There’s no official statement yet from Philamlife, but AIG issued a late advisory that it will no longer sell its crown jewels including the local office. Read the story here.

I am almost disappointed. Consolidation is always good for any industry. A sale to BPI, BDO or some other big player could only push the others to offer the public with better products.

The flipside is that the sale might put pressure on the buying entity to recover its investments, and this could mean dividends originally meant for policyholders could be lessened. Would a need to repatriate earnings to AIG have the same effect? I guess we will soon see.
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Last Saturday, the moment of truth arrived for my eldest daughter: it was time to get her school card for the third quarter. As my eyes skimmed over her grades, I fought the urge to be the perfectionist, the slave-driver mom, the one who pushes and pushes “to do your best.”

Can a single figure summarize all the effort that go into learning or doing something? I’m sure the answer is different for various things, but inevitably, we rely on measurements for performance, whether at school, at work, in life and most especially when it comes to investing.

People often interchange yield and return when talking about how investments perform. They are not the same, and if you look at resources around the web, not everybody defines them the same way, too.
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Here’s my roundup, which should have been uploaded last Saturday. Sorry for the delay.

By now, you probably know that job losses and news of more firms shutting down intensified last week, and we might not like it, but you’ll see more of the same in the coming months.

There’s no use cursing the gods. Better use your time wisely by thinking of ways to keep your jobs, and if that’s not possible, prepare using the mantra we have been repeating over and over again. Save more; spend less. Build up your emergency fund. Postpone major expenses if possible. One more thing: financial tension is most often the cause for marital troubles. So keep your job, but if not, remember to keep your spouse!
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Sometimes, I wonder when the global financial crunch will no longer be in the headlines…or when a day will pass when we won’t talk about it…or when it won’t be a constant worry anymore.

Just yesterday, I heard that Accenture met with its employees and told 1,000 of them they don’t have to come to work anymore. Just like that. At least two people I personally know were also laid off last week by their company.

You know this would be happening this year. But it doesn’t get more real than when the ax falls on people you know. Heaven forbid one of you gets laid off.
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My apologies for not posting my news roundup last Saturday. Here it is, finally, including some developments today that point to trends in the economy.

Personal Finance

My sincerest thanks to you guys for making the Personal Finance section a hit among INQUIRER.net readers. I heard that some readers who would normally not read the Business Section at all do so because they find personal finance to be practical and useful.

My editor-in-chief once asked me why I chose to write about personal finance and I replied with a laugh that I had been merely typecast. I realize though that it’s the chance to change lives that makes personal finance for me very fulfilling.

Enough of the speech. Sniff.

Hope you like my article “Top personal finance lessons for 2008” as a yearender sort of thing. There are also tips on how to “Buy a house amidst a crisis” and how those with cash should consider next year a good time to buy one. Our Take Charge of Your Money article has a timely “On shopping wisely” article for those still doing their Christmas shopping.

There’s an 11-day holiday in the offing but if you need to work on some of those days, make sure your company pays you well. Here’s our guide: Pay rules for long holidays.

Here’s an interesting crisis-related development. Divorce rates in the United States have gone down because couples realize its cheaper to stay together. Heh. Interesting? Read more here: Hitched to the economy.

Macroeconomy

Economic data that came in last week about the economy showed we weren’t pummeled (yet) by the crisis. The peso last week touched P46.90 to a dollar because of the Fed’s historic decision to cut rates to zero, and we know that there will always be winners and losers regarding peso fluctuations.

The central bank responded by cutting rates by 50 basis points and that means you’ll see money getting cheaper and interest rates on loans going down even more. Next year, there might even be more rate cuts as the outlook for inflation gets rosier. The Bangko Sentral ng Pilipinas now expects price increases to be even tamer at 9.4 percent for the entire year or the lower end of its target range. If you are curious whether making money cheap will soften the economic landing for all of us, read Cielito F. Habito’s “Will easy money work.”

It’s not clear whether NEDA director general Ralph Recto already inputted the central bank rate cuts in his 4.6 percent prediction for gross domestic product growth in the fourth quarter. He is also talking about a P300-billion sustainability plan to help the economy move along. He didn’t say if this is new money and how the government will raise the amount, or just a re-packaging of the budget.

