The time is right for entreprenership - Go Negosyo

Looking forward to the future of business

The time is ripe for entrepreneurship -JC Go Negosyo

The best time was    10 years ago.  The next best time is tomorrow.  

This post was espousing this, as serving as Lecturer for the same subject at a GSB.  And also while joining the same movement in promoting entrepreneurship.   From Zero to One like bosses at Pay Pal  -  Peter Thiel.   From nothing to something.

Thisi decade will see at more $84 trillion of wealth being transferred to heirs in the next decades to come from owners of wealth to heirs.   We will see less of entrepreneuership and innovation

Transfer of wealth $84 trillion

This chart shows this to be over$100 trillion

 

Mt Kanlaon erupts; thousands evacuated

Looking forward to the future of business

Thousands were evacauted as Mt Kanlaon erupts, sending plumes up to 3 km high, and spewing tons of sulfur dioxide. 

We are glad we did not push through wiht series of development project (not because of volcano but because of other serious threat from insurgency)

Land is fertile, plenty of gtazeland, dearth of infastructure:  opportunities in power, health, housing, agri.   But it was a big No because of the threat of a volcanic eruption.

That is the reason why we avoided Tagaytay and Bicol too.   Even in Rizal, around Laguna lake, threat of volcano is possible  (Laguna Lake is a caldera accordingn to geophysicists) 

You can see that Taal is in frequent fits.  What if you have multi million project in Tagaytay:   a golf course, a condo, a testo?   Can you sleep at night (especially if your capital was borrowed?)

Is this decision correct?  Is it being ultraconservative.       

Top 10 industries where becoming a billionaire is possible?

Looking forward to the future of business

Do you have the skills?  Do you have anything to invest in these?

PHilippines top 10 richest

Looking forward to the future of business

This isi is good for Philippines.   Their achievement inspires many Filipinos, creates more jobs, and lift up PHL GDP.

One is amazed that one family's wealth is in to trillions, and effect on the economy and total assets of their empire runs in to 20 trillion  Bigger than PHL budget

Will you be one via the hard legit way?   Or you will just be govt supplier/contractor?  Or be a congressman?

This post wants to correct that it is Joseph McMicking who pushed up Ayala to the next level -  from pulot making to becoming a real estate and conglomorete power house.   One who was former politician had somewhat shady background in creating his real estate empire..

Casinos rake in billions; would you invest in one if you are moneyed tycoon?

Looking forward to the future of business

Casinos rake in billions and many tycoons have bet on casinos and hotels:   Razon, Gokongwei, Andrew Tan, Pineda.  Philippines is now tops in terms of number of casinos berating Singapore and Macau in 

If you had money to invest  in  a casino?

This post, espousing entrepreneurship, creating from zero to one, disdains this type of activity  destroying one to zero.   Casino is gambling and this destroys assets and estate.   There are losers and winners.   It promotes poverty and loss of job.  We saw adverse living conditions (and near collapese of Atlantic City) and Las Vegas.  

Entrepreneurship, a hard thing to do, creates wealth;  casino destroys wealth.   Casino gambling spawns other crimes:   money laundering, loan sharking, prostitution, hold ups, kidnapping.   

We hae seen incidents of suicide and broken families in PHL due to casino addiction (there are also on online gambling addiction) Casino is bad the same way POGO is considered bad.

This post objected to a business game that included lotto as one of thte activities as this is contrary to a legit business model.

Would you like a casino be put up in our place or invest in a casino?   I do not subscribe.  Do you?

AI time for robotics has come of age

Looking forward to the future of business

In my recent travel abroad this post witnessed the invasion of AI in various aspect of travel:

1.  E gov registration of traveler for Immigration and Customs thus speeind up the process and lessening long queu at the airport

2.  Restaurants self service seating/reservation and ordering system.

3.  Couple this with swieapable Octupus payment (debit card) system.

4.  Riding a bus /train with swipeable currency.  

5.  We have heard of hotels that do not have front desk.   You can check in and check out without personnel.   Everything is via computers.

We just do not know the effect on jobs and employment

What happened to GE?

Looking forward to the future of business

In the 90s it was the darling of other executives of corporation.  The rise (fall) of GE was authored by JackWelch.   He was a business icon.

Now we know that GEs growth was misdirected and somehowe the followers were scammed.   The industrial giant became an unfoccussed giant.   GE thus grew from $18 b when Welch took over to over $400+.  It was all over the place:    health care, consumer finance, insurance, energy, light bulb, jet engines, railroad, power gen.   etc.   

It may have sapped management energy and focus.  Worst of all, iit was disclosed that to pursue acquistion, employees were"yanked"  The money saved fro wages was used for acquistion.

Thus when Welch left, he left shell companies, devoid of human resources.  Wtih nothing to continue acquisition, GE stood still and evenually declined.

The big blow came in 2008 when there was the financial crisis and its huge consumer finance debt required a huge bail outl.   GE was forced to stop paying dividends and sell off subsidiaries.   And GE no longer was its usual self under Welch.

Yesterdays heroes can be today's villain.  And Welch no longer engyoys the adulation he used to get from his followers.

Bitcoin is a hyped up fraud - Jaime Dimon of JP Morgan

Looking forward to the future of business

Many still believe in it.  But J Dimon the world's top banker think it is a hyped up fraud.     

The interviewer should have allowed the interviewee to speak frely

Interview with Jamie Dimon of JP Morgan on bitcoin

Changing landscape in the auto industry

Looking forward to the future of business

Peter Drucker made GM as the example of corporate management in this book Effective Executive. But now GM is not even a shadow of its old self,  European and  US brand Chrysler have consolidated under the name Stellantis.   And now they are facing lay offs.  

Even VW thought to be invicible with its strong bandas like Audi and Porsche is closing down plants.

Why?

It has something to do with the search for zero emissions.    What is the next big bet   The industry is de emphasizing Interanl Combution engine.  

And thus favors:

1.  Tesla and BYD with EVs, 

2.  Toyota for the hybrid 

3.  Toyota and Hyundai for the fuel cell.

Thus in the local setting, we see more investments in dealership of BYD and Tesla.    What happens to the huge investment for dealership and sales offices of ICE?   The emphasis has shifted.    

