A collection of ads I like and those I created as an adman. In between are some of my published articles about dreamers, achievers, those who reached for the stars, interviewed personally and through email. Hope their stories may inspire you a little.
Monday, April 22, 2013
FRIENDS FOREVER, REGARDLESS
by Roger Pe
A life in the fast lane is not for the weakest of hearts.
A career where expectations from highly demanding clients spell continuous growth or stagnancy needs a reliable ‘friend’ - someone who’ll be there for you. Always.
Advertising is frenetic and if you’re on the production side, you need to be organized, do a lot of networking and make sure everything works for you round-the-clock.
Which brings us to the hectic life of Socorro Fernandez, Sockie to many, accomplished TV commercial and movie director, advertising and multi-media veteran, university professor, topnotch producer, and former marketing director of the country’s biggest production house.
A storytelling veteran Sockie started working at J. Walter Thompson, then the country’s biggest advertising agency while finishing her Broadcast Communication degree at UP.
She moved to McCann Erickson and was a most sought-after producer when she did freelancing after that stint. As a regional producer for Procter & Gamble’s Whisper brand, she produced TV ads destined for Asian, European and South American markets.
She then evolved as marketing director at Unitel, Optima Digital and Brew Productions, eventually crossing over to something she has always wanted to do - directing.
She attended workshops in directing, production design and cinematography at The Workshops, Rockport, Maine, USA. She likewise learned from the masters, having attended screenplay-writing workshops under Armando “Bing” Lao, Doy del Mundo and Pascal Rey of Les Femmes, sponsored by the UP Film Institute.
In 2003, Sockie directed "Liyab", which was awarded as Best Short Film in Cine Manila, Film Academy of the Philippines, and Gawad Urian the following year. It was screened in Cannes, Bangkok and Singapore film festivals, rounding off at dizzying career achievement.
Her film “Gulong” was a finalist in the 2007 Cinemalaya feature film division, and in 2009 in the Asia Pacific Screening Awards (APSA) Best Children’s Film category. The same was screened in 2010 Children’s Film Festival in India and Busan International Kids Film Festival. In the same year, she directed “Mama Tan” a commissioned film based on the life of the Tan Caktiong family matriarch.
Sockie is probably the country’s only woman TV commercial director bred by the local ad industry. In a male-dominated profession, she brings with her formidable credentials that makes her an icon and role model to many.
She is presently essaying the same role at Simple Truth, a content provider, which produces meaningful entertainment and educational video content such as commercials, virals, TV shows, documentaries, and feature films, hoping to bring positive impact to the world.
On nurturing relationships
Throughout her career spanning over 3 decades, Sockie has lived in a ‘pressure-cooker’ but she’d always come out of it unscathed, getting better like wine with the passing of time.
It must be her philosophy in life, having a sunny disposition and being a convivial person. Add to that, her values about relationships and how they keep her grounded.
“I believe relationships are more valuable than any amount of fame or fortune. Making genuine friendships, connections and relationships takes a lot of investment, time, energy and emotion. Once I make them, I tell myself they are for keeps,” she says.
Sockie’s line of work involves a lot of creating and nurturing relationships, from agencies, clients, suppliers, to an entire production team composed of actors, scriptwriters, editors, cameramen, lights men, costume designers, make-up artists, and the list goes on. Establishing rapport is a critical component of her daily routine.
In a broader sense, Sockie is one who wouldn’t throw things easily out of the window because of petty circumstances. To her, challenges are little opportunities to get to know people more, see them on a different light, and make things better. If can be a friend to little things, she can be one to those that give her a sense of meaning – thick or thin, ups or downs.
Her Globe, her way
Much like the kind of relationship she has with Globe Telecom, which provided her mobile connection since 1997. You can call her one of those Globe ‘veterans’, having kept her 0917 for over 15 years.
Close to two decades as a Globe postpaid subscriber, Sockie and Globe have been inseparable, happy together, especially during highly stressful situations.