Other macroeconomic signs still point to a clear sky despite more gloomy talk about a total global economic meltdown, this time by Spain’s central bank governor Miguel Angel Fernandez Ordonez. Remittances as of October still grew 15 percent at P14 billion and while the month of October alone showed a sharp slowdown, the Bangko Sentral ng Pilipinas believes the growth will stay at 15 percent for the whole year given that Filipino expats send more during the Christmas holidays.

Remember that last year, analysts said remittances will slow down because of the crisis and it didn’t? It appears that the Filipino culture surprised most of these foreign economists. Come what may, we find ways to send what our families need. We will see this time what happens with the possibilities of layoffs across the globe. Locally, however, the jobless rate was still at 6.8 percent in October and the balance of payments swung into a surplus in November of $19 million. No wonder one of the most respected businessmen in the Philippine economy, Jaime Augusto Zobel de Ayala remains bullish on Philippine prospects.

Banking and Investing

The saga of rural bank failures continued last week. BSP is investigating 9 rural banks for “unsafe and unsound” banking practices and now politicians, as always eager to get in on any chest-beating discussion, would like to investigate as well. Here is the list of the rural banks to be investigated: Dynamic Bank, Rural Bank of San Jose, San Pablo City Development Bank, Rural Bank of Paranaque, Rural Bank of Bais, First Interstate Bank, Pilipino Rural Bank, Bank of East Asia, and Philippine Countryside Rural Bank.

Another corporate drama last week came to a head when PSE suspended trading of Meralco shares. Dig deeper through the legal brouhaha and you’ll find that this put a monkey wrench on government financial institutions’ plan to sell its Meralco shares to San Miguel Corp.

Meanwhile, we have Gotianun’s East West Bank winning the bid for Philam Savings Bank. The bigger question, however, is who will bag the insurance business deal? The answer will all depend on the valuation of the company. I heard that Philamlife is too expensive for many of its suitors.

Investing-wise, San Miguel Corp., the country’s biggest food and beverage conglomerate, is preparing for a $1-billion preferred stock offer for next year for its acquisitions.

Corporate news:

For those who are constantly looking for air travel options, you might be interested to know that Dragonair has launched Manila-HK flights, but that the Texas Instruments plant has retired 400 people, listed firms’ third-quarter profits are down 20% and bank lending growth has slowed down in October.

These storm clouds mar what appears to be a clear economic sky and give some signs of the difficult road ahead for everyone as the crisis takes a bigger toll on the economy.

From the blogosphere:

I found an interesting piece from Soul who is ranting about bad customer service here. I find that while we don’t have to be shrews when complaining (customer service representatives are people too!), too many Filipinos are too shy to complain even when we deserve to be heard.

It’s fun to see people in holiday mode. We all should have fun, despite the gloom-talk. We all should have a little bit of a break. We all should enjoy the Christmas parties and the delightful sounds and smells of Christmas. I love the festive spirit!

However, we will enjoy them more when we don’t have a Christmas-party-and-forget-the-financial-responsibilities-of-next-year kind of thinking. So, do shop and enjoy, but know your limits!

Here are the biggest stories of the week:
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Inflation used to be a simple word to understand even for non-economists. After the initial fumble with “consumer price index”, anyone with one year in high school will immediately see why its one of those economic indicators you can’t afford to ignore.

It affects your personal bank account. It’s what Johnny Noe Ravalo so colorfully described as your nest egg’s silent assassin. It makes you think twice about how you spend, how you save and how you invest your money.

Since 2004, in the Philippines, the National Statistics Office decided our lives will be simpler with two kinds of inflation reported in the news: headline inflation (the one we have been used to: the price changes of a basket of goods consumed by most Filipino families) and core inflation.

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IS THE PHILIPPINES truly a sea of economic calm amid so much pain from the global recession? It’s either that or we are experiencing the calm before the storm. Here are my selected readings for this week for those who want to be in the know, but had little time to read the business pages.

Personal Finance

If there is one thing that we all must truly undersand by now is that economic storms will come and they will go, as I have always said. They are a fact of life, so make sure your personal finances are protected against these storms. Making sure your online financial details are protected from fraudsters were a major theme in INQUIRER.net this week.

Stolen credit cards sold online—I didn’t realize just how pervasive this crime is until this article came out. Beware and guard your credit card details!

Guide to safe online shopping—Find out how to shop online safely.

