CSOs and State 23, Financial education and Pidro Sing

To accumulate wealth and assets, to have sufficient resources for investments in the future, one must have savings, right?

Yes, and to have sufficient savings, we must use the habit and formula,
Income - Spending = Savings, right?

Wrong. It should be:
Income - Savings = Spending

This is among the most important messages that my friend, Peter "Pidro" Sing, imparted to the accountants, auditors and other staff of my sister's auditing firm last June 03, 2015. He gave a lecture on Personal Financial Education as part of the firm's education and training series for its staff, and some 30 staff and officers of the company were hooked and glued on  their seats, savoring every message, anecdote and experiences of other people, that Pidro shared.

Peter, or better known as "Pidro", is a self-made successful businessman. Meaning he did not inherit any huge money or business from his parents or close relatives. He went through a roller coaster of starting a business, go bankrupt, start another, close it, start another, sometimes simultaneously. Such experience is not attained or achieved in formal business education, only in the "school of hard knocks" or "school of life." Something that his audience that day greatly appreciated.

The above formula, Spending = Income - Savings, is something new for  many people. Meaning, spending must adjust after forced savings have been set aside. Forced, deliberate, personal and/or household savings. Monthly.

Pidro is not selling any product, any service, any consultancy. In fact he's doing this for free, he spends his own money and time as his personal advocacy. After going through the roller-coaster of business set up -- wealth -- bankruptcy cycles, he realized and teaches repeatedly, that the key is not so much on how big the monthly or yearly income is, but in how big and consistent is the forced personal and household savings. He says that he does not need any consultancy or professional fee with what he's doing because his businesses is earning money for him as he speaks for free. And it's true.

I have known Pidro for 3+ decades now, dating back when we were dormmates at Narra Residence Hall and fellow student activists in UP Diliman in the early 80s. He's a "slippery" guy even from police and military agents during the Marcos period. After graduating from UP, he would slip from one employment to another, then slip from one business to another, and wealth would also slip from him as he closed one business after another, until he found a good niche since several years ago.

Pidro's personal advocacy is civil society in action. We do not need the government in many cases to improve our lives. Life is about more personal and parental responsibility, and more individual freedom. Government  responsibility should be limited to a few functions, like having rule of law and protecting the people from aggression by organized, armed bullies and criminals.

Thanks again Pidro. Keep kicking.
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See also:

CSOs and State 19: UP Maroons and UP Alumni, March 24, 2014 
CSOs and State 20, Gawad Kalinga and Housing for the Poor, June 08, 2015 

CSOs and State 21, Patient Organizations, PAPO and HealthPRx, June 09, 2015 

CSOs and State 22, CIPS' Community Schools Project in Indonesia, June 28, 2015

Investment Liberalization 2, G7 and East Asia economies

Mobility of investments and capital across islands, countries and continents is part of human nature. A country or island for instance with plenty of beautiful white sand beaches will naturally attract investors who will put up modern resorts and hotels, that will attract more visitors from other countries, giving lots of jobs and other business opportunities to the locals and new migrants.

The UN Conference on Trade and Development (UNCTAD) released in late June 2015 its World Investment Report (WIR) 2015. The annex tables of that report are found here.

My sister's auditing firm published the 2nd issue of its monthly Business and Economic Update last month. Among the contents of that report are the tables below, original global data are taken from the WIR 2015.

Here, it shows that from 2012-2014, there was consistent net outflows of foreign direct investments (FDIs) in the G7 except UK and partly, Canada. Then in Hong Kong, Taiwan, S. Korea and Malaysia. 

http://alasoplascpas.com/publication-economic-02-Net-Inflows-of-FDI.php 

Numbers below show the ratio of FDIs over gross fixed capital formation (GFCF) or simply domestic investments. It is interesting to see how Germany and Japan have very small share of FDIs. This somehow gives an idea of their investment protectionism policies.

