coaster to head back to the hotel, some dropped in at a convenience store (was it 7-11?) to have a taste of local chocolates.

Traffic was still horrific even in the evenings.

It took us over an hour to get to the restaurant.

Traffic had eased a bit driving back to Gran Melía at around 9:30 pm. As we entered the grandiose lobby once again, we were greeted by the huge block of mother of pearl finely lit for the evening’s pleasure.

But students as we were on this trip, we all scampered to work on our presentations.

The lobby lounge was tempting as it is to chill over with a glass of wine or icy beer and enjoy the good music that was led by 2 female lead vocalists and by a male saxophonist who played mostly Filipino pop.

The serious SBEP2013 must buckle down and work. Our group found ourselves at the corner of the lounge finishing up on our presentations. Gen Eric Javier was analytical which made my head spin round and round. Ofel was challenged by Gen Eric’s intellect. Alex was the efficient secretary and encoder who caught up easily with Excel and its miraculous approaches to be in step with Ofel and Gen Javier. Joel enjoyed his beer as he eagerly listened to the group discussion. We were finally done at 1:30 am.

Chandra’s group (Group I) were at a far distance across us. They were closer to the band at the lobby lounge. They finished earlier and Chandra, Ricky, and Raymond dropped in our group to bid us good night … or probably to make us envious that they finished ahead of us!

As Vicki would say, “My Projana groupmates, Rollie, Chandra, Ricky and Raymond – Awesome Team! Group 1. We concluded and we agreed to plant “paminta” (black pepper), and just KILL all the coconuts! (Higher FIRR and EIRR)”

Day 2 Zzzzzzzzzzzzzzzzz … Our breakfast was at 6:30 again but we were all hardly awake but SBEP2013 will endure!

I had an interesting encounter at our breakfast table today. Dr. Ricky Solamo was with us and because he was very animated, Bongbong, Ofel, and I perked up for the morning. Of course, the whole session of lectures and project analysis with Dr. Rolly Dy, Dr. Vic Abola and Dr. Emil Antonio top bills the trip!

Despite the long tiring nights, our struggle to wake up for breakfast and meet in class, and fighting over hypnosizzz... everyone was still generally eager to listen, learn and participate in the discussions. We didn’t want to miss out any new terminology, philosophies, current events and of course Dr. Abola’s economic ratios and formulas.

As we were rushing to the function room for our Dr. Antonio lecture, Raymond kept on saying “Good night, Taimy,” Weng was laughing her heart out. At least Raymond knew how to keep Weng wide awake. On second thought, Weng didn’t have to stay up till 1 am with any of our groupies!!!

Each one of us was dressed in our best attire – the debonair SBEP2013 men in dark coats and ties, refined and stylish. The high level SBEP2013 women in power suits, even if we were all walking zigzag to the function room from our new quest of breakfast buffet.

I was told that Dr. Antonio did not expect any of us to show up in his 8am lecture. He expected one or two at most since we were all up until past midnight to complete our Projana presentations. It turned out to be a pleasant surprise for Dr Antonio … we were all there. COMPLETE ATTENDANCE and very alert!

I am sure we will all always cherish this last lecture series we’ve had with him. He didn’t skip a beat and yet, his cancer had recurred.

Sadly, I missed out on what would have been our last one-on-one chat in Jakarta due to our tight schedule.

At the lunch buffet, the SBEP2013 always gravitated towards the recommended dish … this time, it was the noodles soup and the fresh salmon sashimi that the Chef hid. You had to personally ask for it! You would see all of us eating the same meal!!! Each one of us was definitely a team player even during meals!

This to me meant that we were one kindred spirit who will nurture the friendships we made for life, not just as future business partners but also as personal friends.

Having the same dish for lunch gave us the energy we needed to survive the afternoon of presentations and talks thereafter … it was a tough eye-opener indeed!

We all tried to improve a slide or two just before Dr. Dy walked in to start our presentations.

Unfortunately, not everyone read all the case studies. Dr. Dy could not reprimand us since we were no longer college students. However, it sbep magazine 2013

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special feature was embarrassing that we were remiss on our readings. I must say that each group did a good job in their presentations.

I heard it from the grapevine that Bobby called back his teammates after 1 am to get together once more and discuss more inputs on their Projana. Bobby is one of the guys I enjoyed interfacing with, even during our breaks from each lecture series. He always kept me on my toes.

Chandra, of course, is dynamite! Robert’s wit is contagious. Raymond is always laughable.

