Be patient - fund managers advise potential investors

By Prinz P. Magtulis (The Philippine Star)

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Private equity investors emphasized yesterday the need for long-term objectives when it comes to placing money in one of Asia’s fastest growing economies as hurdles ranging from the most common infrastructure gaps to tightly family-controlled conglomerates remain. File photo

MANILA, Philippines - If you want to invest in the Philippines, you got to be “patient.”

Private equity investors emphasized yesterday the need for long-term objectives when it comes to placing money in one of Asia’s fastest growing economies as hurdles ranging from the most common infrastructure gaps to tightly family-controlled conglomerates remain.

“Get in! But be patient. (Your) horizon has to be longer term, around 10 years (or more),” said George Drysdale, chairman and chief executive officer of Marsman-Drysdale Group.

“There’s not much of transactional mentality here, they are the kind of long-term oriented. When you come in, you have to understand that,” he said during the forum Philippines 2015: Global Perspective, Local Opportunity in Makati City.

Michael Rodriguez, managing director of Macquarie Infrastructure and Real Assets, agreed, saying, however, this should not stop investors from coming into the country and “expand the level playing field.”

One way to do this is to “partner” with these families for the long term, Brian Hong of CVC Capital Partners, which manages $10 billion in Asia said, but added “dispute and exit mechanisms” should also be in place.

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Anders Stendebakken, managing director of Brummer and Partners, said Filipino perception of foreigners “going in and taking control” will need to change and one way to do that will be to prove that investors are “value added to families.”

There are no immediately available list of all family conglomerates operating in the Philippines, but among the Forbes’ top 1,000 corporations, eight Philippine firms, with market capitalization of $77.5 billion, were included, all of which are family operated.

Shanaka Jayanath Peiris, resident representative of the International Monetary Fund, said the Philippines also needs to attract more foreign investors to address its infrastructure woes.

Rodriguez said this should start from the government, which needs to ensure “quicker” disbursement of funds.

“There are still a lot of systemic inefficiencies and problems. Infrastructure and bureaucratic problems still exist. There needs to be a desire by the government for projects to happen much quicker,” he explained.

Rodriguez, however, said “there has been some results,” especially in terms of public-private partnerships (PPP), where 10 projects worth roughly $5 billion have already been awarded.

Much of the forum also underscored continued opportunities for the Philippines in sectors such as tourism, health care, real estate and financing as part of a growing economy. In terms of raising funds, capital markets serve also a good avenue despite recent volatility.

“When the markets are volatile, the first thing I asked my issuers is, ‘how’s your business growing? Is it still driving in the way you want it to be?’. And so far, the response has been quite positive. Growth is still fairly strong. The fundamental underlying is still strong,” said Reggie Cariaso, capital markets head at BPI Capital Corp.

A New Age for the Philippine Bar Scene

A New Age for the Philippine Bar Scene

By Icy Mariñas, Philippine Star

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There is a rousing energy presently felt in the Philippine bar scene. The Philippines has been turning heads in the international bartending competitions for a few years now. Some of the best bartenders in the world come from the Philippines. This may come as a surprise to you, dear imbibers, but not to passionate personalities in our growing and exciting industry. After all, we have a long, rich history connected to alcohol. From the Spanish, we were taught how to make cerveza or beer. Also, we can’t deny the great influence Americans have had in our culture. They brought the cocktail culture here  (in army bases they had officers’ bars) and most likely taught Filipinos how to make cocktails the way they do. They passed on the skills and knowledge to Pinoy bartenders.

Go Ken!

The Prohibition (from 1919 – 1933) did not extend to the Philippines, thankfully. And of course the Americans living and stationed here during that time were able to take full advantage of that. They introduced us to the cocktail club and Nightclub culture. Another important cocktail history that Filipinos are a part of is the Tiki Bar movement which started as early as the 1930s in America. During that time, in a famous bar called Don The Beach Comber (Los Angeles), celebrities like Charlie Chaplin were regulars. If you ordered a Martini or an old fashioned in this bar, they would make it for you in plain sight. But if you wanted to have one of their “talk of the town” tropical concoctions, it would emerge from a hidden back bar. Guests never saw who made them; today we know them as the Don’s “Four Boys,” and one of them is the legendary Filipino American bartender named Ray Buhen.

