The Morning Eclipse

Monday, February 26, 2007

My 12 Senator Forecast

After running through the 80 something candidates for this 2007 Senatorial elections, here is my calculated guess. They are in no particular order.

1. Chiz Escudero
A very public official and leader of the Opposition at the lower chamber. He has a daily radio show at DZMM and strikes a chord with the public. He's a very charismatic speaker and is capable of getting his message across to the voters. It also helps that he looks like the Bamboo lead singer.

2. Loren Legarda
A very admired legislator during her tenure at the Senate. She lost to Noli during the recent Vice presidential elections but her popularity can still get her a Senate seat. She has a reputation as a clean and hard working official. Her ex-husband is now being charged with murder.

3. Noynoy Aquino
With the opposition being badgered by the very solid administration, who can resist voting for Ninoy's son? His father got elected during the oppression of Martial Law and now the similarities will bring him the Senate.

4. Prospero Pichay
A very good supporter of the President. He has come out several times to the media to defend the Madame. He is also more widely heard and seen by the people. His personality and demeanor reminds one of the common people. It also helps that he has name recall thanks to his vegetable-sounding name.

5. Peter Cayetano
All his efforts to target the First Gentleman wasn't foolish after all. This got him big big media attention and daily newspaper exposure. He has even surpassed Chiz Escudero in public appearances thanks to his continuous expose on the First Family's private German bank accounts. With the First Gentleman attacking in his latest salvo, this has just rocketed the Opposition congressman's popularity as a corruption-fighting, honest and with-the-people politician.

6. Kiko Pangilinan
Mr. Sharon Cuneta. Need I say more? He will win thanks to his immensely popular actress-wife. He won before, why not again?

7. Mike Defensor
He's the ardent defender of the President and member of her inner inner circle. He is also very media savvy and constantly expresses his opinions on various issues especially in defense of the President. He has done the correct moves during his rescue mission at the Bicol disaster. He is young, smart and popular. Mike is the anti-thesis of Chiz. He will win. Oh and did I mention he is with the Administration.

8. Manny Villar
Rich and shrewd. This successful businessman rocketed to the Senate Presidency in less than a decade. He started out as the Paranaque Mayor and had since then never looked back. He is now recognized as a third force with allegiance neither to the Administration nor the Opposition. He is more in-sync with the middle class and is known as a hard working and fair politician. He is the future president of the Philippines.

9. Panfilo Lacson
The former PNP chief will win with his strong anti-corruption platform and crime-fighting repuation. He has the support of the Filipino-chinese community thanks to his successful anti-kidnapping efforts during the Estrada administration. He is well funded and clean.

10. Joker Arroyo
He gained popularity during the impeachment trial of Erap as one of the congressman prosecutors. He regularly tops the most thrifty senators list and is recognized as a serious, hardworking and clean official. He can also be regularly seen on TV expressing his opinions on various issues of the land.

11. Caesar Montano
Star power. He is a very popular movie actor and director. Recently he just won a best actor award for his 2006 Metro Manila Filmfest entry.

12. Ed Angara
This old tiger knows the ins and outs of Philippine politics. He is the former Opposition leader of the Senate during Ramos' time. Experienced and backed by a well oiled political machinery, Ed Angara is sure to win a seat.

Success is 1% inspiration and 99% perspiration. Never tire.


Thursday, February 22, 2007

A political party can help a lot

In our very personality-based elections, it is very unfamiliar to encounter strong political parties. It is furthermore less known how this parties help the candidates.

I will use the American political party system to highlight the benefits of these groups.

1. A party has the right connections

A political party may be older than the candidate himself. With its platform and regular stands on certain issues, the group has already collected a base that can support its candidates financially. It is far easier to raise election war chests through party friends than doing it alone.

2. A party has the grassroots network

An established party like the Democrats already has field offices from the national level down to the town level. These offices have records of Democrat supporters and are regulary conducted political rallies that will help support the party in any upcoming election.

The people in these small offices are the voters' neighbors and even childhood friends. This makes it far easier to campaign for a candidate. The enthusiasm for a platform or candidate is expressed and shared on a very personal level. This greatly helps any campaign.