Alex is a mix of serious and funny; same with Zaldy. Joel can bring the house down. Tony is enlightening. Charlie is engaging. Rollie is a natural entrepreneur. Are you sensing that I only speak of men? Alright then … Jenny, Grace, Ofel, Cathy, Michelle, Vicky, Maricar could easily laugh, dance, sing to any tune and wit.

Since we were pressed for time, we failed to see one of my closest colleagues, Jenny, do their Projana and business ethics presentation. We had to move forward to the ASEAN representatives and the trade mission organized and coordinated by the Department of Trade and Industry.

Phew!! I am guilty of trying to keep my eyes wide open. The worst of it is that I was seated in front. I had to excuse myself and step out for 10 minutes to wash my face, few dance steps in the ladies’ room to shake off my sleepy head. I also needed a cup of wonderful Jakarta coffee. The bed was calling me but I had to refuse in the spirit of camaraderie. Besides, I did not want to miss out on an opportunity to potentially do business in Jakarta.

We were all there and I might as well make each minute memorable and fruitful. Again, this just goes to show that SBEP2013 are team players!

And so we ended the day with a photo-op with other representatives from the trade mission joining us.

Then we finally had an hour and a half of private time; Ofel and I sped off to our room but she couldn’t stop talking! My weary, heavy, sleepy eyes were neglected. And before I knew it, we now had to do a quick change from our power suits to more comfortable jeans and shirt to face our cozy coaster ride to our Lauriat dinner.

Lo and behold! Lauriat + karaoke = it’s time

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to let your hair down! The Lauriat was … *&^%$#@*()!@# . Ricky started belting out an Elvis Presley song he learned from his mother when he was little. He was great!

Cathy let her hair down and started with “I will Survive”. And so the battle of the microphone began since we only had 3 --- Michelle and guess who? GRACE!!! Weng was in chorus with the tres marias. She did a solo, too.

No one forgot that during our Homecoming in February, Raymond said he would rather sing than dance so that night, he had no choice. Zaldy was an Englebert Humperdink. Alex, Joel …

Bongbong were the back-up dancers. Bongbong moved his hips to the left and to the right! Get down on it, Bongbong!

As everyone tried to corner down Justin to sing, he ran out as swiftly as he could as it was finally time to head back to Gran Melía. As we got into the bus and found Justin, he said “I was ready to sing but you guys said it’s time to call it a night.” Yeah, right!

We met Maricar at the lobby and she asked Cathy how our Chinese lauriat dinner was…

Cathy remarked “sumptuous, wasn’t it, Taimy?”

Maricar believed her and was so envious – she had Kenny Rogers for dinner.

We all ended up going to bed close to 2:00 am. My kindest roommate, Ofel, sleeps with her headphones with music!

Day 3 As usual, 6:30 am was breakfast. This time, we tried another dish from another country. I had yet to try Indonesian. Yummy! I guess it was more gourmet prepared by a Chef than any of those we’ve had for dinner.

As we were boarding our coaster which has now become a cozy haven to us, I asked Weng where Joel and Malou were. Joel would sit at the back row where Ofel, Bobby, Raymond, Eloy, Dave, Eric and Marilyn, Vicki, Michelle, Justin would. Sometimes, Edward too. Weng said that Joel had just awakened and it was not fair to wait for him.

The traffic to Darya-Varia (Unilab unit in Indonesia) was horrible. As the presentation began, Alex, Ricky and Justin were shaking their

THE philippines GETS AN investment grade RATING

heads—Joel was missing! Our one and only pharmaceuticals boy was absent to experience our one and only plant visit in our Jakarta trip!

And then there was more food! I enjoyed the snake fruit. And Jakarta coffee is always a treat.

And now to be fazed by yet another lunch, Vicki and I sat together this time … Vicki has been doing the questionnaire bit – the survey we would fill up after an SBEP lecture. This time, it was meant to survey our meals. Oh my …

We went for lunch at Bogor Permai Restaurant. This time, Vicki, Michelle, Eric, Marilyn, Tony, Monina and I sat at the same table.

I’ve forgotten how unsavory our lunch was by listening to Tony, the true sense of an “officer and a gentleman” and to Eric’s stories as FVR’s “lefthand” man. It is always a delight since it is part of history to me, having missed out on those years living abroad.

Our next stop was shopping after having passed by the famous fountain rotund at the Plaza Indonesia Mall. Robert, Chandra, Ricky, Justin, Bobby and some of the guys decided to take a cab back to Gran Melía. If they couldn’t find one, they said they will also go shopping and meet us back at the coaster. As we arrived at the shopping area, Justin was at a panic! There were no cabs around and kept saying, “I don’t see any cab around. I don’t see any cab around!” I couldn’t stop laughing!

