By Digoy Fernandez

ONE of the things I have to promise myself is never to make promises I can’t very well keep. In my last post, I mentioned the sloppy service of a restaurant in an upscale restaurant in a tony Alabang mall. Well, my dear son who is my veritable shadow when it comes to wonderful shared experiences like watching movies and eating — not expensive meals in posh restaurants, just good food in tried and tested venues — decided that he wanted to try a particular dish that happened to be available in the restaurant I said I would avoid until hell freezes over. Famous last words!

So, we hunkered over to Gerry’s Grill in Alabang Town Center (I mention them now because of subsequent events that happened in this visit) and — Surprise! Surprise! — a waitress saw us right away and proceeded to seat us at a table. This was 100 percent better than my last visit when I basically got ignored after trying twice to get seated or served, and was left to my own devices for about 15 minutes each time. We were seated and handed menus, and then, almost predictably, saw the waiters and waitresses just lolling around avoiding eye contact. Apparently, they want you to stand up and gesticulate wildly before they come over to serve you or take your order. At any rate, I finally had to wave my hand at one of them — not without vigorous encouragement and mild disapproval from my son, though. Our orders were taken and we settled down for what we hoped would be a nice lunch.

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By Digoy Fernandez

THE news that a leading international bank — OK, its Citi — will knock off more than 50,000 jobs did not excite the markets, but it raises the specter of diminishing service in a service-oriented industry. I remember all too vividly arguing with a very rude Citi rep a few years ago — probably one from their call center — and recounting this to one of my classmates who was a former high ranking executive of the bank. He agreed that the service of the bank had gone down tremendously. The net effect of all this is that, after I mentioned the incident to my family and friends, they all resolved to bring their banking business elsewhere.

We talk about outsourcing here in the country as if it will be a panacea for all our economic woes. True, employment in this sector is expected to be more stable than most as international companies shed staff and outsource certain functions to firms like those found in this country. But outsourcing can only go so far. The news today about additional woes in Quantas — an airline that had once been proud of its service history — as yet another plane suffered from a failure in one of its systems. The sudden increase in incidents in this airline are said to be traceable to its having outsourced the maintenance function. This is not a wrong move, per se, but an airline certainly cannot take chances that something will go terribly wrong with one of its airplanes as it coasts at 30,000 feet above sea level.

The TV program Air Crash Investigation has highlighted the danger to a plane if one little part gives way, or if a plane passes cursory inspection only to fall from the sky because of something the mechanic forgot to do. One airline that they featured had taken shortcuts in their maintenance schedule by maximizing the length of time between mandatory service schedules, and an air crash was the result. That is why I look apprehensively at any airline that publishes many flights on any given day, and, after considering the number of aircraft that they have available for flight, come to the conclusion that someone is short-circuiting maintenance schedules.

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By Digoy Fernandez

IN the typical Western corporate setting, the initial reflex action in severe downturns like what we are beginning to go through is to lay off staff, close down plants, and cut both expenses and benefits in an effort to pare down costs. Of course, if one multiplies this action thousands of times over as companies across the international spectrum tighten their collective belts, the more pernicious effects of a severe recession become like a self-fulfilling prophecy. The more people lain off and plants closed result in lower spending power all over the world’s markets, making the downward spiral not only inevitable but also longer lasting. There was a trigger, to be sure, and this was the debacle in the sub-prime housing loans and the discovery of crappy credit swap default loans in the portfolio of many an otherwise respectable financial institution. But the period of fault finding is over. Now is the time to think positive to get ourselves going, even if the economy is headed the opposite direction.

With the loss of jobs coming along like a tidal wave, it boggles one to attempt to visualize the effect this will have on consumer spending, the subsequent decline in production, the ejection of families from their homes, and a general sense of malaise. What is one to do then, when faced with an unpalatable situation such as this one?

In our country where the family system remains alive, it is easy to think of a dispossessed family moving back into the parents’ household, or being given the use of an underutilized asset. Not so in many Western countries where homeless or church shelters often provide the only possible fallback for a family that hits bottom. At the very least, in the more socialized economies, there will always be welfare to lean on…but even this is not a bottomless fund and many governments may prove reluctant to support an army of dispossessed people who will not be able to find work.

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By Digoy Fernandez

THIS blog is inspired by a lament from one of my relatives who sent us an email wherein she stated her frustration at the huge decline in the values of country-issued bonds, like those of the ROP for example.

In a normal market situation, conservative investors find solace in long term bonds, or issues like second tier capital requirements of well known banks. This is no longer a normal world, nor are the financial and capital markets behaving normally in the sense that we have known them to be.

Consider therefore, a corporation that dutifully set aside its contributions to a pension and health plan for its employees. It is a safe bet to make that, unless the monies in the fund were invested in super secure and bullet-proof assets, that one would find a serious decline in said pension fund (and in most others besides).

Is there really such a thing as a bulletproof investment these days? Probably not. But it pays to know ones fundamentals and limit oneself to going for the safest investment alternatives that your financial planner can suggest. Most derivatives would certainly be thrown out of the window. Country bonds? Only if you are in for the long haul and will not choke at seeing the lower redemption rates that are prevailing in the markets today. Long term deposits? Only if your bank(s) is/are doing their job conservatively and not taking long positions on risky assets.

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By Digoy Fernandez

ONE of the unintended casualties of the present financial crisis is the temporary sidelining of the Global Warming debate from front and center in the attention of the world and its leaders. While understandable, we hope that the world will not lose focus on this very important aspect of our survival as a species on this planet.

The falling price of crude oil is welcome, of course. But it may also deflect efforts aimed at conceptualizing and bringing to actual production various alternative fuels and their respective machinery. Low crude prices should not tempt car manufacturers, for example, to keep on producing gas guzzling SUVs, but make them realize that the reprieve may be temporary. In this era of difficult funding and credit, we hope that enough wise financial institutions and foundations find the motivation to support the development of alternative fuels and machines that use them.

On the other hand, one unintended beneficiary of the decline in global economic activity and production may be the ability of the planet to regenerate itself. Hopefully, less harmful economic and personal activity would mean less greenhouse gases produced, and a chance to make up for lost time in the battle to clean our air.

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