IN the next decade or so, we see different new players for automotive industry.  There will be loser and winners.   

It does pay to ask the question :   what will be the industry  10 -20 years from now.    You better make your investment in the right direction/trend.   

Todays winners may end up tomorrow's loser.   However, we do not need a crystal ball, We can see the trends.  

Perang hapon (Reminder of Japanese currency in PHL during WW2) Japanese yen Y160 = $1

Looking forward to the future of business

There used to be 25 top Japanese companies in the world;   now there is only one.  Tourism is becoming Japan/s dollar earners.  It has lost its technical prowess.   Japanese companies used to be the model for management practices by this post.  It can not be longer said of Japan now.

Japan has lost out to China.  

Japan economist managers engaged in a lot of financial and fiscal experiments, like negative intereest rates, printing too much currency etc.   

The Japnese yen lost 1/3 of its value vs US dollar.  What will happen next?

Loss of drive by business partner in the Visayas

Looking forward to the future of business

Last Monday and until yesterday, we were in the Visays to visit our joint venture project in the Visayas.  

We have to see with our two eyes our preparation for the Nov 1 date where people see our project.  It is unfortunate that as usual,, our officer and people, being unsupervised (not visited ) commit the proverbial when the cat is away.

What is saddening is that our partner who is there in his 80s, lost interest in his old love - politics and in his sideline - business because his children are abroad, and his lone son with his his present wife, is having difficulties in his attention and is not serious in his life.

Should we continue with the business or divest?

Modest businesses, no losses vs large businesses of peers but with huge losses

Looking forward to the future of business

This post recently read businesses of peers (who were batchmates in college) It was noted:

1.  One heads a family business, a large, old university but which experienced millions in losses despite being in centrral location

2.  Another one heads an international food company.   His business, experienced millions of losses in $ abroad (translated to milliions in local currency.

I have to try harder not to have losses, but thrive.  Guess am just lucky, despite lacking business experience and education

Met again with prospective business partner, allegedly disinherited

Looking forward to the future of business

We met again with a prospective business partner at a coffee shop in MM.  If only to announce good news and possibility.  He borrowed money and kept on paying interest.  His prospective cash flow from payment of gasoline station lease has not materialized on account of his domestic troubles with his brother and sister

We also learned that he has been disinherited by his mother whom he watched closely at her deathbed,   But disinheritance can only be valid if there are several valid legal reasons.   (Has his lawyer examined that?

Why did IBM fail; who killed IBM

Looking forward to the future of business

While you cant drive a car looking at the rear view mirror, you have to look at the back up camera or mirror when backing up.   It certainly helps you navigate the future by learning from the past/history.

We should remember that IBM failed in its  business because of

1. Bureaucracy

2.  Related to 1 being out of touch with reality, competition and customer  

3.  Bad choice of leaders and CEO.  

You should not have this kind of structure.   Management

Evaluation of the newest housing project of the govt.

Looking forward to the future of business

It looked very attractive in the beginning what with the more than P250 billion that is available.  Couple this with the strength of the housing provident fund:    monthly contributions, loan collection

After interviewing a lot of people and reading their manuals, these are the conclusions

1.  The standards are for high rise condo:   40% open space (that means your maximum saleable area is only 40%!  There should be complete amenities

2.   There are price ceilings and margins therefore would be thin.

3.  While the EO 34 discourages developers only big time developers with tons of cash and credit line

      can execute these projects

4.   A lot of cash/equity has to be advanced prior to any release:   1.  Land must be acquired   2.  Full

      land dev.    3.   A tower must be completed, A-1 finish before any release.   For the project we                     envisioned more than P200 million is required.   We better stick to what we are doing where much

     lower cash is required

5.  The housing fund wants beneficiaries to have income.  But those submitted are just like any 4ps beneficiaries.  No job.  

While many investors would think that they can gain much from this program, (since the developers are excluded) it is the reverse.   The private sector would advance the development for this housing program.  While the greatest advantage for the consumers/beneficiaries is the 5% beneficiary. the budget by GAA for this is quite small and will not be enough for the number of units being built this year.   

So no go for us?

      

New township under the 4ph program, to be institutionalized. Rates to be only 1.25% only?

Looking forward to the future of business

Midrise housing units 4 storey, 20 towers, 100 units each

Looking forward to the future of business

Ito tinatarget natin sa queen city of Region 1.  4 storey, no elevator.    Ala bliss.    Para mas efficient.

Mga objectives na maabot:

1.  Job and employment generation

2.  Entrepreneruship.

4.  Raising standards of living;

5.  Political -  getting votes.   2K units =  x 5 =  10,000 votes for local lgu execs, and  admin mideterm senatorial candidates.      

Its National Housing Month, can we participate as contractors?

Looking forward to the future of business

Its national housing month.  At 11 am today, we are supposed to have a meeting with a senior official of the National Financing Arm for housing who happens to be the relative our partner in construction.

A 4ph housing project in a queen city was suddenly brought before our lap after we met with the executive assistant of a queen city in the north last Wednesday.

Last last last week, we were referring the 4ph program of the said city to a supposed "big time contractor " of land dev company based in Alabang,  Their deal turned sour, and suddenly two projects :   a public market (their public market burned last August) and 4ph were looking for an investor /proponent     Their proponent for the public market passed away.

For their 4ph, the proponent could not push through with land acquisition. They were promised P70 m for the land acquistiion under SHFCI  (Its head F. laxa is an acquaintance)  The 4ph is  signal project of PBBM to address the 6million housing backlog, for which P250B of the Pag ibig program was allocated.

Federico Laxa - CEO SHFCI

We have several questions for the 4ph:

1.  Are we qualified for the program?

2.  Shall the take outs be from us?

3.  Can the funder provide a credit line of P1.5m x 2,000 beneficiary?

4.  Will the take outs be fast and efficient (it was not before)

Since the senior officer is from our place (he is a deputy CEO) maybe we can get favorble reply

.   

 

On line seller killed over debt? Its fearful to lend extend credit

Looking forward to the future of business

A couple was assassinated by who appears to be their friends and compare/comare.  But who owed them P13 million.   One could be killed over debt (the lender).   I have relative who died several months ago over the same issue.  