In her hectic day-to-day work, Sockie and Globe share a symbiotic relationship, more pronounced in her marketing functions where communications should be open and never compromised.
When she’s able to connect and engage with people seamlessly, those things are like sunshine for Sockie.
When time is of the essence and she’s able to get unlimited internet connection at the touch of button, she is fully-equipped and ready for the world.
When she’s able to send photos and videos to her clients for important decisions no matter where she is in the world, life to her is amazing.
When she’s able to indulge on Facebook and Twitter in between shooting breaks to know what’s happening with her friends, things are sweet.
When she gets loyalty rewards and attentive customer service, it makes her feel special.
When activating her roaming service during international film festivals is as easy as finishing off her favorite dessert, love is all around the world.
When things go well according to her plans thanks to her Globe postpaid plan, she values them closer to her heart.
“I’ve always been a happy Globe subscriber right from the start. It’s quite evident with the number of years I’ve maintained my Globe postpaid line. Over the years, I’ve seen how the postpaid product portfolio of Globe has transformed. It just keeps on getting better, especially with how it has evolved to an offer that really looks at and values customer needs. I like how we are given the empowerment to customize and design our own postpaid plan based on what we need, as well as what our lifestyle and budget is,” Sockie shares.
“My relationship with Globe has stood the test of time. It has managed to keep up with the pace of my career and the things I love doing, proving that it is a reliable partner in accomplishing my tasks and nurturing relationships. I see Globe as a friend who I can rely on, and even amidst the challenges, I know there’s no letting go,” ends Sockie.
Is your daily grind just like Sockie’s? Find a friend in Globe My Super Plan which lets you design your own postpaid plan deal. Visit www.globe.com.ph or call 730-1010 to know more about the revolutionary postpaid offer. # # #
Thursday, April 11, 2013
THE DAMAGE THAT SCAM ADS DO TO BRANDS
by Roger Pe
It’s awards season again.
It’s the time of the year when young creatives and ad agencies, hoping to gain fame and move up the creative rankings, stamp their class to prove “I-have-creative-DNA, watch-me-as-I-win.”
Local, regional and global creativity award shows will announce the winners in a few weeks. Part and parcel of these heady nights are gnashing of teeth, and occasionally, scandals that lead to seeing heads roll.
Who doesn’t want to win a Cannes Lion or Clio? Because they are highly valued, some will go to the extent of skating on thin ice just to win a handful.
Last week, just as people thought scam ads were a thing of the past, they made a gothic, zombie-like return.
Social media was abuzz with, according to Ad Age, “a ridiculous creative work that has gotten an agency and its corporate client in trouble.”
The campaign at the center of controversy was done by JWT India, posters showing women tied up and gagged in the trunk of a car brand.
One of the ads depicts a bikini-clad Kim Kardashian and her sisters Kourtney and Khloe gagged at the back of the vehicle while Paris Hilton winks at the driver’s seat.
The agency uploaded the ads in “Ads of the World”, a favorite website of advertising creative people that showcases real and ghost work from all parts of the globe. What ensued was a litany of backlash.
The agency also entered the work in India's Goafest Ad Festival. As judging was ongoing, the agency's chief creative officer, withdrew the ads, but alas, it was too late, the damage has been done.
For his part, the car brand’s senior officer for global marketing was forced to start his speech at an international auto show apologizing for the car’s sexually offensive ads.
Four days after, the agency’s head of creative, along with the senior creative director on the account were asked to resign. The car brand’s office in India also fired a senior executive whom it didn't name.
In 2006, JWT India almost won a Cannes Print Grand Prix for its Levi’s campaign - a series of stick figures with a signature red "Levi's" tab stuck to their legs. The only copy said: "Slim Jeans."