Food and immune boosters—I love the suggestions here. Losing your health is a sure way to have a personal financial shake-up, so stock up on common local vegetables like ampalaya and malunggay, which are immune boosters. I cook malunggay like I cook laing and my kids love it! Let me know if you want a recipe.

10 most common money mistakes—This has been in INQUIRER.net’s most-read and most-emailed list for one whole week, which tells me just how interested people are in what they might be doing wrong with their personal financial management.

Economic News

This week’s economic news indicate the possible storm clouds in the horizon, but several news still point to a softer landing for the Philippines compared with the rest of the world.

Crisis dampens interest in home loans—BPI and PSBank have reported 15% to 20% drop in mortgage lending especially to Filipinos working or living overseas. That means people are either already losing their jobs and are postponing major purchases or are afraid they will do so. The interest rate scenario looks promising, though, for those who believe they have secure cash flows in the coming years. Look at the next article why.

Inflation eases, rate cut eyed—Inflation is now at 9.9%, already at single-digit levels and better than the overall forecast, as food and oil prices continue to slide. Really good news for the depressed times.

Central bank hints at rate cut—The central bank did indeed say there’s “greater monetary policy space” for the Monetary Board (econo-speak for “yeah, we might lower overnight rates in the next meeting”). Since the government is in “economic expansion” mode and inflation is no longer a problem, every economist in town is expecting rates to get cut. I suspect that banks will only be too eager to reduce their lending rates for mortgages and business loans as they run after those who have the financial capability to make good on their loans.

Oil falls $3 to lowest in nearly 4 years—I don’t care much for the oil cartels so as far as I’m concerned, oil prices can go down all the way to $30 per barrel so that consumers will be happy. I do hope, however, that people will not go back to bad driving habits or companies will lose the urgency to develop better alternatives to oil as a source of power just because the commodity is getting cheap again. Oil is dirty. It pollutes the environment and it is not sustainable.

PCCI: P100-B infra fund ready soon—interesting pieces of news, these two articles. PCCI talking about a P100-billion infrastructure fund? Last I checked, it wasn’t a government agency! But PCCI businessmen do see a weakening in the economy next year to 3% and possible job losses or corporate failures.

BPOs plan to hire more agents—fast and furious are the only two words I use to describe how the business process outsourcing industry has grown in the last decade, and they have become another major source of foreign currency for the country, not to mention jobs. With the global financial upheaval, there has been a lot of talk on whether or not it can weather this storm. Big industry players last week have repeated they will hire more agents, and some are even expanding operations. Cross your fingers!

Construction still a big growth driver—if the government will pump-prime the economy, then construction will push growth up. The only problem with construction is the poor quality of jobs in the industry.

How long, how deep is the US recession?—a question on everyone’s minds—and nobody knows the answer.

Investing News

10-month pre-need plan sales down 21%–no surprise here. First, corporate failures in the industry have turned off customers big-time, and second, the cleaning up you would expect in the industry just isn’t happening!

Peso rallies versus the dollar—great news for expat Filipinos out there, especially with Christmas season coming! Who would have thought it would be at P49.08 against the dollar by now? Sige nga

20-year T-bond rate hits 9.5%–long-term yields of government securities, which you can use as benchmark for loans or debt with the same maturity, slide when the economic outlook is good and rise when the economy appears to be shaky. These rates are set when the government auctions government securities (the schedule is found in the Bureau of Treasury website). 20-year Treasury bond rates used to be at 13.88% back in the 2002 but has gone down through the years. Inflation projection for long-term retirement planning is normally at 8%, so a 9.5% rate offers only 1.5 percentage point difference. Not much, if you ask me, but they also offer a stability of return.

Corporate News

Corporate news also dished out more Meralco boardroom drama as if as a parallel story for the De la hoya and Pacquiao fight. This one, however, is no “dream match”, but as you can see, it has become a highly charged topic for corporate watchers and some shareholders are already trying to take advantage of it by snapping up Meralco shares in anticipation of trading gains. Some good reads below:

Battle for control of Meralco looms
Lopezes strengthen hold on power unit
BPI expects bigger profit in ‘09
Century Properties to invest P15B in ‘09

From the web:

Three new articles from my readings around the web:

How to salvage your retirement from CNNMoney shows Walter Updegrave at his best. Making you realize that the news is bad but somehow turning everything into a doable strategy. One is to scale back the retirement lifestyle which is only logical but hard to do for many folks.