3. A party has the equipment and logistics support

In any election, what matters is the vote and on Election Day, a political party will do all it can to bring in the desired results. In America, parties shuttle their supporters or even late voters to election precincts just to get the votes. Each vote counts as they say. Such setup requires cars, buses, communication equipment and information systems that only a well-funded organization can muster.

4. A party has young and eager volunteers

Lastly, poll watching is essential. How much can a candidate bear to cover poll watchers' pay? On the other hand, strong political parties already have regular recruitments of party volunteers. These are the young, mostly college, students who just want to share their time and effort for a cause. They are the best poll watchers. All you have to do is just feed them.


A strong polical party offers many benefits to a candidate. A candidate gets to use the politcal machinery of the party and project himself throughout his campaign. It is then unfortunate that we do not have this system in place.

Success is 1% inspiration and 99% perspiration. Never tire.


Wednesday, February 21, 2007

Computerization is just a waste of time

Yes it is because Information Technology is about bringing valuable information to the decision maker at the right time and at the right moment. Computerization on the other hand is simply like robotizing your factory without any good plans.

What's the difference anyway?

1. Business softwares are information systems. These are systems that accept input, process data, and give out helpful information.

2. Computerization is just recording unto the computer what was formerly recorded on paper.

Which is better?

Of course Information Systems are better. A good example is that of a Customer Relationship Management (CRM) software. This software records each lead you get. Any customer that expresses interest in buying your product is tediously recorded into the software. After a few days, you can then run through the list and do follow-ups on those interested parties. For long negotiations, you will be able to tap into the records and see the progress of any particular lead.

This software is a godsent for companies that are aggressive in their sales initiatives. Companies usually deal with hundreds of leads and trying to make sense of each lead is impossible. The software can then present the records in ways that are meaningful like having "Most possible leads", "Most high-value leads" or "Best-selling products". These lists will focus the sales manager's attention to the big picture and help him make good decisions. With such help, the manager can opt to target the recurrent customers or even push for the best-selling products rather than waste his efforts on the non-moving items.

Choose your software carefully.

Now, don't just rush to implement a CRM or inventory system overnight. Remember, software will just emulate a process being done by the company. Once you've finished the code, the system or process will be pegged. There will be limited flexiblity for changing the process once a software is being used.

If for some reason you suddenly decide to change your system, your investment in your present IT system may be lost and another round of software acquisition will happen.

Be careful and study your business processes well. If you are sure that the software design reflects the actual physical process and there's ample room for future changes then this system will greatly enhance your operations.


1. Hire a good Systems Analyst and have him design the software very well. After, hire a good programmer who will encode the design.

Software is like construction. You need a good architect to visualize and design your building and you also need a good carpenter to actualize the physical building.

Success is 1% inspiration and 99% perspiration. Never tire.


Friday, February 09, 2007

We have underdeveloped equity market

After canvassing for other equity fund managers, I have discovered that it is not good at all to invest directly or indirectly in the stock market.

UITF's may not be worth it

1. Equity funds from the banks have management fees of 0.50 (BDO) to 1.50% (BPI) per annum. Plus they charge you another 0.50% if you cash out before the agreed upon holding period.

This is outrageous. This is the investor's money and the bank is hijacking it and even charging you for moving your funds.

If you go direct to a stock broker and manage your own portfolio, you'll just get charged the usual 0.50% fee. No holding period.

2. UITF's trading is very unfair for the everyday trader. The banks will inform you that trading time is between 9am to 12pm. This is no problem. It means you can buy or sell your UITF units during this time.

The problem is you will not know at what value you will buy or sell. This happens because when you buy/ sell at 10am, your base price will come out only by 12pm and not the price at 10am. At first you may think this is okay. You'll say to yourself that you'll just buy in the afternoon BUT remember, this is not allowed. It is practically gambling!

The stock broker meanwhile is just a call away! Tell him at what price you want to sell and if there's a buyer, your sale is done. This can be done during trading hours at your price.

Market is too small

1. Philippine Stock Market is too small. Unlike the US stock markets, here there is no ready market. The amount of money involved in the daily trading is so small that some index stocks don't even change prices. These are already index stocks!