The unfortunate turn of events led Ashish Bhasin, Aegis Media chairman and CEO, southeast and south Asia to say:
“The distasteful portrayal of women, coming at a time when India was in the process of putting a law to prevent violence against women, has put the creative agency and client in damage control mode.”
Filipino Executive Creative Director Eric Cruz of Leo Burnett Malaysia, who is in the country to speak in Creative Guild’s “Kidlat Awards” shares his views on the (mal)practice.
“Scam ads are getting harder and harder to recognize against real ads these days, they’re getting more sophisticated,” he says.
Cruz steered LB Malaysia to the top of the rankings in Asia Adfest last month, where Leo Burnett won Agency Network of the Year.
“At the end of the day, any work that’s not done for a client is, in my book, “student work”, created without client’s confines and budget constraints. It is the equivalent of concept work, visionary but not real” he says.
Scam ads around the world
Scam ads are known as "truchos" in Spanish, and Brazilians call them "fantasmas" or ghost ads. Before 1996, it was totally unheard of in the Philippines.
In 2009, organizers of the 3rd Dubai Lynx Awards uncovered a large cache of bogus ads from entries submitted to the competition, subsequently withdrawing the Agency of the Year award from ad agency FP7 Doha.
Seven (7) previously handed out awards were rescinded: 1 gold (print campaign) 1 gold (tv/cinema campaign), 3 silver (print campaigns),1 silver (outdoor campaign) and 1 bronze (tv/cinema campaign).
Additionally, ten pieces that were shortlisted in print and outdoor categories were also disqualified.
At the height of the scandal, Sunny Hwang, president of Samsung Electronics Levant, made the following statement to the public:
"At no time was Samsung Electronics aware of these advertisements and the company has not approved or commissioned FP7 to create any advertising campaigns."
During the agency investigation, names of staff leaving FP7 Doha were not disclosed, whether they have resigned or been fired. It appeared however that creative director Fadi Yaish was among them.
Festival organizers which also run Cannes, released a statement at the scandal’s aftermath: “As a strong demonstration of the seriousness with which we view such behaviour, it has been decided that FP7 Doha will hand back all of its awards from the Dubai Lynx festival, and FP7 Doha has also been instructed not to submit any entries to Cannes Lions 2009.”
An ad for Taronga Zoo in Sydney was perhaps the most high profile ghost ad that got caught in 2000. The Cannes Lion that it won was withdrawn after organizers found out that the zoo did not authorize the winning agency to do the ad on their behalf. The creative director of the ad was dismissed.
Five years ago, a made in Brazil poster enraged Americans. The ad purportedly created for the World Wildlife Fund was much-reviled ad because it showed a fleet of planes flying towards the New York Twin Towers.
To make the matter even worse, the ad was found to have ran only once in a small Sao Paolo newspaper. It won a One Show merit award but organizers has since withdrawn the award.
In 2002, Brazilian independent ad agency DPZ Propaganda scored two gold Lions for a lubricant gel brand. In a statement, the makers of the product said the ad “was created without the involvement or approval of any of the company's employees."
A couple of years ago, a Southeast Asian ad agency won a gold and silver Lions in Cannes, making it the most awarded Asian agency and country as well.
But victory celebrations were cut short. The agency found itself embroiled in controversy parrying accusations that it won with a scam campaign for a beer brand. To this day, the industry remains skeptical and is unconvinced by the agency’s explanation.
Measures against scam
In an unprecedented move to stem the problem, One Show, one of the world’s toughest four award shows, implemented new rules in 2008, to ban agencies and members of creative teams found guilty of making fake ads for a period of five years.
“We need to protect One Show and the industry from losing credibility. It's time to stop this bullshit. The purpose of awards shows are rewarding great work for a brand, not work created for awards shows," Kevin Roddy, One Club chairman said.
The world’s toughest awards show D&AD joined One Show in taking a strong stance against scam ads.
“Work must have been produced in response to a genuine brief and be approved and paid for by the client. Works created solely for the purpose of entering competitions are not eligible,” it announced.