Fast forward to the present. The past few years have seen some major developments in the bar and cocktail culture. Now is the dawn of a new era. New and exciting bars and restaurants are opening left and right, offering varied yet polished drinks to suit every mood. Bartenders are the new chefs (liquid chefs), the new superstars in the F&B world; they are the rock stars, celebrities in my eyes. Today, Filipinos need not hide while preparing a cocktail. Now, we are present at front, the stage is now set! The Philippines has sent representatives to international competitions and are making quite an impressive dent in the bartending realm. One of the rising talented Filipino bartenders who is making a name in the field is Kenneth Bandivas of ABV Bar. He is the Philippines’ representative to the 2015 Diageo Reserve World Class Bartender of the Year Finals in Cape Town, South Africa.

Happy Ken

The Diageo World Class is the most prestigious and respected mixology competition in the world. Fifty of the best bartenders from the finest establishments in the world come together to put their skills, technique and knowledge to the test, and duke it out in five days (August 31 to September 4) of what can only be described as a cocktail bonanza (each contender will have to make 23 cocktails in several challenges). I met with Ken at ABV to talk to him about the competition and to sample some of the cocktails he will make during the competition.

Ken is the embodiment of the Boy Scout. (I think I may have just given his nickname…) Motto: Always be prepared! He prepared well over 60+ signature cocktails! (Ken, here’s and idea… turn it into a book already! I’ll take my cut, okay? LOL) Apart from touching base with a variety of methods of making cocktails (stirred, shaken, etc.), as well as different flavor profiles (spirit forward, sweet, sour, etc.), his game plan is to be prepared. He has been practicing and preparing for this for months. Having the honor of representing the country has not gotten into his head. Like his favorite cocktail, the Old Fashioned, Ken is simple, straightforward, confident.

Elgin Bridge

One of the challenges is to concoct a cocktail that will pay homage to the participant’s country. The first drink he presented was his entry for this category: The Bitter Felipe. This is special to him because it contains an ingredient that he hated when he was younger: the dreaded ampalaya (bitter gourd, for those not from around here; I’m sure you can tell from the name alone why this vegetable is an acquired taste). “It represents Filipinos in general,” he says. “We can turn something negative into something positive.” He makes the best out of a bad situation, so to speak, by making his own ampalaya liqueur by macerating (soaking a fruit or any object to soften and extract flavor) it in sugar and Ketel One vodka. Added to Bulleit bourbon, lime juice, and Palawan honey (for added local flavor), the Bitter Felipe is a creative twist to the whisky sour. I took a long whiff to experience the nose of this original cocktail. The fresh zest of the lime first got my attention, like an old fashioned but with a deeper complexity. Notes of the bourbon, has hints of caramel, vanilla, smoky, taste of citrus, wood, just the right amount of bitterness from the ampalaya to complement the bourbon. To me, Bitter Filipe was a perfectly balanced drink that has definitely left a “Better” taste on my tongue!

The next cocktail he prepared was the Heart and Soul, meant for the final showdown with the last top six contenders of the completion who will be advancing to the finals. Made with Kettle one vodka as base with paprika, homemade ginger syrup, lime, sage and egg whites. This to me was a beautiful symphony of flavors; fresh, savory, spicy. Shaken to perfection, resulting in a lovely foam that provided this libation a very smooth mouth feel. This drink was such a delight I could hear Tchaikovsky’s “The Nut Cracker” playing in the background! 

Heart and Soul

He moved on to his favorite drink, the Elgin Bridge. It’s an intense, spirit forward drink that pairs well with something heavy, like meat. He uses something that isn’t something you normally see in cocktails: homemade cigar liqueur. Using local Tabacalera Coronas. He extracted the cigar flavor by macerating it, resulting in a bittersweet, intense flavor. It’s mixed with Bulleit bourbon, chocolate absinthe liqueur, and poured over a Marasca cherry (instead of a sugar cube) into a glass smoked with bourbon barrel chips; isn’t this drink exciting?! I was so excited to try this drink! I was getting thirsty just watching him make it! But to my surprise, “MY” drink was stolen from me! It did a Houdini! Seriously, whoever took my drink knew what he was doing. I turned to Ken and he said with much empathy that that’s the last drink he will be doing as he has to save the rest for the competition. If I were a guy, I would be claiming blue balls! I will still be expecting to try this drink when Ken returns.

Whatever the results of the competition are, Ken, you already make us proud!