Maybe it’s time to buy that first house illustrates why people who have great credit scores can sail through crises and more.

We’re going to party like it’s 1929 is an article I wish I could have written. It’s fun to read.

…gross domestic product grew 4.6% in the third quarter despite all the pessimism, talks of gloom and doom and actual recession in more advanced economies of the US, Japan and European countries.

The figure is in the upper end of the government projection of 4.0% to 4.6%. Still, this is quite a drop from the 31-year peak of 7.2% in 2007. The fourth quarter, although seasonally a good quarter for the economy because of Christmas spending and stuff, might be gloomier if people keep postponing their spending to wait for prices to go lower (like that LCD television that was at P120,000 early this year but is now at P100,000, zero percent interest for 24 months.

So, maybe I should change my tune a little bit and say: hey guys, if you have the money, go shopping to save the economy! Hehe.

***

…some analysts actually believe the bear market is over, stock prices have bottomed out, but that this does not mean the bull is ready to charge. So, as my editor-in-chief JV Rufino asked when I told him about the news, what do you call a market that is neither a bull nor a bear?

***

…if you have investments in the stock market, you belong to less than half of one percent of the total population of the Philippines that are into equities! Citiseconline.com only had 6,000 customers in 2007 and only 15% of them traded at least eight times in a month.

***

…I am starting to believe I am jinxed!

Well, the good news is that a few minutes (yes, minutes) after I blogged about BPI’s online banking service, someone from the bank called me up at home (should I be scared or impressed? honestly, I’m more impressed than worried) and tried to help me with my problems. A few days after, he called me again as promised and told me the account linked to my online banking facility was inactive, hence the error messages. (the phone banker sounded as puzzled as I was by the explanation of their IT guys).  I took note of the instructions he gave and resolved to follow them religiously.

Finally, yesterday, I was ready to look at my account. Lo and behold, I forgot my password and got locked out! (that was totally my fault). So, I called up the 89-100 hotline today and what message did I get? “Ma’am, we are having a problem with our system so can you please call us again in an hour?”

Strangely, I am not really upset. But I think I am so totally jinxed.

***

…when you call an OFW abroad through their phone with roaming capabilities, he pays through the nose just to receive your call and you pay IDD rates on your phone. Ouch!

If you have Globe’s family sim pack, the best way to maximize the entire package is for the OFW to buy another sim with Globe’s telco partner in that country. You can send him a text message for P1, he can reply using text. The two sims used by relatives here can benefit from “unli text plans” but to call home, he should use his co-branded sim.

OneAyala privilege card, by the way, was relaunched today with more benefits! It’s a discount card that’s also an ATM through which Filipino expats abroad (I like the sound of that more than OFW) can use to remit money to the Philippines. Check out some of the noteworthy discounts below (others I did not include were blah):

• “preferential rates” on international and domestic tickets and packages from Fiesta Tours and Travel and discounted rates on passporting and documentation,
• deluxe room at P6,200++ and the Club Room at P8,500++ at Hotel Intercontinental and complimentary one-way transfer from airport to hotel for a minimum of 3 nights stay and 20% discount on all food and beverage outlets
• 10% off on existing rates on Deluxe and Suite rooms at Marriott in Cebu City and 10% discount in all food and beverage outlets
• 5% discount on purchases at Fiesta Mall Duty Free
• Free Hanabishi Rice Cooker for every single-receipt purchase of P15,000 at Abenson
• P200 worth of load for only P160 in Timezone
• one free donut for every dozen bought at Mister Donut
• Free one-year personal accident insurance worth P100,000 for every Ayala Life policy purchased, and
• One free money transfer to the Philippines from anywhere in the world from Xoom.

We received this email yesterday from a reader based in Purono Park, Queensland, Australia:

These people better be smiling when they say things like that. They must be joking. As if we don’t have enough clowns in government. Our relatives in the Philippines are losing their jobs, so we have to send money to help them. Can’t they offer solutions instead of false reassurances? Will they please stop treating us like idiots?

He was reacting to the Philippine Daily Inquirer article “Slowdown, not recession” where cabinet officials explained that the Philippines is likely to show a slowdown in economic growth next year, and not a recession as most top businessmen who took the Makati Business Club survey believe.
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