opinion

BSP's Guinigundo bids goodbye to the public service

July 1, 2019

41 years after he joined government, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo bows out of the public  service tomorrow (July 2), having reached mandatory retirement age.       His retirement comes a day short of BSP’s own 26th anniversary.       The “passionate presence” of DG Diwa, as he is fondly referred to at the BSP, will sadly be missed.       Having worked with him during my past term as monetary board member (MBM)  of BSP, DG Diwa struck me as a great communicator.       He was  the  go-to official for explanations of the BSP's policy moves or positions on different economic issues. Gifted with the uncanny ability to simplify and communicate the most technical of economic concepts, he  was one of BSP’s most valuable assets in bringing central banking closer to the people.       Finance Secretary Sonny Dominguez, who sits In the monetary board, credits DG Diwa, “the consummate monetary policy economist”, for “pushing for measures to boost economic stability and inclusive growth. He was also instrumental in the establishment of Asean initiatives including peer review and BOP support mechanisms.”      MBM Jun de Zuniga says:  “DG Diwa is the eminent bibliographer, authority and history of the monetary policies of the BSP, its Philippine peso currencies and even on the artifacts and art collections of the BSP. This formidable talent is backed up by his 41 years of unqualified dedicated service, excellent academics and superior leadership qualities. Truly he serves for God and Country.”       MBM Peter Favila  describes DG Diwa as  “a formidable force in central banking… both for stirring (sometimes vigorously) the policy discussion within the BSP, as he never shies away from a healthy debate among colleagues and staff, and in raising the BSP profile in the the international central banking community. His intellectual heft is matched only by his passion for mentoring and ensuring his people are well equipped and ready to take on the challenges of the New Economy.”        “Immeasurable” was MBM Tony Abacan’s assessment of DG Diwa’s impact to the BSP. “His international engagements helped put the BSP amongst the “looked up to” central banks in the world. His institutional memory having worked with the BSP for more than 40 years and his innate technical knowhow about the economy and beyond, provided more engaging and meaningful discussions at every meeting of the Monetary Board.”       Abacan was referring to DG Diwa’s  international engagements, as follows:      In 2001-2003, DG Diwa  was Alternate Executive Director in the Philippines’ constituency at the International Monetary Fund in Washington, DC. Earlier he was Head of Research at The SEACEN (Southeast Asian Central Banks) Centre in Kuala Lumpur in 1992-1994.       Since 2000, DG Diwa  has co-chaired with Bank Negara Malaysia the SEACEN Experts Group on Capital Flows and in 2010-2013, the ASEAN Senior Level Committee on Financial Integration. He also chairs the SEACEN Task Force on SEACEN membership.       For the period 2009-2012, he chaired the Executive Meeting of East Asia and the Pacific (EMEAP) Monetary and Financial Stability Committee of EMEAP central bank deputies that are tasked to conduct regional and global surveillance.       Guinigundo  received his AB Economics degree from the University of the Philippines in 1976, cum laude, and earned his MS in Economics from the London School of Economics and Political Science as a Central Bank scholar. At that time, he also obtained his Marriage Degree when he married another Filipino scholar, who became Mrs.  Apple Guinigundo.        He began his career in public service as senior manpower development officer at the Department of Labor’s National Manpower and Youth Council.       From there, he moved to the Central Bank and has served it ever since.      When Guinigundo  took over the Monetary Stability Sector (MSS)  from Governor Say Tetangco in 2005, the sector was newly realigned and included the Monetary Policy Sub-sector, the Regional Monetary Affairs Sub-sector, Monetary Operations Sub-sector, and Cash Management Subsector.      He was likewise given administrative supervision over the  Corporate Affairs and Corporate Planning Offices.       A research guy,  DG Diwa   worked the ranks of the research sector up to the Managing Director level.       He headed BSP’s Department of Economic Research (1994-2000) at an exciting time—when BSP was starting to lay down the groundwork for the shift of the monetary policy framework from monetary aggregate targeting to inflation targeting.       The MB approved the transition in 2000 until it was formally implemented in 2002 after a series of public consultations all over the Philippines.      Among his  other responsibilities , DG Diwa  also chaired  the Committee on Artworks and Paintings, fully supporting the production of two art books featuring the BSP gold and painting collections. He was also chair of the Currency Management Committee and the Numismatic Committee, the last two in which I also served as Board Advisor.       Good job, DG Diwa.  You have struck  a very healthy  balance between your oversight of the BSP’s primary responsibility of maintaining price and monetary stability, your ministry of the Gospel and your  successful  family life.       Note: Please feel free to share the foregoing article via Facebook and/or Twitter.