Our cozy coaster was parked at a quiet corner from the main street where one would easily find cabs and motorcycles driving around for passengers. It was a good, quiet street and yet we were right by a mall that was similar to Greenhills. I walked with Vicky and Michelle while the boys, Raymond, Justin, Ricky and Robert walked ahead of us. We ended up at the Plaza Indonesia Mall. As we were checking out each floor, I parted ways from the rest.

Ricky, Raymond and Robert were nowhere in sight. I tried waiting for them at the main lobby of the Plaza Indonesia Mall. I walked across to the high-end mall, the posh Grand Indonesia Mall, and ogled at each designer boutique that I loved – Chanel, Jimmy Choo, Donna Karan, Burberry … and finally, I stepped out and texted Raymond that I would be heading back to the coaster.

special feature

It turned out that I lost my bearings. My toes led me back to that Grand Indonesia Mall just beside the fountain. As Vicky would say “Taimy, I think that you were enchanted by the spirit of the fountain.” And since then, we were all drawn back to it.

I texted Raymond and he gave me instructions while I asked around for a landmark – Oakwood it was!!! When I finally got to the mall, I couldn’t find our coaster! It turned out, I was standing in front of a mall where the other mall was behind it and where our cozy coaster was comfortably parked right at the safest, quiet side street.

As I walked closer to the cozy coaster, Raymond was about to walk out to look for me. As I got up the coaster, it was so good to see all the familiar faces. Dr. Antonio was with us resting and yet he was with us all the way. Vicky and Michelle asked me if I was scared – I said “No. I guess one way or the other, I was confident that I’d find our cozy coaster with you guys on board.”

Justin, Ricky, Robert were back in our cozy coaster, too, and happy with their own shopping finds. Likewise with Grace, Ofel, Vicky, Michelle.

Ricky has this thing about buying a pair of shoes each time he travels to a foreign country.

Justin bought himself a laptop bag. Robert was thoughtful enough to buy his wife a beautiful blue silk scarf.

Our next trip was set between 5:30 pm and 6:00 pm to get to our last dinner venue. Vicky was saying “I hope they saved the best for last.”

Our friendship has definitely deepened.

Having to ride our cozy coaster for the fourth day helped us get to know one another even more.

Isn’t it that people always say that you get to really know a person once you’ve lived with him or her?

Ofel, my roommate, was outstanding! Our cozy coaster-mates were lovely in laughter and in sharing quietly listening to stories mostly by Eloy and Dave. In the middle of the traffic and the lectures, we were all engrossed with our precious time together, too. With endless catching up as we found ourselves stuck in traffic, Eric said loudly “We are back where we came from!!! We are here at the fountain once again after more than one hour in traffic already!” We were stuck in 2 blocks of traffic and circled the same rotunda! Laughter galore!!!

Thanks to the Durian Pillows from Dr. Abola, it saved us from the long wait to the Lauriat dinner.

It was just sad though that we weren’t able to take our class picture by the fountain, and bid it goodbye. :-( Oh well, maybe next time guys?

Because to go back, we will need another hour to get there and another to leave!

Our Singaporean dinner was definitely a treat. It was a sumptuous meal like no other. Or it could also be that we were all just starving from the traffic jam.

As we finally arrived back to the Gran Melía, it was already close to 10 pm. Justin, Robert, Vicky, Michelle, Ofel and I decided to take a night cap at the lobby lounge with the wonderful music from the 2 female vocalists. Beer was a common drink.

Justin said “As soon as I arrive in Manila tomorrow, I will sit inside my car for one hour in our garage.” – don’t be deceived by his somber, intellectual look. He can say the funniest of statements, really!!!

And as Vicky added “And so we say, traffic in Jakarta taught us to love more thy native land.

Now, I SO LOVE EDSA, I’d rather drive around Metro Manila anytime of the day.”

As we drank our beers away, Justin all of a sudden pops a question “What does PROJANA mean? Or what does PROJANA stand for?”

Talk about delayed reaction … it must be a combination of being inside our cozy coaster and the grueling traffic!

We called it a night almost at 1 am. No one remembers answering Justin.

Day 4 Our room phone rings at 5:00 am. I got worried it would awaken Ofel so I picked it up right away and heard a chirpy yet deep and hallow voice of Joel … “Good morning, Taimy! What time is breakfast? What time do we need to get on our cozy coaster?” Doesn’t anyone read our hard copies of itinerary?!