Focus vision for the eco zone

Looking forward to the future of business

We conferred with the chief executive regarding an ecozone being organized at a premier city in Region 1.  All that they can say is to invite locators from a nearby city which is sinking due to liquificat=ction

Can we make theis a manufacturing hub?   It has no shipping port which is conducive to manufacturing.  The nearest are in Subic and Poro Point.  But they are near and are 2 - 4 hours away.   About 200 km away.

My eldest that their ecozone should be focussed on a niche or indusrty.  One that does not require huge cap ex from the govt.   One such sector is IT:     data, cloud center.  Cyber zone.  Where you can outsuruce IT jobs like programming and apps    Many excellent workers in BPO and IT and MM are from Pangasinan.

But of course the power supply from the grid and IT (fiber optics link) have to be upgraded.  

More business opportunities - public market and 4ph

Looking forward to the future of business

This post introduced a broker/agent to the principals (EA of a major in major city in Region 1)  However the agent and his principal carelessly dropped the same by negotiating over the phone and advancing a crazy deal.   They did not examine the opportunities by crashing head on with their offer which the party from the north promptly dropped.  These were about a public market venture (their market just burned down) and 4ph (which the principal agent were looking for.

The market deal:      It involved an almost one hectare property and can be built on 2- 3 storey configuration and revenues can come from monthly rent, parking and rights.   The revenue can amount to 

(at 800 estiated locators )   P80M for rights, over P300 m in parking fees and P1,600M in rental for the next 30 years.  Rent will be at P32/sm.  

The housing 4ph  They have a ready package good for 2,000 beneficiary, on 4.7 hectare property.  While I though this was on public land, contractors have to obtain the site.  I will cost 77 million, for a site near the center of the city.   27 sm, 4 storey,   Cost not more than P30,000 sm, selling price not more than 42,000 sm.   The estimated Gp here is P300 - 400m.

The principal whom we talked last Friday, who did not do their computations are frantic in running after these deals, But the principals from the north would not like to do anything with them anymore    They would like us to do this for them.  We have in business for more than 20 years. 

This is on top of a memorial park we are about to buy and 3 hectare expansion of the exisiting project we have.

Business opportunities or telenovela series on Quadcomm hearings

Looking forward to the future of business

During ther past several weeks much of the time of this post was spent on watching the new telenovela series:    prosecutor like grilling of political personalites, alleged romantic relationship between former Pres and GM of a charity office, killings in a jail, link between police characters and informants.  I realized that they were not paying for my meals, but they were getting free ones, and were probably bribed big money to do this hearings. 

So I made an inspection trip and on the side tried to look for opportunities.  And opportunities there were.  This office brought a long a business and real estate agent who represented two friends:   one a solar senior officer, and other one a seruveying quantity firm making forages into real estate ventures.  We could be agents, brokers, consultants. to the following:

     RE

    1.  Prospective solar farms for sale or lease

   

         1. We can broker the project

         2.  Flip -  take a position on the land, and resell the propert y at a higher price once a deal goes

                         on

         3.  Permanent ownership -  buy the land, lease it, for say 5 years, with % increase on the 6th year

              and take equity on the lessor, participate on the RE

     2.  RE company for sale.   Onwers are quarelling.

     3.  Cooperative seeking funder, and/or builder of minihyrdro.

  Real Estate:

    1.  A city whose public market burned is willing to give a lease contract on a developer who

         can rebuild its project

   2.  Solar farm 100 hectares for sale

   3.  Eco zone looking for an operator.

   4.  Citylooking for a builder in the   4ph program program.  

      P250 b allocated for this via PAG IBIG  DHSUD through Sec Acuzar will spearhead the project  

      (teh LGU will provide the inventory of public lands for such housiing, and apply for developmental 

      land of the site.    The 4ph is contaiend in EO 648

The agent has a principlal who is going to this govt project.   It is not clear whether they  can build, finance  the project.   Or willing to get their hands dirtied.  

The opportuntity for RE is $66 billion, or P3.696 trillion pesos, for 40ph is  Php 250 billion.  Thousands of job would be made advailable,  say 10,000 plus the multplier effect   (4 trillion x 10  =  P40 trillion in additional GDP.  Thats a lot

What caused Romes decline? Is there a parallel in modern world

Looking forward to the future of business

These were mentioned as causes of Romes decline (mostly economic)

    1.  Heavy taxation

    2.  Inflation (debasement of currentcy)

    3.  Trade disruption caused by invation and internal strife

    4.  Reliance on slave labor

\   5.  Unemployment -->>>lack of finance for military

Causes of Roman Empire decline

US $35 trillion debt costs $3 billion a day (or $1 trillion a year); when will US solve this challenge

Looking forward to the future of business Savings from oil and coal importation

We could not generate that much profiit in a year (that is P150 billion )  We are lucky to make a million PHP a year.   And yet that is the reality of US economy and financed.  That is the downside of Keynesian ecoomics (deficit spending to pump prime the economy)

Nobody is the US Legislature is taking steps to balancee the US budget and solve this debt crisis:

    1.  No plans to increase revenues and reduce expenditures? 

    2.   Everybody in US wants to spend more and more:   for US military, foreign aid, more federal spending

$3billion a day interest for massive US $35 trillion debt

Developers role all but forgotten

Looking forward to the future of business

We were real estate developers about 3 decades ago.  The projects we had abutted the highway: 4.   Three were  were housing subdivsions and one was a memorial project.   

The frontage of the 3 housing subdivisions are now all commerical contributing to distinct skylines of this municipality.   This town has now but become highly commercialized.  About a dozen fast food establishments are located in projects this post built.  Land values zoomed from P350.00/sm to P60,000 per sm.   Quite a big income for the land buyers we had, and huge contributions to RPT or LGU, and huge CGT to BIR

However, we developers are simply in the background and all but forgotten.  Only self serving posts like this give me/us psychological income for having engaged in such a project

Jollibee at Unishoppe

Jollibee at Richmond

Consultation on holding company, exchanges between shares of stocks and real properties

Looking forward to the future of business

My youngest daughter and I had working lunch yesterday re corporate structures:

1. The Alice Guo case had some deep lessons on corporate affairs.  The purpose of multiple corporations are to create corporatre veeils which seemed to have been pierced.