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The Japanese model of longevity

July 1, 2019

What will it take for some family businesses to go on for centuries while others succumb and die early? My quest for corporate longevity continues and my research has led me to the land of the rising sun, Japan.       We are experiencing an era where it is hard enough to keep an organization running for a decade. Therefore, being competitive is no longer a powerful leverage against the onslaught of a volatile, wired and borderless marketplace. With new jargons being invented like disruption, millennial market, IOT (internet of Things), block chain, YOLO (you only live once), the watchword has now pivoted to not just being relevant but resilient. The latter fundamentally means several notches higher than survival.      So how did Japanese family-run businesses not only managed to stay afloat and survived for centuries? Authors Hendrik Schwartz and Prof. Dr. Marc-Michael H. Bergfeld raised an even difficult and challenging contention: how do you stay relevant and resilient when your business is over 400 years old and already in the 15th generation? How can you transition to a complex and multi-generational period and get confronted with hundreds of family members, each trying to outdo one another to promote their respective interests?      In their research, the authors clearly concluded that the “Japanese social value system is very different from its Western comparisons and also dissimilar to its continental Asian counterparts.” They pointed out that the Japanese model “entailed strong cultic features and a very strong corporate identity that permeates every aspect of company life and most importantly – and for many people unknown – a substantially different system of family guidance and administration, that has continued to define the nature of Japanese society since the Edo period.”      They went on to identify that the “ie” system, a patrilineal household, is at the core of the traditional Japanese family. It is a very complex kinship unit, a very complex multigenerational family system that is based on primogeniture.       In this particular system, only one child inherits. All of the other children in any generation are expected to eventually leave the family and go establish themselves in some other family or some other social institution. The chosen successor, usually the eldest son, inherits the family, everything to do with the family, and the rest of the children have to find their own way in the world. The “ie” system lineage is important and meticulously recorded. In theory, the “ie” should last forever and in principle never dies as it embodies all of its deceased and future members.       In his book, The Living Company, Dutch business theorist Arie De Geus analyzed 30 centuries-old businesses for common traits and this includes several enterprises in Japan. De Geus attributed their success to four commonalities:      1.    Long-lived companies were sensitive to their environment and remained in harmony with the world around them.      2.    Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees (and even their suppliers, at times) felt they were all part of one entity.      3.    Long-lived companies were tolerant and generally avoided exercising any centralized control over attempts to diversify the company.      4.    Long-lived companies were conservative in financing. They were frugal and did not risk their capital gratuitously.      To be continued...       esoriano@wongadvisory.com

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Feng shui for reviewers and exams!