This means that the traditional advise of "buy when the market crashes and sell when the market is in the upswing" will not work perfectly here. You may end up with worthless stocks for a couple of years. The upswing will not come unless foreign investors start buying local stocks- just like today.

Why speculate in the stock market if your returns will not immediately be realized?

1. Stick to doing business to increase your income and cash.

2. Ride the bull market if you want but never be too greedy to sell when you've gained.

Success is 1% inspiration and 99% perspiration. Never tire.


Wednesday, February 07, 2007

Bonds, Mutual funds, UITF's and Equity markets

Here's an explanation on the various investment instruments that a person can use. I draw these explanations from my experience with them.

I. Funds

These are generally pooled money handled by an individual, fund manager, group, bank, or company. What the company does is to pool small tranches of investments and make a big pool of cash amounting to maybe tens of millions of Pesos. The money is then invested in the highly volatile stock market. This is an exciting investment for those in their 20s and 30s.

How small then is one tranche?

These institutions usually have a minimum investment value of 25,000 to 50,000 Pesos. BPI has the 50,000 minimum investment requirement.

Why pool them together?

There are two reasons for pooling moeny together. First, to buy stocks or equities (These are synonyms by the way.) in the stock market, you'll have to meet the minimum quantity. Sometimes these minimum quantities reach 10,000 Pesos just for a certain stock. Your 50,000 Pesos then will not really get to be exposed to all the good stocks and if you're unfortunate, you may have bought a stock that will plunge way way down in price.

Second reason. With the pooled money, the institution can hire professional, experienced portfolio managers. They are the insiders in the industry. They know the trend of the stock prices, and the expected outcomes of good news and bad news. Sometimes, they may also know of some inside information that may help the manager choose the correct stock to buy. At least here, the expensive pay of the managers is spread over hundreds of investors.

Portfolio is the term we call for a set of stocks that a person is tracking, or investing in.

Insider trading which uses privileged information is illegal. This privileged information is so helpful that knowing this will surely push an investor to buy or sell a certain stock. Martha Stewart did this and earned millions but she got caught and had to pay and serve a sentence.

How volatile is the stock market?

The stock market is very volatile. With 50,000 Pesos, you may earn or lose 4,000 Pesos in a matter of 3 hours.

Is there a guaranteed return?

NO. This is not a bank deposit. You may earn or lose money. Just learn when to cash out and when to reinvest into the fund. It is all about timing. Buy when the market is down and sell when the market is up.

II. Equity funds, balanced funds, bond funds, mutual funds

These are different kinds of fund categories. When you invest in the stock market, it is called equity funds. When you invest in a basekt of government securities and stocks, this is balanced fund. When you invest in funds dedicated to government bonds and other bonds, this is bond fund.

These funds are usually handled by private companies. The SEC monitors these privately managed funds.

III. Unit Investment Trust Funds (UITF)

This is a kind of Fund. This is handled purely by banks and is monitored by the Bangko Sentral ng Pilipinas. As of three years ago, the Bangko Sentral has implemented international standards in fund management. Before that, it was up to the bank's portfolio managers to systemize their investing.

UITF's are formerly called common trust funds (CTF).

IV. Bonds

Bonds are loans from an institution. Bonds usually range from 6 months to a few years. Governments and big companies issue this bonds to raise cash. They will pay interest for the duration of the bond period. Returns here are usually better than bank deposits.

Usually, an individual will not have direct access to the bond market. Bond offerings are worth tens of millions of Pesos and the small investor can't afford this. The way to get access to this is through the UITFs or Funds.

V. Treasury bills

Treasury bills work similarly to bonds but they are more short term. They range from 3 months to 12 months. Returns here are smaller compared to bonds but are better than bank deposits.

Again, the easiest way to invest in treasury bills is through UITFs or Funds. Treasury bills are also worth tens of millions of Pesos and the government usually sells wholesale. However the Bangko Sentral, from time to time, does offer Retail Treasury Bills (RTB) worth 5,000 Pesos each. You'll have to look for specific banks that sell these RTBs. Not all banks offer this instrument.

Success is 1% inspiration and 99% perspiration. Never tire.