Cannes, the world’s biggest advertising festival has this to say:
“The role of Cannes Lions is to celebrate creativity and to reward the industry for outstanding creative work. Our role is not to come between the client and the agency, not to have a negative material effect on agency business and not to penalize individuals from an agency who have not had any association with the work in question.
But Cannes takes a hardline and says:
“Our key rules are simple: Entries cannot be made without the prior permission of the advertiser/owner of the rights of the advertisement. All entries must have been made within the context of a normal paying contract with a client. That client must have paid for all, or the majority of, the media costs.”
In light of the JWT India incident, Ad Age ran a survey among top agency chiefs and creatives on what the industry should do about it.
Here are two interesting quotes:
John Boiler, CEO 72andSunny: “Scam ads are the most disgusting manifestation of ego in our industry. Hurts clients and agencies reputations. And the ones awarded ultimately deserve, and will likely receive, the legacy of Lance Armstrong. No good for anyone, long-term or short.
Susan Credle, Chief Creative Officer, Leo Burnett USA: “A scam ad might collect a shiny object or two. A scam ad might ignorantly be celebrated in our insular community. A scam ad might make a portfolio stand out. But a scam ad will not sell a product, build a brand or, if we aim incredibly high, change the world.”
It’s awards season again.
It’s the time of the year when young creatives and ad agencies, hoping to gain fame and move up the creative rankings, stamp their class to prove “I-have-creative-DNA, watch-me-as-I-win.”
Local, regional and global creativity award shows will announce the winners in a few weeks. Part and parcel of these heady nights are gnashing of teeth, and occasionally, scandals that lead to seeing heads roll.
Who doesn’t want to win a Cannes Lion or Clio? Because they are highly valued, some will go to the extent of skating on thin ice just to win a handful.
Last week, just as people thought scam ads were a thing of the past, they made a gothic, zombie-like return.
Social media was abuzz with, according to Ad Age, “a ridiculous creative work that has gotten an agency and its corporate client in trouble.”
The campaign at the center of controversy was done by JWT India, posters showing women tied up and gagged in the trunk of a car brand.
One of the ads depicts a bikini-clad Kim Kardashian and her sisters Kourtney and Khloe gagged at the back of the vehicle while Paris Hilton winks at the driver’s seat.
The agency uploaded the ads in “Ads of the World”, a favorite website of advertising creative people that showcases real and ghost work from all parts of the globe. What ensued was a litany of backlash.
The agency also entered the work in India's Goafest Ad Festival. As judging was ongoing, the agency's chief creative officer, withdrew the ads, but alas, it was too late, the damage has been done.
For his part, the car brand’s senior officer for global marketing was forced to start his speech at an international auto show apologizing for the car’s sexually offensive ads.
Four days after, the agency’s head of creative, along with the senior creative director on the account were asked to resign. The car brand’s office in India also fired a senior executive whom it didn't name.
In 2006, JWT India almost won a Cannes Print Grand Prix for its Levi’s campaign - a series of stick figures with a signature red "Levi's" tab stuck to their legs. The only copy said: "Slim Jeans."
The unfortunate turn of events led Ashish Bhasin, Aegis Media chairman and CEO, southeast and south Asia to say:
“The distasteful portrayal of women, coming at a time when India was in the process of putting a law to prevent violence against women, has put the creative agency and client in damage control mode.”
Filipino Executive Creative Director Eric Cruz of Leo Burnett Malaysia, who is in the country to speak in Creative Guild’s “Kidlat Awards” shares his views on the (mal)practice.
“Scam ads are getting harder and harder to recognize against real ads these days, they’re getting more sophisticated,” he says.
Cruz steered LB Malaysia to the top of the rankings in Asia Adfest last month, where Leo Burnett won Agency Network of the Year.