July 1, 2019

Yes there is feng shui to review for and pass competitive examinations - professional regulatory licensing or even elementary, high school, college, masters degree tests up to getting a driver's license!      Let us review the key tips together now:      Mental conditioning - to achieve a balanced wellbeing and be in good health, when studying, sit by charging your spine or chakras (life energy centers) with the back of your chair towards your lucky direction! And to be in good health with restful sleep always sleep in the same direction with the orientation of your headboard. Eat, and work in the same manner! Exercose om the gym or anywhere likewise.      This increases your mental alertness, reception and retention of memory aside from clarity of mind for understanding the lesson or subject on hand.      Physical conditioning - make sure the feng shui orientation of your bedroom door, study or review area, kitchen layout of cooking appliances, like the bedroom and study table are in conformity with your proper feng shui as professionally advised by a genuine feng shui expert or master.      Wear your lucky colors, use it in the interiors of your bedroom or review quarters, and especially on the day of the examinations, if wearing uniform at least as underwear(s)!      When taking exams orient yourself as much as possible to similar lucky orientation directions per feng shui for flexibility, alertness, concentration and mental acuity and dynamism!      Eat wholesome balanced diet for physical conditioning especially the day and night before the exams. Never engage in mental drug stimulants, alcohol or alternatives like energy drinks that may hamper your good chi or balance of life energies by causing disease or dis-ease that distracts your focus of mind and understanding as well as comprehension.      Beyond feng shui, good writing skills even penmanship will be of great help in communicating your answers clearly with brevity.      In most instances, some opt to stay with a study group or review team in a quartered area apart from the usual house they stay in. They should have the place feng shuied for superb results, otherwise it may hamper success factors especially when it comes to health, and emotional wellbeing. Fear may set in due to bad feng shui decors ie, hotel or room artworks and other bad feng shui factiors (ie distractive romantic affairs, illicit or not!).      The usual read, recite, review and even rewriting key note points aid in understamdomg amd retemtion skills!      Now to the last feng shui tip: lucky charms! These work only if the above conditions outlined are fulfilled accordingly with proper feng shui guidance from a real geomancer.      Use of Crystal Charms - one may opt to use a globe etched crystal ball for greater concentration and understanding thereby allowing a competitive edge when it comes to technical knowledge and applications! This is the superb amulet of all to be used atop study table, carried in school or handbag during exams. If not available in your area, a clear quartz crystal will do as a substitute.      Strategic Feng Shui Review and Exam Positioning - if you want excellent scholarship benefits of review and competitive examination taking, position yourself during review and tests facing towards the northeast angle (bring a compass) or its opposite southwest. This attracts global understanding and knowledge beneficially.      Again use your lucky color in wardrobe or if allowed, ink of pen color!      Lucky Food to eat during review sessions: peanuts as food for the brain holds true even in feng shui traditions.      So there, read, recite, review and rewrite what you understood of this article so you will be able to practice it diligently and apply it to your success in examinations or tests!      No need to cheat, cheer up and good luck for the rest of your journey in academic and professional examinations for the rest of your life, whether in preschool now or graduate school or reviewing for the bar or nursing, mechanical engineering, whatever! Kong hei exam results!

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Malaysia AirAsia could become SE Asia's largest airline in 2019

July 1, 2019

AirAsia has regained market share in its original home market of Malaysia after accelerating short haul expansion. Malaysia AirAsia’s in-service fleet has expanded by 10 aircraft this year, driving 17% seat capacity expansion as utilisation and average seat density have also increased.      Malaysia AirAsia’s market share in Malaysia has exceeded 40% for the first time this year as it has benefitted from capacity reductions at Malindo and Malaysia Airlines. As a brand, AirAsia will account for nearly 55% of all passenger traffic in Malaysia in 2018 when an 8% share for Malaysian long haul LCC AirAsia X and approximately a 5% share for the group’s overseas affiliates are included.      Malaysia AirAsia is planning more double digit capacity expansion in 2019 as it adds another five or six aircraft, including its first A321neo. The short haul LCC is planning to deploy the A321neo on high frequency routes, resulting in a 28% seat capacity increase compared to the A320ceo, or a 24% increase compared to its new A320neo fleet, without having to mount additional flights.

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Family unity is at the heart of Christmas