Breakfast to me was not only to break bread together but to make our friendship grow. Then off we went for our city tour and to Sumatra. The Monas Tower tour, if you want further historical details, info, ask Michelle.

The SBEP class marched under the scorching sun to fall in line with a huge bunch of elementary students also getting their chance

to climb up the tower. For me, what we did had some semblance of doing the Death March and trying to go up the Mount Samat Cross in Bataan.

We went quarter round the park to catch our cozy coaster and, hey guys, it felt like home! The tour was like a tour at the Quezon Memorial Circle! I loved the historical dioramas! And then we were wowed to see Indonesia Miniature Park - How I wish our Nayong Pilipino would be as grandiose.

Our last minute shopping was at the ITC Cempaka Mall. Dr Antonio laid in 3 seats to take a rest. He never left our side. He never left us alone except for the karaoke dinner. I would always watch him in awe all throughout our Jakarta journey. He smiled at us with no complaints. Sat with us and broke bread with us like he was fine.

SBEP2013 is more than honored to have had him with us most especially in our Jakarta trip. Dr Antonio is one brave soldier, indeed. We ended our day with a Holy Mass. And as I would always say, interfaith, no matter what is good for the soul.

Day 5 Ahh, our life here in Jakarta is about to end. After our last lavish breakfast at the Gran Melía, I took photos of its ornate marble and mother of pearl.

This is one memorable place for me.

As we boarded our cozy coaster, we were given our packed chicken and rice meal as our adieu. We shared a lot of food with Syawal and other airport janitors as our gesture of sharing and giving. It is one common value of SBEP2013.

SBEP Class 2013 is very fond of posing for a class picture. One signature pose, for 30 cameras. One, Two, Ready, Wacky? I said Wacky!

Weng, do we have any wacky shot?

Time in Jakarta felt longer and slower (as it is 1-hour behind Manila time). Yet in 6 days, we didn’t have enough time to tour or shop around, or explore around town. How painstaking it was to get a Bluebird Taxi, well, ask Edward and Bobby about their city adventures! Bongbong can narrate about his almost two-hour foot trek from the fountain rotunda to Gran Melía with his GPS navigator.

Yes, it was a long trip away from our usual office work, 6 days away from our families and friends. The long warm, humid days; the long cozy coaster-rides to catch dinner, the late night meetings and early morning assemblies— somehow it was the week we’ve bound ourselves together, learned and taught each other; gained new friends (and their wonderful wives). We entertained each other even to the corniest of jokes from desperation. We became one big family even for just a week; a group of fun, intelligent, diverse, talented and inspiring people.

As for the rating? Let me end this with what Gen. Eric Javier said to me when I was just about to give up on joining the next cozy coaster ride for dinner, “It is all worth it!”

The kindred souls of SBEP2013 will be a lifetime of friendship. Jakarta definitely sealed it.

We can battle wars and weather rough storms together! See you around! sbep magazine 2013

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seminar

Stock Market Trading

T

he SBEP was pleased to offer a training seminar on ‘Stock Market Trading’ last May 3, 2013 at the Case Room 2 of UA&P. It was attended by 17 senior executives from local and multinational companies in the country.

The seminar was conducted by Mr. Alexander N. Gilles. He is a Certified Financial Analyst with a Masters Degree in Applied Business Economics from UA&P. He is a lecturer on the “Certified Securities Representative Course” leading to a stockbroker qualifying exam,

by The Securities and Exchange Commission. He is currently a consultant at First Metro Securities Brokerage Corporation. Mr. Gilles is also the author of the book, “Guide to Entrepreneurship” (2005).

The following topics were covered: (1) basic rules of savings and investment; (2) fundamental behavior of stocks and stock markets; (3) economic factors, company-specific factors, and international capital flows; (4) how to buy stocks and funds online; (5) how to design a trading plan; (6) how to increase the odds of success via technical analysis; and (7) how to forecast company earnings and share price movements.

Hands-on exercises and case studies were given for practical and immediate learning.

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THE philippines GETS AN investment grade RATING

The lecturer further discussed ‘How to Trade Stocks,’ the principle of ‘Buy Low and Sell High,’ – looking at the promise and the potential, and all the risks involved. Then, a brief discussion on the ‘Principles of Good Trading’ followed – selecting a prudent entry price and determining an exit price.