“At the end of the day, any work that’s not done for a client is, in my book, “student work”, created without client’s confines and budget constraints. It is the equivalent of concept work, visionary but not real” he says.
Scam ads around the world
Scam ads are known as "truchos" in Spanish, and Brazilians call them "fantasmas" or ghost ads. Before 1996, it was totally unheard of in the Philippines.
In 2009, organizers of the 3rd Dubai Lynx Awards uncovered a large cache of bogus ads from entries submitted to the competition, subsequently withdrawing the Agency of the Year award from ad agency FP7 Doha.
Seven (7) previously handed out awards were rescinded: 1 gold (print campaign) 1 gold (tv/cinema campaign), 3 silver (print campaigns),1 silver (outdoor campaign) and 1 bronze (tv/cinema campaign).
Additionally, ten pieces that were shortlisted in print and outdoor categories were also disqualified.
At the height of the scandal, Sunny Hwang, president of Samsung Electronics Levant, made the following statement to the public:
"At no time was Samsung Electronics aware of these advertisements and the company has not approved or commissioned FP7 to create any advertising campaigns."
During the agency investigation, names of staff leaving FP7 Doha were not disclosed, whether they have resigned or been fired. It appeared however that creative director Fadi Yaish was among them.
Festival organizers which also run Cannes, released a statement at the scandal’s aftermath: “As a strong demonstration of the seriousness with which we view such behaviour, it has been decided that FP7 Doha will hand back all of its awards from the Dubai Lynx festival, and FP7 Doha has also been instructed not to submit any entries to Cannes Lions 2009.”
An ad for Taronga Zoo in Sydney was perhaps the most high profile ghost ad that got caught in 2000. The Cannes Lion that it won was withdrawn after organizers found out that the zoo did not authorize the winning agency to do the ad on their behalf. The creative director of the ad was dismissed.
Five years ago, a made in Brazil poster enraged Americans. The ad purportedly created for the World Wildlife Fund was much-reviled ad because it showed a fleet of planes flying towards the New York Twin Towers.
To make the matter even worse, the ad was found to have ran only once in a small Sao Paolo newspaper. It won a One Show merit award but organizers has since withdrawn the award.
In 2002, Brazilian independent ad agency DPZ Propaganda scored two gold Lions for a lubricant gel brand. In a statement, the makers of the product said the ad “was created without the involvement or approval of any of the company's employees."
A couple of years ago, a Southeast Asian ad agency won a gold and silver Lions in Cannes, making it the most awarded Asian agency and country as well.
But victory celebrations were cut short. The agency found itself embroiled in controversy parrying accusations that it won with a scam campaign for a beer brand. To this day, the industry remains skeptical and is unconvinced by the agency’s explanation.
Measures against scam
In an unprecedented move to stem the problem, One Show, one of the world’s toughest four award shows, implemented new rules in 2008, to ban agencies and members of creative teams found guilty of making fake ads for a period of five years.
“We need to protect One Show and the industry from losing credibility. It's time to stop this bullshit. The purpose of awards shows are rewarding great work for a brand, not work created for awards shows," Kevin Roddy, One Club chairman said.
The world’s toughest awards show D&AD joined One Show in taking a strong stance against scam ads.
“Work must have been produced in response to a genuine brief and be approved and paid for by the client. Works created solely for the purpose of entering competitions are not eligible,” it announced.
Cannes, the world’s biggest advertising festival has this to say:
“The role of Cannes Lions is to celebrate creativity and to reward the industry for outstanding creative work. Our role is not to come between the client and the agency, not to have a negative material effect on agency business and not to penalize individuals from an agency who have not had any association with the work in question.
But Cannes takes a hardline and says:
“Our key rules are simple: Entries cannot be made without the prior permission of the advertiser/owner of the rights of the advertisement. All entries must have been made within the context of a normal paying contract with a client. That client must have paid for all, or the majority of, the media costs.”