2.  The viel curtains you from piercing eye of public and tax collectior.

3.  Establish M as holding company.  It will hold shares of stocks from various units.

4.  The holding of various properties and corporatins must be justified by cash infjusion.We learned from Makati boys how to maneuver sales of properties without actual cash out..  Its a secret

5. Match corporate structures with organiational strengths and performance

6. Maintain edge and majority as you establish crporate structure.   An equal sharing results in stalemate and in my case an ouster.    

Wealth creation for the consultancy

Looking forward to the future of business

Estimate of monetization of consultancy last Sunday:

1.   For development   -              P10,000,000

2.   RA 6552 (forfeiture clause)       P500,000

3.   Partial cancelleation in CTS    2,000,000

Must be about P10,000,000 -  12,000,000

Cost reduction, sound advice create wealth.   Experience count.   Mistakes and legal binds are avoided

Fmr employee solicited advice on a real estate project

Looking forward to the future of business

A fmr staff, millionaire wannabee asked help on a project doing a 6000 sm compound - titling this and selling on installment.  She had a plan for 60 sm a piece to be sold at P6,000 to P6,500/sm.  And still planning to buy the adjoining property for a staggering amount.

My advice:    on current porject

1.  Review pnl, what is going to be the promised amenity.  She plans to develop the property with roads etc.   I asked for the area of road lots.   Its  1,600 sm or roughly 40% of the gross area.   And if there is going to be development, she is going to be in the red.  The road development would cost a good 8 digts.

So be sure to sell this like the others on a as is where is basis.

2.   For the legalitties:

     1.  CTS with buyers -   insert 6552 on the Offer to the purchase.  Forfeiture if there are arrears

                                           state clearly that it is undeveloped property.

     2.  For CTS with the raw land seller -  that she can borrow the title when the time comes for the issuance of individual title.  That she can ask for partial release and cancellation for payments tht she has made.   

For her expansion:

1.  Do nothing at first since there is no ROW for the adjoining property (which she is developing now)

2.  Propose a jv, direct sales from the land owner to the buyer.   Go for 70-30  + 5% for the ROW

     Insert the same provision as in 1.2.2.   She can sign the DOAS for fully paid plots.

Many newbies and wanna bees have a lot to learn from aged business perrson

                                          

                  

Difficulties with renewable energy

Looking forward to the future of business

All is not sweet ang nice for renewable energy.  Some were false and based on worng assuption

1.  Solar panels

     1.  Panels degrade over time by as much as 3% per year

     2.  Batteries need replacment every three years lengthening ROI period

     3.  The inverters can catch fire

     4.  They only work during daytime, and at most only 20% efficient

     5.  Problem of storage

     6. Technology is changing.  There are more efficient panels like perosviite

     7.  Hard to fit into the grid because they generate square waves not sine waves

     8.  The solar panel junk

2.  Wind turbine

     1.  Can be dead without wind 

     2  Wear out easily 

     3.  Is noisy

     4.  Kills birds

3. EV vehicles

    1. Turns out to require maintenance 2x the ICE engines

    2  Catches fires

    3  Charging infrastructures

    4.  Range anxiety by motoriests

    5   Battery disposal nightmare

    6  Charging requres grid pwoer which is till dirty

    7.  Battery raw materials extraction has defects like child labor, use of fossil fuel machinery for extraction.  

There        

Kabahagi ng Go Negosyoa noong nagsisimula ito

Looking forward to the future of business

Noong nagsisiumula ang Go Negosyoa, ang inyong lingkod ay naging kabahagi nito.  At ito ay pure gratis et amores.   Fr ee

Ako ay naging

1.  Isa sa mga tagpapagsalita sa mga caravant.  Nagkasama si Karen Davila - siya host at taga tanong

2.  Mentor sa mga forum sa PTTC forum

3.  Kasama sa mga episode ng Go Negosyo kasama si Gladys Reyes.  

Ang ka interaction namin si dating DTI boss Mon Lopez.  Siya maalam sa negosyo at pakikipag ungnayan sa mga propesor sa Unibersidad.

Natutuwa ang lingkod na ito at nakatulong sa Nation Building.  

Kahanga hanga si G. J Concepcion at siya ay nakakakuha ng suporta sa gobyerno at patuloy ang Go Negosyo sa paglipas ng panahon maski iba iba na ang pangulo.

Evaluating an existing project for sale

Looking forward to the future of business

Two projects were offered to us in a city in Region 1 province.  A lot has to be seen in evaluating the proejcts.   Once is for sale (existing) and another one could be only for management and consultancy.   Here the paper warks that must be seen.

There are certain liabilities that must be recognized and as points for negotiation:.  For example the installment contract receivable and perpetual care (iif it is non existing or intact).    ICR shall be for increase in price or it has be excluded because it is unsure?  What is going to be the liability of the buyer  for past sales?   They are explicit in the implementing rules:

   1.  TCT

   2.  Tax Dec

   3.  RPT

   4.  SB or SP ressolution approving the project

   5.  Development permit issued by MPDC

   6   License to sell

   7.  Site development plan

   8.  Inventories

        1.  Sold

        2.  Unsold

        3.  Sold but in arrears

   9.  Perpetual care fund

  10.   Installment contract receivable

  11.  Perpetual care balance, status

  12.  Types of product, price list

A lot of things to see, examine and evaluate?

At last the prospective funder replied that she was good to x millions

Looking forward to the future of business

The group I was advising encouraging to take over a project was disheartened for the last two weeks because of the unclear response of prospective investor who saiid yes a month ago.  We wondered and speculated on the true state of their finances.   

There was a lot of worry on personal circumstances.  At last we got an snswer  Since the commitment now is 1/4 of original projections a lot of adjustment have to be made:    1.  budget, 2.  timelines, 3.  marketing.

When the month ends, the team can proceed and be a financial success.

Ease of doing business in the Philippines recently no 94 from 124 (out of 190 countries)

Looking forward to the future of business

There has been marked improvement for the Philippines in area, jumping 29 notches.   That makes Phiippines in the middle becasue there are 190 countries being measured.

