Nice Read - A Reason or Excuse To Be Optimistic
Today, I am going to tell you mostly good news....
The Philippine economy is growing at its fastest rate today in the last
quarter century. It has grown by an average of 4.7 percent per quarter
consecutively over the last 22 quarters. This is the highest growth ever
over the longest period since the post-war. This means that economic
production has increased by 25 percent, in real terms, in the last five
years.
During the same five-year period, the population grew by 13 percent or
by ten million Filipinos. In other words, economic growth now outpaces
population growth at a ratio of two to one.
This means that in due time, the economy will be able to feed, educate
and clothe the population that has been born and the population still
to be born. Families can actually multiply without fear of burdening the
economy.
Twenty-two consecutive quarters of positive growth. That's five and half
years. The economy had never grown so fast and for so extended a period
of time. Until now.You may ask: Why is the economy growing so fast? The
answer is that the sectors of the economy that should deliver value
added
are all growing - services, agriculture, industry and manufacturing.
adding vibrancy to these sectors is consumer spending and the rise of
cellular technology. In 2005, agriculture grew by 1.8 percent; industry
by 4.85 percent, and services by 5 percent. Services now accounts from
53 percent of the total output of the economy. What's services? Thats
telecommunications. Transportation. Banking. What's telecommunications?
That's cellular phones and text messaging. Internet mailing and gaming.
Even banking is all about computers and the telephone. How can you
account for ATMs but for the computer and the telephone.
In 2005, of the total production of the domestic economy, on the
expenditure side, of P5,418 billion or 5.4 trillion pesos, personal
consumption expenditure or PCE accounted for 3,773 billion pesos or
P3.77 trillion, 69.6 percent of the total. Government consumption added
another 525.7 billion pesos or 9.7 percent. So consumers and the
government are providing Filipinos 79.3 percent of the economy on the
consumption side.
This means both consumers and the government have money. Government has
money because of the dramatic increases in tax rates, especially of the
value added tax, and in the efficiency of the government tax machinery.
Because of computerization, the incidence of the tax avoidance and the
tax evasion has been markedly reduced. Taxpayers today pay an average
of 20 percent of their income as tax. It used to be zero.
Consumers have money because of OFW remittances, which amounted to $10.7
billion in 2005. That's money remitted thru the banking system, about
P588.5 billion. It is believed the P588 billion represents only 80
percent
of the total remittances. Actual remittances could be as high as $12.8
billion or P706 billion. Where did all that money go?
In cellular phones and e-loading for text messaging. Today, 98 percent
of the 7,107 islands of the archipelago are linked, wirelessly, by
cellular phones. For the first time ever, you can say the country is
united, by technology, by information technology. For the first time,
the country is united by one medium, the cellular phone, and by one
message, that coming from the text messaging.
One hundred ten million messages are sent out everyday by Filipinos.
that's 40 billion text messages a year. This makes us the text capital
of the world.
Today, eight million Filipinos are connected to the Internet, almost ten
percent of the population. Another 3.5 million are linked thru
friendster,
the chat web site. There are 38 million cellular phone owners, about 45
percent of the population. 38 million or 45 percent is not to be sneezed
t, considering that it costs at least P4,000 to get a cellular phone.
That amount is almost eight percent of the per capita income of P53,000
per year.
If you multiply P4,000 by 38 million, you get the figure P152 billion.
That's the amount of fixed capital investment made by the Filipino
consumer in cellular phones, on the equipment side alone.
In 2005, PLDT became the most profitable Philippine company with
whopping
profits of P34.5 billion - the biggest for any company in our corporate
history. Sister company Piltel made P13.45 billion. Rival Globe Telecom
made P10.3 billion in profits.
Abroad, the most profitable business is energy, oil. In the Philippines,
the most profitable business is cellular phone. In 2005, the three phone
companies, PLDT, Piltel and Globe made together P58.22 billion in
combined profits - or 29 percent of the P200 billion combined profits of the 100
most profitable companies listed in the stock exchange.
Did you know that between July 8, last year when the Hyatt Ten resigned
and July 8 this year, when President Arroyo has not yet resigned, the
stock market created a whopping P2 trillion of wealth?
Why? Because business has been good. Companies are registering profits
on a scale they have never experienced before. PLDT 34 billion pesos.
SM Investment P10.4 billion. Ayala Corp. P10 billion. San Miguel P8.97
billion. Why are these companies making so much money? Because of
telecommunications, specifically, wireless phone. And because of
consumer spending.
That is why today, the richest Filipino is Henry Sy, the retailing
tycoon.
He is worth P100 billion, according to my computations. The second
richest?