We may be lagging behind in the bar and cocktail industry, but something is definitely brewing. That our bartenders are making a mark in the international scene is certainly a sign of great things to come. You can see it in all the restaurants and cocktail bars mushrooming all around town. You can taste it in the more complex and sophisticated drinks being offered. New premium liquor brands are coming here because they can see that the market is ripe and ready for what they have to offer. You can feel the momentum of something forming, emerging, evolving. It’s a privilege for me to be part of it, a witness to it and to be surrounded by this energy. Sure, we’re trailing behind other countries. We are 5th in Asia right now, but hear this – this energy in Manila presently is comparable to the horse races. Like each owner is getting their horses to enter the gates, just waiting for that bell to ring! Exciting, isn’t it? World, we are knocking on your door! To all my fellow imbibers, Manila is a great place to be right now. Let’s all raise our cocktail glasses and drink to a bright, exciting cocktail scene in the Philippines! Cheers!

Philippines Ranks 15th in Global Survey on Financial Inclusion

By Lawrence Agcaoili and Louella D. Desiderio (The Philippine Star)

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The Philippines placed eighth with a score of 94 percent in country commitment and seventh place in terms of regulatory environment with a score of 89 percent. Philstar.com/File

MANILA, Philippines - Washington-based think tank Center for Technology Innovation (CTI) has ranked the Philippines 15th out of 21 countries in terms of access and usage of affordable financial services.

The Philippines earned 68 percent of the total possible points based on the 2015 Brookings Financial and Digital Inclusion Project (FIDP) Report prepared by John Villasenor, Darrell West, and Robin Lewis.

The FIDP report is the first of a series of annual reports examining financial inclusion activities around the world.  It ranked the 21 countries which have committed to improving financial access and usage using 33 indicators spanning four dimensions:  country commitment, mobile capacity, regulatory environment and adoption.

The Philippines placed eighth with a score of 94 percent in country commitment and seventh place in terms of regulatory environment with a score of 89 percent.

Countries ranked according to financial and digital inclusion. Brookings Institute / Philstar.com

It received its lowest score of 40 percent to place 15th in the adoption dimension as it got low marks in financial institution account penetration, debit and credit card use as well as mobile money use.

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In terms of mobile capacity, the Philippines got a score of 89 percent to rank eighth.  The Bangko Sentral ng Pilipinas has permitted mobile network operators Smart Communications and Globe Telecom to offer their respective mobile money services.

According to the report, the Philippines developed two of the earliest mobile financial services schemes with Smart’s Smart Money launched in 2001 and Globe’s GCash introduced in 2004.

As of 2014, there were about 111 mobile subscriptions per 100 people in the Philippines as individuals could hold more than one subscription. Registered e-money accounts increased 34 percent to about 27 million in 2013.

The number of micro-banking offices increased to 465 in 2013 from 370 in 2012 and the number of local government units (LGUs) that did not have access to a bank branch but did have access to a micro-banking office increased to 56 from 50.

Of the 604 unbanked LGUs in 2013, 398 had access to alternative financial services providers – so only four percent of the total Philippine population technically remained fully financially excluded.

The report noted that the BSP was the first central bank in the world to establish an office, the Inclusive Finance Advocacy Staff, dedicated to financial inclusion.

It said the Philippines has been very active in taking leadership roles in international organizations for increased access to financial services.

To make financial services more accessible, the BSP is working with industry leaders to design governance and operational structures for a national retail payment system, which is being developed with the support of the US Agency for International Development (USAID) through the E-PESO project.

Moreover, the BSP is working on a draft national payment systems law and associated regulations.

Are you angry enough?

CTALK By Cito Beltran (The Philippine Star) 

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Are you angry enough about our state of affairs in the Republic of the Philippines?

The thought has begun to surface as millions of Filipinos come to terms with the fact that the Self-Righteous Brotherhood occupying Malacañang are a bunch of incompetent and insensitive dolts who punctuate their failures with off the cuff remarks that only serve to incense the public. Filipinos have been known to be tolerant even of stupidity and mediocrity but the PNoy Misadministration has obviously broken all records as far as achieving nothing is concerned.