That means we cna still improve.

As someone dealing with governement agencies the laws that has been passed were of little help in easing transactions with govt agencies.    It is still byzanthine, because when you get legislative permits, politics come into play, and oftentimes you are advisied "there are expenses"

And with just 3 years tenure, and the length of time it takes to get approval, you incur expenses from one batch to the other.

What about  in other branches of govt?   In my survey of landed gentry (those who own large tracts of land) from whence you purchase raw lands, most of them are owned by fathers who are in branch of govt that decide on land cases.   The lands are compensation to get favorable approval.

Who will protect the citizens from this agencies who do shakedowns?   The penalty is unease in doing business.  When will changes be coming?   When can govt officials, be just compassionate and conscientious?  

We are sure that agencies who prosecute govt crooks are also involved in these sheenigans.   In a country where people profess that everythign can be bought......

We all know we are Christian countries, well educated, who are well versed in ethics because of early catehicsm, quite a number of Christian churches teaching justice and charity.   And yet we know pastor politicians who are.....  And pastors who muddle in politics who are also.....

Investment in health, emergency and rescue facilities

Looking forward to the future of business

Early on business development, this post led investments in rescue emergency  facilties.  Bought ambulances, fire trucks, rescue equipment.  We invested in training the trainors for emergency responder, amabulance and its equipment, vertical rescue facilities.  We did in collab with Johnny Angeles of AAP.  We think it was a good investment.

We also built water system with fire reserve capabilites.   How many businessmen and developers have this advocacy.?  We stopped when NDRRMC came into being.  However we surmise that there is not enough efforts in training.  Most ambulances I know are just transport facilities

We recently saw UNTV conducting BLS and other rescue training in Mindanao.

Avoiding investments in AON prone areas

Looking forward to the future of business

This post has avoided investments in disaster prone, Acts of Nature areas:    subject to flooding, volcanic eruptions, and landslide.

In a way this is viewed as being too conservative and thus have no investments in Tagaytay, Bicol, Kanlaon, Baguio City, beach fronts and more.

No guts no glory.? 

At least this post can sleep soundly.   

Would you put up a resort in areas (as eastern seaboard of Luzon) where waves can reach heights of coconut treees when there are typhoons.

Opportunities abound in Region 1 - its no longer at Region 1V

Looking forward to the future of business

We recently took a trip to a province in Region 1.  Vote rich.

The TIPLEX ends at the this province.

Some opportunties noted were (in this particular province:

1.  An economic zone in a City with

2.  A diviersion road being built

     (At diversion road in Urdaneta, many new busiensses have been built.

3.  Lots available for solar farm near the grid, at an unbelievable price;

4.  Solar lamps, pumps, at prices that are 10 to 15% lower than exhibits, and previous offer.

     P21K ang 80 watts with 6 meters pole (Sa kanila 6 meters pole +  180 watts less than P20K)

5.  Memorial park projects, partially built that are for management and or jv.

     Another one in resort town.  With permits all ready.

I concluded that the opportunities are no longer in NCR or MM.  These are growth areas  Couple this with publicity for this province due to Pogo hearings,   Closeness to China too.

We should not just stay in our offices houses waiting for opportunities to come

Higher losses for a local multinational food company

Looking forward to the future of business

The head of this company  Joselito Campos.was a former college classmate. He is the son of  Unilab, the biggest local drug company which is multinational.   It is unfortunate that the losses of his company doubled for 2024.  In PHP th8s runs into billions.  While our modest company are not that much, being local and not $ denominated, we are happy that we do not have that much losses.

The losses were attributed to poor performance in US market

It is imply no guts no glory.   Growing big entails losses.

I had advised a local food processing company vs  putting up a plant in USA because of tight competition, (and lack of knowledge and experience in US market) and high labor cost.    With a socialist governor -  Gavin Newsome, the advice could not have been much better.

Is it still OK to do business in USA?

Del Monte losses doubles

Opportunity everywhere

Looking forward to the future of business

This post lost 3 deals because we cant get TD titled.   We spent 6 months on these deals and they were wasted.   No time to despair.

Today as I went on biking route somebody, a kapadyak on MC chased me and we had brief conversation.   He asked if we can take on 4 hectares untitled property.   Its in a different town.  So no problem.

Shift of business models from selling hardware, to making platforms for services

Looking forward to the future of business

Why is apple making more PHP than Samsung?   Why is Samsung floundering despite making being the leader in CP manufacture.

Well Apple has monetized its Apple iphone to the platform for its services.   For its renewal of ios, the Apple TV, the sale of music etc.

Whereas, Apple is just focused on Samsung phone sales

We see ourselves in the future selling more services where margins are higher and repeat sales are possible rather than sale of hard assets

If people so delegated, are not moving, or not producing results, even if you are semi retired, you have to take action

Looking forward to the future of business

Yesterday, this post went one of its biggest business units.  It has a large inventory with just one personnel. I went to the provincial unit and invited the former top notcher in marketing for  possible business deal, ie. marketing its huge inventory with special reward offering.  We had lunch and discussed possible business deal.   

We will be selling three product groups/category.   This post was thinking of  3,200 units in one year.   

I was fortunate that her business now, marketing is not making that much now

THATS FROM ZERO TO SOMETHING.     Determination alone is omnipotent.     God bless

Why are 99cents stores closing? Walgreen, Walmart, and 711?

Looking forward to the future of business

Whats causing this?

1.  Post pandemic blues;

2.  Decreased purchasing power of consumers due to inflation?

3.  High shoplifting losses vs very thin margins;

4.  What Amazon has wrought?

5.  Higher minimum wages legislation

We used to own a retail establishment.  We could not stand competition with a Sy owned retail store.

 There are many players now:   operating in high rent environment, tight competition, and reduced purchasing power too of consumers.

Are there other things that owners, business managers can do to avert closure....

Are the politicians who increased the cost responsible?  What is better -  higher wages or no wages?

Is this limited to California only or Dems run state

Who are the players now?