The family of Augusto Zobel de Ayala. He is worth P49.57 billion. The
third richest? This is surprise. Manuel V. Pangilinan, the chairman of
PLDT. MVP is worth P49 billion, richer than George Ty, No. 4 with P44.5
billion, and Eduardo Cojuangco, Jr. No. 5, What about beer, tobacco and
airline Taipan, Lucio Tan, who for many years, the Forbes Magazine has
ranked as the richest Filipino? He is no longer the richest Pinoy. He
is only No. 6 with 35 billion.
How did the rankings change so drastically? Because consumer spending
habits have changed drastically. Food is no longer the No. 1 consumer
item. It is cell cards and e-cards. People are buying less cola, less
beer, less cigarettes just so they can save money to buy a cell phone,
a SIM card, and an e-load.
This morning I came from a lecture by McCann Erickson on the activities
of the Filipino teenagers. The Filipino teenager is connected,
virtually.
In the McCann survey, text messaging and using the computer for games
and the internet together is now the No. 1 activity of the Filipino
teenager. Window-shopping is now a poor second.
In 2005, according to McCann, 40 percent of Filipino teenagers had for
their usual leisure activities, text messaging; followed by 38 percent
playing computer and video games; window shopping 36 percent; and email,
surfing or chatting on the net, 27 percent. Five years ago, the
comparable ratios were 22 percent window- shopping, 12 percent text messaging, 17
percent playing computer and video games, and 13 percent emailing,
surfing or chatting on the net.
In five years, text messaging increased 3.3 times to 40 percent; playing
computer video games increased 2.2 times to 38 percent, and email or
surfing the net increased two times to 27 percent. In other words, all
these
activities doubled in frequency while that of shopping declined, from 22
percent of teenagers in 2000 to 36 percent in 2005. McCann says Filipino
teenagers now spend more on internet cafes, prepaid phone cards and post
paid cell phone bills, while trying to economize on food, beverage,
personal care, transportation, clothes and reading materials.
That is why sales of Coke are down, sales of hamburgers are down, and
clothes shops are having sales regularly instead of occasionally. This
is why in sari-sari stores, the best-selling item is not milk not
coffee, is not sugar, is not sardines, is not cosmetics. But prepaid phone cards
and e-loading cards.
Tony Lopez
Publisher
BizNewsAsia
The Philippine economy is growing at its fastest rate today in the last
quarter century. It has grown by an average of 4.7 percent per quarter
consecutively over the last 22 quarters. This is the highest growth ever
over the longest period since the post-war. This means that economic
production has increased by 25 percent, in real terms, in the last five
years.
During the same five-year period, the population grew by 13 percent or
by ten million Filipinos. In other words, economic growth now outpaces
population growth at a ratio of two to one.
This means that in due time, the economy will be able to feed, educate
and clothe the population that has been born and the population still
to be born. Families can actually multiply without fear of burdening the
economy.
Twenty-two consecutive quarters of positive growth. That's five and half
years. The economy had never grown so fast and for so extended a period
of time. Until now.You may ask: Why is the economy growing so fast? The
answer is that the sectors of the economy that should deliver value
added
are all growing - services, agriculture, industry and manufacturing.
adding vibrancy to these sectors is consumer spending and the rise of
cellular technology. In 2005, agriculture grew by 1.8 percent; industry
by 4.85 percent, and services by 5 percent. Services now accounts from
53 percent of the total output of the economy. What's services? Thats
telecommunications. Transportation. Banking. What's telecommunications?
That's cellular phones and text messaging. Internet mailing and gaming.
Even banking is all about computers and the telephone. How can you
account for ATMs but for the computer and the telephone.
In 2005, of the total production of the domestic economy, on the
expenditure side, of P5,418 billion or 5.4 trillion pesos, personal
consumption expenditure or PCE accounted for 3,773 billion pesos or
P3.77 trillion, 69.6 percent of the total. Government consumption added
another 525.7 billion pesos or 9.7 percent. So consumers and the
government are providing Filipinos 79.3 percent of the economy on the
consumption side.
This means both consumers and the government have money. Government has
money because of the dramatic increases in tax rates, especially of the
value added tax, and in the efficiency of the government tax machinery.
Because of computerization, the incidence of the tax avoidance and the
tax evasion has been markedly reduced. Taxpayers today pay an average
of 20 percent of their income as tax. It used to be zero.
Consumers have money because of OFW remittances, which amounted to $10.7
billion in 2005. That's money remitted thru the banking system, about
P588.5 billion. It is believed the P588 billion represents only 80
percent
of the total remittances. Actual remittances could be as high as $12.8
billion or P706 billion. Where did all that money go?