June 28, 2019

Working over the holidays is a fact of life for most entrepreneurs and their active family members. And with that reality comes the stress of business and family vying for your attention. What can you do to find a happy balance at holiday time? As a business leader how do you manage emotions as a result of so many factors.       Emotions cannot be avoided and can aggravate conflict in the family and business. I am also aware just how much of a burden entrepreneurship can take on the active family members. Understandably, December is a time when many family businesses begin closing the annual books - and family members who had all year to dream about hefty dividends often get disappointed when they realized to their dismay the numbers do not add up.  Dividend Sharing can be a Major Source of Conflict      Stress due to expectations of a bigger dividend share and discovering that the value is smaller can easily be a source of tension. Especially when you worked so hard and the sharing is equal among working family members.  In my coaching work all over Asia, I have learned over many years of advising family owned enterprises that there are several effective strategies you can use to take the pressure off and I’m happy to share them below to serve as a guide for every family member wishing that the holiday season can be a wonderful occasion to finally bring peace and unity within the family.  No. 1 Family Unity above Self       For starters, every family member must look at the big picture and be reminded that family unity must be the overarching value over ANYTHING! Those who feel aggrieved must never forget that whatever hurts they are going through must give way to a mindset that espouses stewardship and a vision of a happy, secure future for all family members.  No. 2 Create a Growth Vision to Inspire the Next Gen      The key is if you want your family to understand stewardship and unity, you have to have some open, honest discussions about the future. I am in Singapore now and a couple of families from other countries flew here to meet me precisely to reinforce the importance of family unity and vision. When there is family unity, harmony follows. When there is a powerful vision, growth naturally follows.      On top of a governance compass that we crafted two years ago, we also created a succession process on how to transition the successful business to the next generation set of leaders comprising five adult children. No. 3 There is No Success without Succession      Succession can be a complex event but when there is ample time to prepare, the transition and wealth transfer phase can be a wonderful and joyous event for the family.  To quote Montxu Aboitiz, a 4th generation member President and CEO of listed firm Aboitiz Equity Ventures (AEV):      “We have passed the baton down seven times since the company’s beginnings in 1889. Sustainability is key in the company and that AEV has always taken very seriously the capability to pass the company down generation to generation.”      The 130 year-old Aboitiz family runs one of the largest and oldest conglomerates in the Philippines. They have a constitution to ensure the sustainability of its wide range of businesses and have strictly followed family governance rules that is why they continue to reap the benefits of a successful business generation after generation.        To be continued...       esoriano@wongadvisory.com

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Soriano: Ignorance is More Expensive than Education

June 11, 2019

There are many proverbs to describe the challenges faced by family businesses in building wealth and leaving a lasting legacy. The Chinese say “wealth never survives three generations,” while the Italians say “from the stables to the stars and back to the stables.” Their languages may vary, but the behavior offers a lot of parallelism. On a positive note, there is also a Chinese proverb stating that one has to govern his family as you would cook a small fish – very gently.  And the saying highlights one thing...the need for leaders to focus on "people and intellectual assets." We refer to these assets as talent within the family that can help preserve wealth and promote stewardship.   One good example that leaders must do is to eliminate next generation entitlement like not spoiling children who will be future successors of the business.  The key is to teach them the value of money and encourage them to study hard and prepare themselves for future leadership roles.  All over the world, the story is the same: entrepreneurs start from nothing and build a business; their children maintain the business – and a wealthy lifestyle; their grandchildren grow up in affluence and lack the inclination to work and be responsible – and end up losing the business and the wealth. To quote family governance advocate Gale Petronis “in a family business, it’s the third generation that presents the big problems. The first generation founds the company and has the drive and the dedication to move it forward. The second generation rides that wave. The third generation wants to do their own thing. They’ve seen Broadway; they’ve had all the advantages.” “Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it.” This classic quote by George Orwell can apply in family businesses as well as life. But traditional family businesses make the mistake of focusing on a single family unit and neglect a very crucial transition to a multi-generational and extended family phase. What would happen if your family prepared a plan for the next four or five generations? Should it be better if you think way beyond your generation?   A couple of years ago, I initiated a plan for a family business based in Singapore where the patriarch at 72 specifically requested that I help the family craft a family plan spanning 30 years! The year after, a colleague based in Hong Kong requested me to collaborate with him in preparing a family growth plan covering 50 years! I admire remarkable leaders that think beyond their lifetimes! There are specific tools and guidelines that family businesses can follow to help them succeed through generations and family business expert John Davis opines that the ‘secret sauce’ of long-term business success can't be captured in numbers but through three main ingredients: Growth, Talent and Unity. These ingredients are inextricably linked to enhancing human assets. Growing the wealth by focusing on family development refers to strengthening family functioning as a foundation for the preservation of family wealth. That way, each succeeding generation can become another “first generation” – bringing some form of survival instinct, creativity, dynamism, drive and maturity to the enterprise. I will end this article with a powerful quote from Ben Franklin, “the only thing more expensive than education is ignorance.

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