1.  Family mart,

2.  Uncle John

3.  Dali

4.  Save more

5.  .Alfa Mart

6.  7 -11

  

More enlightenment (or confusion) on Yen carry trade.

Looking forward to the future of business

This was made several days ago and correctly predicted the raising of interest rates and Yen upsurge in value.  May be triggering the  sell off.

Tutorial on Yen Carry Trade. Were you enticed to invest in this - easy money

Looking forward to the future of business

Easy money;  easy loss

Did the carry trade trigger the market sell off? Is Japan taking down the world finances

Looking forward to the future of business

Is this worse than WWII waged by Japan?

There is huge carry trade happening about as some traders estimate to be between $10 to $15 trillion.   Carry trade is just an arbitrage game.   You get low interest rate from Japan say at 0.80% and invest this in US Treasuries at 3.5% and profit from the interest differential.  Or if the yen sinks further, you can earn on the currency too.  However, things can go south as it is now:   Bank of Japan  has raised interest rates, and the Yen price is on the upsurge.   

Thus funds hedge managers are unloading their carry trades because they will be losing with rising Yen exchange rate, and higher interest rates in Japan. 

And probably this is the cause of the sell off -   investors and fund managers getting rid of carry trade portfolio which are now in losing/negative terriroty

That is why:    this post does not advocate paper shuffling business, making money out of other people miseries.   Do business that really generate values for customers for the world like construction, manufacturing, agriculture, construction.  Arbitrage is a zero sum game:  there are losers and winners, gain gained at the expense/hurt of others.

Is the world on the road to recession (perdition?)

Looking forward to the future of business

Global sell off intensifies

The US, Germany, Korean, Japan stock markets are on decline.   Losing by as much as double digit %

Everybody is spooked by the following events:    Possible escalation of Iran Isreal conflict, high unemployment rate in US, delayed rate reduction by US Fed.     And may be just may be to the presence of carry trade in Japan.

Nikkei fell 12% reminding us of the 2018 crash.  Tech stocks:   like Nvidia and Apple are mostly affected

Amazon lost double digit causing wealth of Jeff Bezos, one of top 5 richest men in the world to plummet big time

Pundits are wondering if Fed is interested in:   fighting inflation or preventing recession.  Well they raised rates to fight inflation

This is what doomsayers have been saying:  Schiff, Kiyosaki, Buffet are saying long long time ago.  And many did not pay heed.  At times the stock market went into the bull territory.   

This post being in the MSME territory would like to focus on micro market.  But we can not deny that Macro market, like the stock market health can affect micro market.   (Well the stock market reacts to economic fundamentals) and a plummeting stock market warns us to be prepared.

87% tax to businesses in California? That is why many businesses are on exodus to other states!

Looking forward to the future of business

87% tax for businesses?  This could destroy businesses in the fabulous state of California.  No kind of business will survive under that environment.  Couple that with high crime rate, high minimum wage, homelessness.  It is certainly not a good place do business anymore.   Top names like Google, Tesla, McDo is also exiting California

All of a sudden our business environment looked so friendly and enticing.   This is even more attractive to export processing zones and free port (as in Subic)   Its time to send trade missions to California to invite them to do business here.

One time I was invited to do a business plan for a meat plant in California which the local family bought for a hefty sum  I advised them vs the idea.  Instead to just export to Asian and ME countries which could achieve the same volume

What will happen to our kababayan in California?   Will California still be the state that has GDP second only to the USA? 

Why has California transformed to be a dismal place for business?  Can this still be reversed?

Buffett happens to be awash in cash when market is about to crash; he goes bargain hunting when stocks fall in value

Looking forward to the future of business

We can only guess that the market is about to crash, or stock prices will be discounted.   He did this before and is now selling off stocks that had increased in value.  That is how Berkshire makes  profits from market crash.    (A bear player?  and sells off in Bull market)

Brilliant eh....

Buffett indicator:       Stock Market Cap   Indicated by Wilshire 5000/GDP

The Buffet strategy does not seem to be rocket science.   Just stay liquid when you see the market overhyped and the bubble is ready to burst.   Then go bargain hunting (just like in 2008 for the BofA stocks which they are unloading now)

 Compare this with historical average.  Higher or lower?   (Lower -  buy)  Higher, expect the difference to be the amount of crash.    So when that happens dont buy!!!

It should give the % of overvalue of stock market cap over GDP and would indicate the % of crash

Why is Warren Buffet (Berkshire Hathaway) offloading stocks? Are there corrections in the stock market we do not know? Should you offload stocks too?

Looking forward to the future of business

Warrent Buffet has offloaded billions worth of stocks:   BofA and Apple.  Huge chunks of his holding.  He prefers Treasuries which are sure bet and liquid?

Is Buffet developments that we dont see.?  Are there new things he wants to be positioned in?  Are we on the verge of a crash, or recession.  We do not know.   Only the sage of Omaha knows.   I could only speculate .

But whatever it is lets do our own critical analysis and pay attention to many experts who are predicting a crash.    P. S.   Today August 7, 2024, the crash is unfolding.  Markets world wide are on great sell off.  

Apple does not have much of an innovation;

The financial environment is not friendly to banks.   Or that BH is harvesting BofA stocks for the gains when they bought it cheap 

Let us be prepared.      

PBBM's marching order to the new Acting DTI Secretary Roque - uplift MSMEs

Looking forward to the future of business

This post is glad that the DTI will concentrate on building the business community from the grassroots.  Taking care of the useful many.

In the past this department has focused on the big industries -  getting FDI.   

DTI has shifted gears to the small business that matter.  

More power Sec. Roque

Marching orders to Acting DTI secretary - uplift MSMEs

New DTI secretary, an entrepreneur, businesswoman, fmr USEC for MSME replaces Alfredo Pascual who resigned

Looking forward to the future of business

Former Usec Maria Cristin  Aldeguer Roque was sworn in today as replacement for  DTI secretary Pascual who resigned.   She was the founder of Kamiseta which she founded after college.

We are thankful that a person with entrepreneurial and business experience will be in charge of business and trade in the country  -  not career technocrats, politician.  This is welcome addition to our country's drive towards growth and progress

Ending an adventure on untitled property project, accepting risks and reality

Looking forward to the future of business

This post dreamed of things that were not and asked why.  So since there were plenty of untitled properties begging for development, this post answered that call.