Mr. Gilles also emphasized ‘How to Discern Trends via Economic Trends,’ like trends in financial data – how they give a preview into the future behavior of stock prices; about detecting hints of a rally or advance warnings of a drop in share prices.

This was followed by his lecture on the ‘Invisible Trend’ (the forecasts for economics and business) that affects stock prices.

The seminar on Stock Market Trading is being offered by the SBEP bi-annually – in May and November. The course is designed for all those interested in the stock market (with or without background in Finance) and for players in the Philippine Stock Market and the securities industry.

For the next seminar schedule, please contact the SBEP Alumni Office by email at sbep@uap.asia or by phone at 6342820 / 6343095 / 6370912 loc. 222. (Alonica R. Salazar)

SBEP kapihan

1.

SBEP Kapihan T

he SBEP Alumni Office organized a Kapihan last June 6, 2013 at UA&P’s Dining Hall. It was attended by 29 alumni represented by the different SBEP batches. The host batch for the Kapihan session was Class 2012. The guest speaker was Mr. Bienvenido P. Nito, SBEP alumnus (Class 1997) and Head of the Social Economics Unit of the School of Economics of UA&P. Mr. Nito gave a short briefing on the “Proposed Policy Reforms on the Health, Education, and Water Sectors.”

The objective of the Kapihan is three-fold: To bring back the SBEP alumni to UA&P – All alumni from Class 1975 to 2013 are encouraged to attend the Kapihan. This will be a quarterly reunion for the SBEP alumni and their guests.

2. To get first-hand updates on what’s happening in the economy and the business environment

– An invited guest speaker will start the Kapihan with an informal / short briefing on pressing economic issues and their impact on the business sector. The attendees can freely join the interactive discussion while having breakfast and coffee.

– Other UA&P economists, professors, alumni and distinguished guests from the government and private sector will be invited as speakers.

3. To provide a venue for networking with fellow senior executives on a quarterly basis.

The invitation to the next Kapihan session will be sent to all alumni through email. The SBEP alumni may bring a guest(s) to the Kapihan. Registration is for free. The only cost to the attendee is breakfast.

For more inquiries on our quarterly Kapihan, please get in touch with Ms. Tata Salazar, marketing and alumni affairs manager, or with Ms. Lea Riñon, marketing and alumni affairs coordinator, by email at sbep@uap.asia or by phone at 634-2820 / 634-3095 / 637-0912 loc.

222.

It’s time to be updated and re-connected! Be part of the SBEPAlumni Loop!

SBEP Alumni Association As a member of the SBEP Alumni Association, you are entitled to the following privileges: 1.

2.

3.

4.

5.

20% discount on all SBEP Financial Seminars Copy of the SBEP Annual Alumni Magazine (to be sent by mail) Unlimited access to the UA&P Graduate School Library SBEP Alumni ID card (to be sent by mail) Copy of the Market Call (to be sent by mail every quarter) – a publication of First Metro Investment Corporation (FMIC) and UA&P Capital Markets Research Group. This highly informative newsletter gives you the current standing and a thorough analysis of the workings of our macroeconomy and the capital markets.

For those interested to join, please submit the following requirements:

– Accomplished Alumni Data Form

– One (1) piece 1x1 picture (preferably white background)

– Annual membership fee of PhP1,500.00 (check should be payable to the UA&P-SBEP Alumni Association, Inc.) For any SBEP Alumni concerns, please call our office at 6370912 to 28 loc. 222, 6343095 or email us at sbep@uap.asia

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THE philippines GETS AN investment grade RATING

Strategic Business Economics Program Your Executive Edge!

“The ability to execute is useless if the business strategy is badly grounded.

With SBEP, I am much better equipped to deal with issues that stare me in the face everyday.”

– Joey A. Bermudez

SBEP 2004 President and CEO Philippine Veterans Bank

“SBEP makes me understand the contribution of our industry to the economy of the country.

It elevates my awareness in our responsibility to the nation.”

– Chandramogan Anamirtham

STRATEGIC BUSINESS ECONOMICS PROGRAM

SBEP 2013 President and General Manager HGST Philippines Corporation

Designed for top senior executives, entrepreneurs, ambassadors, expatriates, professionals, and top government officials. Be part of a great tradition and a network of executives in an atmosphere of academic excellence and real business applications.

“Being part of the SBEP has been a family tradition. My brothers and sisters have

taken the SBEP. We LOOK forward to continue this timetested mutually beneficial relationship”

– Isidro A. Consunji SBEP 1982 President DMCI Holdings, Inc.