The one thing they have managed to be consistent about is to accumulate those who they call  “critics,” “haters,” and a vast number of angry Filipinos whose quality of life and productivity have deteriorated due to what many believe is PNoy’s indifference or insulated mindset to the day to day hardship of Filipinos. His big picture notion of making the Philippines a serious regional or global player, his insistence on passing the twisted version of the BBL, his obsession with out-doing his predecessor, or solidifying his imaginary “Matuwid Na Daan” have cost millions of Filipinos a high price in terms of their quality of life and personal finances.

For many, the formerly moral aspiration for the “Tuwid Na Daan” has crumbled under his form of selective justice, his failure to make his minions account for their non-performance and questionable conduct, and for ignoring the people’s plea for action and service from government.  Simply put his much-adored “Tuwid Na Daan” has become nothing more than the Tagalog translation of the proverbial phrase: “The road to hell is paved with good intentions.” Judging from the chaos, congestion and immobility on Metro Manila roads, airport and pier, it would be safe to say that we have found our hell on earth.

And like lost souls in the abyss, all we want now is to be able to bring back the travel time to the traditional 1 to 1.5 hours, it used to take instead of the 3 to 4 hour kidney and bladder busting ride. All we want is to be able to ride the MRT and LRT without having to get into fights with fellow Filipinos as a way of expressing or releasing our anger at a government and a President whose sole obsession is to insure the continuity of their failed governance.

So now we begin to read posts on social media mildly suggesting or asking: How should we express our anger, our frustration and how can we make this government act? There are now those suggesting a 3-day strike the same way citizens in Latin American countries have displayed their displeasure. Some suggest tax holidays or boycotts. One or two suggests giving the PNoy administration a taste of its own medicine by staging EDSA 3 or 4 (depending on who’s counting).

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These, Mr. President, are the initial snowflakes for “the winter of our discontent” that may come way before the May elections. Many of us do not have deep pockets to see us through and clearly people are losing their patience and waking up to the realization that something has to be done, something needs to be done, and history shows that the people ultimately does something about governments that betray and ignore their basic needs. Cory Aquino led one, Gloria Arroyo led the second, Urban poor almost had their very own EDSA3, so a fourth one is not all too impossible.

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The PNoy Misadministration would have us think that the reason for gridlock is progress as evidenced by the various construction projects, roadwork and infrastructures that are being put up. The PNoy administration is not the first administration or government to put massive infrastructure projects. Marcos, Ramos, and Arroyo had a lot but to their credit the gridlock did not turn EDSA into a parking lot almost everyday of the week even past the truck ban.

Ramos and Arroyo were concerned and sensitive to public displeasure resulting from being stuck in traffic. I know that Gloria Arroyo would call and nag then MMDA Chairman Bayani Fernando every time she heard reports of traffic jam or whenever she herself was caught in a traffic jam. Government officials were held responsible and expected to do something, that led to the no-arrest policy on main roads where the priority was to get vehicles moving as fast as possible. Under the regime of the righteous brotherhood no one is held responsible, they blame each other and when that no longer works with angry people then they say: “Sorry po,” “we beg for your patience and understanding.” That Mr. President does not fix the problem or get the job done.

In terms of vehicle and road use or the lack of it, we the Filipino people are one very oppressed and abused lot. When we buy cars, we pay for everything involved in making the cars, buses etc. We pay the duties and taxes on those products, we pay the duties and taxes on the fuel and other accessories that go into the vehicle and in order to drive or ride said vehicles, we pay for registration, insurance, license, medical exams, air pollution tests and road users tax.

The government collects the duties, taxes and VAT on our vehicles, on the fuel, collect money on the insurance, the LTFRB franchise and then on the road users tax! The Philippine government is the biggest business interest, profiteer and competitor but the worst in terms of investments, product development and customer service or relations. In other words, it is the biggest FREE LOADER that subscribes to UNLI TAX!

The so-called PPP or Public Private Partnership projects on infrastructure is the biggest scam of them all where the government actually gets private partners to bid and pay the government a concession fee to build the projects and then pass the bigger bill to Filipino citizens. In effect, the PNoy Misadministration is taxing all of us even the dead and their estates but none of that money goes to major infrastructure that we badly need. After taking as much as 50% or more for income tax and VAT, travel, road users tax etc., the government enters into a conspiracy with developers to make us, the Filipino people, pay for every time we use highways, airports, power etc.  So we are paying for everything and still getting nothing! That should make you angry enough!

Philippines: The wealthiest nation on earth!