Weekend Tsunami

September 18th, 2008

As early as May, I wrote a column entitled “The Perfect Storm”, which was about the worsening crisis in America. In the month of July, my column talked about recession or depression.

Over the weekend, we saw two of America’s biggest securities and investment companies disappear – Merrill Lynch, which was bought by the Bank of America and Lehman Brothers, which filed for bankruptcy. This is one of the biggest news in the history of America’s financial world.

My previous columns have stated that America will be in for a rough sailing for quite sometime, and the problem is basically a fundamental issue of people spending beyond their means. In a way, the Asian culture of conservative borrowing and spending within their means is what will shield us from problems like what America is going through.

Living on credit is what Americans have been accustomed to. From house, car mortgages, travels and other expenses. The economy has grown on leverage. Now that Americans and companies as well are forced to de-leverage, this can lead towards a more serious recession. This will cause the whole world to suffer, as America has borrowed from the rest of the world.

The dollar has remained as the world’s currency. As Filipinos, our dollars are invested at the very least in the US treasury. This is now the time that we should even push for more growth. Emerging markets like Asia has a very low cost structure base, which will continue to give us that competitive edge.

In my past columns, I have stated that we need to lower interest rates to push more people to invest and to push more banks support micro and small businesses. The current global financial crisis is something that many of us have not seen much earlier. We do not know how long the effects of this crisis would last. But, we have gained experience from the Asian crisis, which caused a number of big Philippine banks to disappear or be merged with other banks. This crisis lasted for about three years in Asia, and a bit longer in the Philippines.

The government should continue to push for growth and business expansion. They should encourage and support micro, small and medium negosyos. With the passage of the new Magna Carta for Micro, Small and Medium Enterprises, we hope that greater help can be extended now even to microentrepreneurs (asset-based of less than P3 million), aside from the small (P3-15 million) and the medium enterprises (P15-100 million). The new Magna Carta has expanded it’s coverage to microenterprises and has adjusted the definition according to their sizes. It has also increased the mandatory allocation for banks to lend to this sector, from 8% to 10% of their loan portfolios (i.e., 8% for micro and small, and 2% for medium enterprises). It has likewise provided more alternative and relevant instruments that will enable the banks to comply, such as the inclusion of wholesale lending to participating financial institutions (PFIs) for on-lending to MSMEs, the purchase/discount of MSMEs receivables and the actual subscription to preferred shares of stocks of Small Business Corp.


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The RFM Corporation, together with the Philippine Center for Entrepreneurship – Go Negosyo, Ten Outstanding Students of the Philippines, and NAMFREL, will be giving recognition to inspiring individuals or organizations who have exhibited the “YES THE FILIPINO CAN!” values and principles. This is RFM Corporation’s way of promoting the values of entrepreneurship, in celebration of 50 golden years in the industry. The “YES THE FILIPINO CAN! Awards” emphasizes a way of life as guided by a heart for the Filipino, a fighting spirit and positive attitude, an entrepreneurial mindset and a concern for helping the community in improving the lives of others. There will be two awardees for five categories in this search, namely: Agri-entrepreneurs, Entrepreneurs, Workers, Youth/Education, and People Empowering Groups. Nomination forms can be downloaded from the Go Negosyo website and can be sent to the PCE-Go Negosyo office at the 5th Floor of RFM Corporate Center, Pioneer cor. Sheridan sts., Mandaluyong City or may be sent through the Go Negosyo email on or before September 19, 2008.

This effort once again inspires us to recognize the selfless and inspiring Filipinos who we all consider the heroes of our time.


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As we head back from the province of Iloilo, we would like to thank the Ilonggo’s warm welcome to our Go Negosyo sa Iloilo. Close to 2,500 Ilonggos filled the Rose Memorial Auditorium at the Central Philippine University last September 12 to take advantage of the content-filled forum and expo we have prepared with our partners.

Go Negosyo also recognized Most Inspiring Ilonggo Entrepreneurs and Micro Entrepreneurs who rose from the challenges of life, serving as role models in their hometown. Together with Iloilo Business Club Chairman Tony Jon and VP Terence Uygongco, and the assistance of Governor Niel Tupaz, and Mayor Jerry Trenas, and our Go Negosyo advocates Gaita Fores (Cibo), Jay Aldeguer (Island Souvenirs), Illac Diaz (Pier One), we were able to bring to Iloilo the entrepreneurship advocacy.

Congresswoman Cynthia Villar likewise flew all the way from Manila to share the Senate President’s and her livelihood programs and how she can help replicate these in other parts of the country. Presidential Assistant for Western Visayas Dr. Raul Banias also attended our forum, together with co-organizers DTI Regional Director Dominic Abad and TSKI Exec Director Angel de Leon. Mrs. Judy Araneta Roxas also managed to grace our Go Negosyo sa Iloilo. She has been spearheading several livelihood financing and support activities thru the Gerry Roxas foundation.

Go Negosyo sa Iloilo had an interesting lecture series in the afternoon on entrepreneurship that kept the crowd, composed mainly of existing and aspiring entreps and business students in the province. Mindset change expert Ping Sotto and Entrepreneurs School of Asia’s Dean Pax Lapid shared their useful insights and tips. Enthusiasm was also the same with Jorge Wieneke, who spoke on guerilla marketing for MSMEs, with Daisa Peñafranca of DOST, Rey Ambao of TSKI-BDS, Joseph Idemne of WESVARRDEC, Lorena Yunque of TESDA Reg VI, Naomi Luis of DOST Reg VI, Alo Lacsamana and our TESDA and DOST partners in Region 6, who shared their ways of assisting entrepreneurs in product development. Valiant Bank President Ian Pama also spoke on Financial Literacy. Globe’s Aries Vasquez and PLDT’s Gabby Cui shared how mobile technology and IT solutions can increase the productivity of the MSME negosyos.

We would like to thank our major partners Iloilo Business Club, PLDT SME Nation, Smart Communications, Globe Business, Condura, RFM Corporation, Ariel, Entrepreneurs School of Asia, and San Miguel Corporation.