1.  This post tried to negotiate for a 3.5 hectare property near a convention center.  The property is owned by the son of the late friend developer,  To show our interest we lent PHP to the owner.  However, it turned out it was a no go since his brother preferred to sell.  We had the mayor and MPDC pre approve this but now we are left hanging.   The agents assured that we can have this titled.   No title no LTS from DHSUD.  Its going to be an illegal project without LTS

2.  Substitute projects also untitled were forwarded by the agents   One was 2.9 hectares and located at a trail road, which was steep, and the other was 2.1 located along the newly built highway.   The sites could serve roughly 80,000 population and had great overlooking views

      1.  The 2.1 hectare had two cases one in USA, the other here in RTC Antipolo.  The owner is a US

           citizen (a  red flag)  He signified his intention to go on Joint Project.  However the papers were                not delivered early to to me as promised

     2.  The 2.9 project.  It was represented that the decision was to be made by former suppliers.  However it turned out 6000 sm was owned by them.  The 2.2 hectare was owned by step brother who lives in neighboring province He had a stage way of doing business ie for us to make an offer though  did not have the documents

3  The titling and the Guido case:

     We were supposed to meet the persons who could answer the questions on Guido case titling via

free patent:   RA 10023 (Public Lands Act)   RA 11322,  RA 11571.   

      For Guido case the lady Guido was cutting me off, despite the fact that we were there to ask questions.   She was emphatic that they owned the large estate, and under the SC ruling she could ask the LRA and DENR to withdraw titles that have been previously issued.  

     The DENR that we were supposed to meet was not there.  There is no more meeting

     I just asked for a sample Free Patent that was issued brokered by the facilitator that showed:

Guido had issued the applicant with the a waiver, the OCT issued by DENR. This would settle the doubts about the additional expense (which is substantial) to erase all the doubts about the titling  He hesitated and said later and neutralized the request, by saying what use will it be anyway if we dont believe.   He also decried that assigning another party to be convinced to make the final say which is an illogical way of parrying the points being raised.

4.  The actions character of the facilitator

     Red flags and alarm bells were ringing:   The facilitator could not be trusted:

    1.  He was late for appointment

    2.  He misrepresented often:

         1   In the 2.9 property, he mentioned that we were meeting on ministerial way as the elders have

         decided

         2.  That in the case of DENR, we would meet them yesterday, there was none

         3.  That we could ask questions but this post was cut off by the Dona

         4.  He would send docs by gmail but did not

    3.  He often would say we should decide soon, or how should we answer the other party knowing 

          fully well what the problems well

    4.  He had the habit of putting this post on edge which borders on attack on my personality:

        1.  Why did I pass on the decision making to someone else?

        2.   Why am I wasting his time (he made the business proposal)

        3.   Why dont you consult the lawyer if you do not believe.   

Well I was hopeful that we can give him a chance.  I was willing to help him in other business deal.  Disregarding that he spent some time behind bars for violating RPC 315!

    5.  He asks advances and money up front.  Even for a meeting -  A VERY VERY RED FLAG

    6.  He often plays this post against other business acquaintances, and to disregard on going transactions:

        1.  He was approached by Brilliance (a possible ML ) who would eat him up

        2.  A very wealthy realtor who is in to very large real estate development who would finance

             his project

        3.  He has a P500 million deal for the payment of the road way for the Manila East road for the

             Guidos.  ENOUGH playing this post against others.  Not in a mood for contest of egos and

              wealth

I am glad its over.  This business episode has caused a lot of thinking and worries on my part.   

    

Downside of franchise - owning a franchise can go south!

Looking forward to the future of business

Buying a franchise does not guarantee success.  The franchisor  exercise a great deal of control over the franchise.   You are obliged to follow their process, their menu.  

There is no substitute for doing the business plan yourself.

Business is hard work, hard work,  Hard work.   

Success from having a franchise is an illusion.  

All tasks all deals must have closure if possible, face to face

Looking forward to the future of business

A deal we had last May for a possible joint project lay in still waters because of displeasure from our side on the other side nasty remarks at the GC.   And informally some assumed the deal was off.

However I elected to travel to the location of the other side the principal, for formal closure.  We started this face to face, we will end this face to face.  So this post took a 7 hour journey to speak with courage to the other party that the project with us is over. 

Becoming more risk averse

Looking forward to the future of business

The site looks very nice.  It is accessible via a wide avenue and only 2.5 km to the main highway.   The site is fantastic - it is overlooking.  It is untitled though.

And when I asked the persons who control the purse string, they were leaning heavily on the risk:  What if  the supposed Estate owners run after the project and sue us?   Thats the big risk.  On Wednesday, we evaluate the risks some more.  If the fear is justified, what will happen?

Excellent management by the pilot of an aircraft to ensure comfort and safety of passenger

Looking forward to the future of business

This post loves to read stories about aviation and air tragedies - air crash investigation.   Most of the tragedies would have been avoided if the pilot practiced good communications with the first officer, ATC, observed company and good flying practices, followed the ATC, had good situational awareness:  fuel, condition of flaps, landing gear, of propellers pitch.

In one story, the plane crashed, a propeller driven airplane because the pilot mistakenly pulled the feather lever, when it was about to land, and had no power upon landing and crashed.  

One crashed because the captain disobeyed  the order for it to reduce altitude by observing the holding pattern.  Instead he disregarded the holding and went straight and was thus landing too steep an angle and too steep.   The pilot and the first officer were not communicating (which was the norm - always verifying)  The pilot had this habit of disregarding procedure and should not have been allowed to fly.  Thus insubordination is a dismissible offense

Be aware of supervisors and staff who do not observe procedures, and/or who fail to communicate

Be at the gemba, do it now!

Looking forward to the future of business

Despite being in dire situation now because of prolonged recession, Japan during its heyday, had some of excellent management ideas.  One of them is being at the GEMBA - at the workplace - at the shopfloor or selling area.  It is another term for MBWA -  Management by Walking Around   Some FMCG manufacturing companies hold their board meetings at the end of a manufacturing line where they examine the product do the taste test.  Probably, they do too at  supermarket shelves at point of sales.