In cellular phones and e-loading for text messaging. Today, 98 percent
of the 7,107 islands of the archipelago are linked, wirelessly, by
cellular phones. For the first time ever, you can say the country is
united, by technology, by information technology. For the first time,
the country is united by one medium, the cellular phone, and by one
message, that coming from the text messaging.
One hundred ten million messages are sent out everyday by Filipinos.
that's 40 billion text messages a year. This makes us the text capital
of the world.
Today, eight million Filipinos are connected to the Internet, almost ten
percent of the population. Another 3.5 million are linked thru
friendster,
the chat web site. There are 38 million cellular phone owners, about 45
percent of the population. 38 million or 45 percent is not to be sneezed
t, considering that it costs at least P4,000 to get a cellular phone.
That amount is almost eight percent of the per capita income of P53,000
per year.
If you multiply P4,000 by 38 million, you get the figure P152 billion.
That's the amount of fixed capital investment made by the Filipino
consumer in cellular phones, on the equipment side alone.
In 2005, PLDT became the most profitable Philippine company with
whopping
profits of P34.5 billion - the biggest for any company in our corporate
history. Sister company Piltel made P13.45 billion. Rival Globe Telecom
made P10.3 billion in profits.
Abroad, the most profitable business is energy, oil. In the Philippines,
the most profitable business is cellular phone. In 2005, the three phone
companies, PLDT, Piltel and Globe made together P58.22 billion in
combined profits - or 29 percent of the P200 billion combined profits of the 100
most profitable companies listed in the stock exchange.
Did you know that between July 8, last year when the Hyatt Ten resigned
and July 8 this year, when President Arroyo has not yet resigned, the
stock market created a whopping P2 trillion of wealth?
Why? Because business has been good. Companies are registering profits
on a scale they have never experienced before. PLDT 34 billion pesos.
SM Investment P10.4 billion. Ayala Corp. P10 billion. San Miguel P8.97
billion. Why are these companies making so much money? Because of
telecommunications, specifically, wireless phone. And because of
consumer spending.
That is why today, the richest Filipino is Henry Sy, the retailing
tycoon.
He is worth P100 billion, according to my computations. The second
richest?
The family of Augusto Zobel de Ayala. He is worth P49.57 billion. The
third richest? This is surprise. Manuel V. Pangilinan, the chairman of
PLDT. MVP is worth P49 billion, richer than George Ty, No. 4 with P44.5
billion, and Eduardo Cojuangco, Jr. No. 5, What about beer, tobacco and
airline Taipan, Lucio Tan, who for many years, the Forbes Magazine has
ranked as the richest Filipino? He is no longer the richest Pinoy. He
is only No. 6 with 35 billion.
How did the rankings change so drastically? Because consumer spending
habits have changed drastically. Food is no longer the No. 1 consumer
item. It is cell cards and e-cards. People are buying less cola, less
beer, less cigarettes just so they can save money to buy a cell phone,
a SIM card, and an e-load.
This morning I came from a lecture by McCann Erickson on the activities
of the Filipino teenagers. The Filipino teenager is connected,
virtually.
In the McCann survey, text messaging and using the computer for games
and the internet together is now the No. 1 activity of the Filipino
teenager. Window-shopping is now a poor second.
In 2005, according to McCann, 40 percent of Filipino teenagers had for
their usual leisure activities, text messaging; followed by 38 percent
playing computer and video games; window shopping 36 percent; and email,
surfing or chatting on the net, 27 percent. Five years ago, the
comparable ratios were 22 percent window- shopping, 12 percent text messaging, 17
percent playing computer and video games, and 13 percent emailing,
surfing or chatting on the net.
In five years, text messaging increased 3.3 times to 40 percent; playing
computer video games increased 2.2 times to 38 percent, and email or
surfing the net increased two times to 27 percent. In other words, all
these
activities doubled in frequency while that of shopping declined, from 22
percent of teenagers in 2000 to 36 percent in 2005. McCann says Filipino
teenagers now spend more on internet cafes, prepaid phone cards and post
paid cell phone bills, while trying to economize on food, beverage,
personal care, transportation, clothes and reading materials.
That is why sales of Coke are down, sales of hamburgers are down, and
clothes shops are having sales regularly instead of occasionally. This
is why in sari-sari stores, the best-selling item is not milk not
coffee, is not sugar, is not sardines, is not cosmetics. But prepaid phone cards
and e-loading cards.
Tony Lopez
Publisher
BizNewsAsia
posted by jack galt at
4:45 PM
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