The most open economies to global trade and investments, Hong Kong and Singapore, have the highest FDI share to total national investments.  And an FDI share of 2.5 to 14 percent seems to be the average, possibly a healthy mixture, including the 10.5 percent for the Philippines. 

Until 2012, the bulk of FDIs in the PH came from the US, HK and Japan. By 2013 until mid-2014, capital from the US withrew, from HK declined significantly, from Japan retained, and a surge of FDIs from British Virgin Island.

http://alasoplascpas.com/publication-economic-02-FDI...

In portfolio investments like the stock markets, Japan, China, India and Hong Kong received significant inflows while many in the ASEAN experienced net outflows overall except Vietnam.

In merchandise exports (X) as a share of their GDP, Hong Kong and Singapore are run-away leaders, followed by Vietnam, Malaysia and Thailand. In non-merchandise, services exports like tourism receipts, Macao is a clear leader because of its huge gaming and casino facilities.

Personal remittances by their nationals who are working abroad, India, China and the Philippines (and Mexico) are the world leaders. The Philippines is #1 in the ASEAN.

http://alasoplascpas.com/publication-economic-02-Global...

Meanwhile, from another source, these numbers are interesting. Until 2012, the US was a major source of FDIs in the ASEAN. By 2013, capital from the US declined significantly. Investments from Japan, intra-ASEAN, UK and Netherlands are big. 

Source: ASEAN Investment Report 2013-2014, http://www.asean.org/.../asean-unctad-launches-asean...

Favorite destination of FDIs in the ASEAN are the services and manufacturing sectors. Data also from the ASEAN IR 2013-2014.

The above numbers and figures are additional reminders that the Philippines need to amend its Constitution and remove protectionist provisions that restrict or limit the entry of foreign investments in some sectors, while outrightly banning/prohibiting FDIs in other sectors.

It is not wise that government dictates that these areas are only for local investors and those areas, foreign investors can be allowed. Investments, local or foreign, automatically creates local jobs. If Filipino workers are prevented from being hired by foreign  investors here because the latter are restricted or banned on certain sectors, then many Filipino workers are hired by foreign investors in foreign lands.
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See also: 
Free Trade 35: EU-FNF Forum on 'FDI Engine for Job Growth', May 15, 2014 
BWorld 12, Investments, APEC and economic liberalization, July 25, 2015 
Investment liberalization, trends and lessons, July 26, 2015

Macro Econ Update

My sister's accounting and auditing firm, Alas Oplas and Co., CPAs (AOC) has produced a new monthly publication, the Business and Economic Update. Issue no. 1 for this month was released last week. I helped in producing that paper.

In the coming months, the publication will tackle sectoral issues like energy, trade and investment, healthcare, agriculture, public finance, and so on.

AOC has many local clients, and some multinationals, doing business in different sectors of the PH economy. The firm is also affiliated with BKR International, a global network of accounting and auditing firms with about 500 partner firms worldwide. AOC is the only partner firm in the PH.

So issue #1 introduces the readers to the macroeconomic view of the PH economy in relation to  its neighbors in the ASEAN, North Asia and South Pacific, Europe and North America. Multinational companies and partner firms of BKR International will find the data useful.

Here are the macro data.

The size of countries' GDP now is getting more and more related to the size of their population, unlike before. This is because with increasing globalization and global mobility of goods and services across countries and continents, more people have more access to various economic opportunities. Thus, the economic size of countries with bigger population tend  to expand larger than countries with smaller population.

And unemployment data. Underemployment data is not included as there seems to be no internationally-comparable definitions and data.

Check it out guys, thank you.
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See also:
Ipagbawal ang GDP Growth, Part 3, April 06, 2015 
BWorld 1, PH Economy and Politics, Is there a Disconnection?, April 24, 2015 
Demography 23: The UN, Depopulation and Climate, May 03, 2015 
Why are Interest Rates so Low?, May 05, 2015
Market Reforms in the 2016 Elections, May 25, 2015