This was a striking contrast to the lady head of  security service of govt office in US who was grilled by party mates of injured candidate in an assassination attempt.  She was  ridiculed  and bullied for:

1.  refusing to answer, 2.  that somehow she doesnt know yet,    3.  that the situation was still being investigated (after nine days)   4.  inconsistent with her statement before hand that buck stops at her office.

A pastor in same state where the assassination attempt took place went to the Gemba - at Butler to see for himself the rooftop where the gunman went up.  He saw:   the roof slope was not that steep -  it rose only probably a foot from the edge.  The distance of the roof was that close in actuality.  Probably much closer than 140 yards and potshots can be taken.  LACK OF SITUATIONAL AWARENESS for security personnel and officer the head who has the ultimate responsibility.  

Thus its accountability and responsibility for managerial and supervisory position that actually count, at the end  of the day.  

Be at the GEMBA.  Be aware.  

The one page memo

Looking forward to the future of business

The famous one page memo at P  & G

I used to have classmates and friends who worked before with P & G who were trained hard on these one page memo.   The classmate happened to be brand assistants, the core of brilliant hard working marketers who plan the launch, revival, or turn around of brands.  They are also called category assistants/officers/managers now.  The discipline is still the same  the channels have changed into variouus platforms.

In that one page, the assistant will summarize the situation - market, competition,  the brand SW, 

and recommend action to the President regarding the brand with summary of PNL, new sales, new %, and budget to carry out the task.   How could these fit into one page.  

That is the way it should be.  Business deals are closed on napkin or paper placemats of resto or fast food, and they are closed on a handshake.

If it is too long and complicated, it cant be done.    You should be able to explain what to do to your kid. If they cant get it, it cant be done.   Simplify, simplify.  That is the task of a manager, knowledge worker.

This post believe in one page memos

This post remembers an ex P n G, the last time I heard he is the head of  a household cleaning products, who riled vs the one page memo and he was on the nth draft (he graduated with Latin honors and cant be poor in his grammar) and was ready to resign.   It was lucky that his nth draft got accepted.   Perhaps the rewrites gave him a diP n G one page memoscipline to think clearly.   

I remember doing financial analysis on several pages of worksheet (and this was before excel) just to get a one page finance recommendation., deep into the night.   This enabled me to cut through financial mumbo jumbo.  

Did Taiwan take away US chip business? TSMC to invest $40 billion in Arizona USA plant

Looking forward to the future of business

Fmr President Donald Trump mistakenly accused Taiwan of taking away chip business from US.  While partially correct -  TSMC founder was a former executive of Texas Instrument who went to Taiwan to put up chip business at Taiwan's behest, its incorrect.  TSMC also plans to put up a plant in Arizona USA.  Trumps comment, including the threat that Taiwan should share in its defense cost with US send tremors to the stock market. TSMC continues to make record profits.

Do you agree with Donald Trump's comments.?

Philippines - a great place to do business

Looking forward to the future of business

Let us do business in the Philippines.  A great place to do business:

1.  Strategically located in South East Asia along sea routes.

2.  Excellent port facilities

3   Large growing population (Japan, Korea have aging population)  - easy sourcing of HR

4.  Meaning it has large domestic place

5.  Nice beaches and resorts

6.  Nice resorts and casino hotels

7.  Robust economic growth among Asean countries. (and even vs China)

8.  Plenty of arable land (80% still unutilized vs say Singapore only 1% available agrii land)

No longer sick man of Asia.  Just a growing economy.  Not a tiger or leopard

Steel Asia to invest P80 billion in 5 steel mills in the Philippines

Looking forward to the future of business Stee

Steel Asia which is celebrating its 50 years announced that it will invest P80 billion in five steel mills:

     two in Davao

     one in Lemery Batangas

     one in Concepcion Tarlac

     one in Candelaria  Quezon (saw their vehicles in Candelaria when I went there)   

This has huge impact on Philippine economy about jobs, steel supply chain.  It will save PHP and dollars in importation of steel for construction, manufacturing, machinery.  This is long in coming and finally after IISMI debacle we will finally be self sufficient in Steel

Thank you, Steel Asia,  Kudos for taking this bold move/investment   

Are casinos good/moral businesses? All Philippine tycoons have one.

Looking forward to the future of business

Early on, when a fellow professor consulted us on a board game, I objected to a lotto being a part of entrepreneur journey.   Being entrepreneur must not be at probability level, or a business should create value to customer or society

Gambling or lottery is a dignified Ponzi scam,  You get rich at the expense of others + some profit to the operator.  And just to think of social costs.   Suicides, gambling addiction.   Poverty to the family of the gambler.   Loss of productive time   Plus the attendant other vices:   alcoholism, prostitution, mugging, robbery and the like

Gambling cities in US become static after sometime and not enough progress is achieved.  Take Vegas or Atlantic city.  They do not have the dynamism and grown of say Silicon Valley, Texas, Boston, San Francisco .  

In the Philippines, casino resorts rake in billions for Pagcor, the government, and the owners.  Almost every tycoons:   Razon, SM, Robinson has one.    Most are either at MoA or at Clark.   Casinos haven

If you have billions, would you invest in casinos.  ?

Can the Phil govt pay back its P15 trillion debt?

Looking forward to the future of business

The video said there is nothing to worry about.  Its a lot of mumbo jumbo.  

The total debt is divided into:   P10 trillion local debt and P5 trillion foreign debt.  This is riskier.

because of limited FX and very low interest rate at 0.01 %.    And is therefore affordable

And also look at FX reserve of Philippines.  which stands at  $100 billion or P5.8 trillion.   

But its worrisome too.   At say  3% for foreign, and 6.5% domestic debt, debt service would be 

         P5 trillion   x 3%     =  P150 billion

         P10 trillion x 6.5%  =  P650 billion

         Total                              800 billion

How much of the BIR collection      How much did BIR  collect in 2023 - P2.5 trillion

Debt service would roughly be 30% of local revenues.    That is a lot.   

And our govt managers are borrowing like crazy to finance welfare and other non productive enterprises.   We should be aware