The return of So What, Chocnut?

Weekly “So What, Chocnut” entries didn’t work. First, those news articles are already history by the time Friday rolls along and second, it’s hard to consolidate one week of business stories you shouldn’t miss in one post. So starting today, “So What, Chocnut” will be posted daily, in small snippets that busy MoneySmarts readers can easily digest. (I’ll try, I really will.) Here are the business headlines relevant to Personal Finance watchers: In the Philippine Daily Inquirer today, Socioeconomic Planning Secretary Romulo Neri said the peso is now “uncomfortably strong” and urged the government to support the export sector. Did I miss something? Neri is urging the government? But he IS the government. He is the planning chief, for goodness’ sake! I have covered quite a few planning chiefs in my time. Neri is the only one with a multiple personality. Some things in this country are really strange, even for me. A few notes on reading business stories on the peso. The words “strong” peso, “appreciation” of the peso all mean one dollar can be exchanged for lesser pesos. “Weaker” and “depreciation” is the opposite and this is what dollar earners (like exporters, OFWs) out there want to happen. As we speak, Filipinos across the world are starting to have dialogues with their employers on their compensation packages. Some companies may adjust, some will not. The weakness of the dollar is a global phenomenon. It’s a zero-sum game. There will be losers in this trend, and there will be winners. I sure hope no one will call on the Bangko Sentral ng Pilipinas to intervene in the market to stop the peso from appreciating further. Puhleese! That is so 1996. The story “15 insurance firms up for suspension” made my eyes pop out. Scary for personal finance watchers, who know very well that it is imperative for insurance companies to stay strong and healthy, because expensive policies can turn into useless slips of paper by the time benefits are claimed. The list of insurance companies that may lose their licenses due to inability to reach the capitalization requirements of the Insurance Commission includes Generali Pilipinas Assurance, a life insurance company, and 14 nonlife insurance firms namely Asia United Insurance Inc., Covenant Assurance Co. Inc., Easterns Assurance & Surety Corp., Finman General Assurance Corp., First Integrated Bonding & Insurance Insurance Co. Inc., Generali Pilipinas Insurance Co. Inc., Investors Assurance Corp., Manila Insurance Co. Inc., Meridian Assurance Corp., Monarch Insurance Co. Inc., Oriental Assurance Corp., Solid Guaranty Inc., Summit Guaranty & Insurance Co. Inc. and Travellers Insurance & Surety Corp. IC chief Evangeline Escobillo is out of the country, but Generali Pilipinas Assurance emailed an official statement that says the required capital infusion is already in an escrow account in Banco De Oro. Figures from that statement said it is actually over-capitalized at P1.9 billion, including the account in escrow. However, Bangko Sentral requires Banco de Oro, one of the majority stakeholders of Generali, to be given additional preferred shares in the company in exchange for the capital infusion. Generali will have to change its charter to do that, something that will likely take the SEC one year to approve. (If you want to read the full statement, click Generali Official Statement.) By the way, Generali Assurance Pilipinas, as well as non-life arm Generali Pilipinas Insurance Co. Inc., is 40-percent owned by Henry Sy’s BDO. Its foreign partner is Generali Asia, a joint venture between the Kuok Group and Generali Italy. For interest rate watchers, you need to read “BSP rules out monetary tightening anytime soon”. For stock market punters, I mean investors, news that combined profit of listed firms in 2006 went up 27.5% to P261B should be another reason to rejoice, although things might not be too hot in the next couple of days because the market seen to take a break. That’s all for now, folks.