In light of the JWT India incident, Ad Age ran a survey among top agency chiefs and creatives on what the industry should do about it.
Here are two interesting quotes:
John Boiler, CEO 72andSunny: “Scam ads are the most disgusting manifestation of ego in our industry. Hurts clients and agencies reputations. And the ones awarded ultimately deserve, and will likely receive, the legacy of Lance Armstrong. No good for anyone, long-term or short.
Susan Credle, Chief Creative Officer, Leo Burnett USA: “A scam ad might collect a shiny object or two. A scam ad might ignorantly be celebrated in our insular community. A scam ad might make a portfolio stand out. But a scam ad will not sell a product, build a brand or, if we aim incredibly high, change the world.”
Wednesday, April 10, 2013
MOBILE BROWSING SHOWING UNPRECEDENTED GROWTH IN THE PHILIPPINES
Mobile browsing has definitely revolutionized the way people use their mobile phones nowadays. Keeping at pace with today’s very dynamic and mobile lifestyle, the mobile phone has become an avenue for people to connect not only with their phonebook contacts through texting or calling, but with the rest of the world with social networking, e-mail, and instant messaging through mobile browsing.
Understanding the potential that mobile browsing will bring to its business, Globe Telecom is looking at its mobile browsing segment to sustain its growth momentum. In fact last year, Globe mobile browsing revenues have swelled to P3.1 billion, a significant 55% growth from previous year’s P2.0 billion.
The growth was attributed to the increase in smartphone penetration due to the availability of more affordable smartphones, the growing popularity of Internet access via the mobile phone, as well as the strong take-up of mobile browsing services and promos offered by Globe.
“We are happy to see how our mobile browsing segment has grown in 2012 driven by strong performance of our offers and promotions that allow subscribers to maximize use of their smartphones beyond call and text,” said Jenny Granada-Echevarria, Head of Mobile Data Services in Globe.
In 2012, Globe unveiled its roster of mobile internet bundles that provide Globe Prepaid and TM subscribers a day of unlimited access to various social networking sites on their mobile phones for only P20. SOCIAL20 gives users access to Facebook, Multiply, and Twitter; FUN20 gives users access to Facebook and YouTube; while MAIL20 gives users access to Facebook, Yahoo! Mail and GMail.
In partnership with internet giant Google, Globe also became the world’s first telecom operator to offer free data access to the World Wide Web and select Google services via Free Zone powered by Google. With Free Zone, Globe Prepaid and TM subscribers get easy and instant access to Google Search, Gmail, and Google+ on their feature phones and smartphone without any cost via http://libre.ph.
Globe also showcased its own roster of mobile applications to provide subscribers a better and richer mobile experience with relevant and premium content. The Globe Mobile Apps, GMESSAGE, GMOVIES, GSERVICES and GCASH, are all designed to suit the interests and lifestyle of today’s smartphone owners.
Finally, Globe launched its PowerSurf plans, which are mobile browsing plans that use megabytes or MB, a unit used to measure the size of internet-related transactions. Through Globe PowerSurf, subscribers get bulk Megabytes (MB) of mobile data, consumable per kilobyte (KB).
Globe PowerSurf is more beneficial to subscribers than the default charging where subscribers are charged P5 for every 15 minutes of online time. Using a MB plan in mobile surfing does not look at the time spent online, but on the activity performed or site visited, making it more affordable to surf on the mobile phone.
Prepaid subscribers can choose from the following affordable PowerSurf plans: 20MB for P15 valid for 1 day, 50MB for P30 also valid for 1 day, and 100MB for P50 valid for 3 days. Prepaid and Postpaid subscribers looking for plans with higher MB allocation and longer validity can avail of the following 30-day PowerSurf variants: 50MB for only P99, 300 MB for only P299, and 1GB for only P499.
To learn more about Globe Mobile Internet, visit http://surf.globe.com.ph, text SURF to 8888, or dial *143# for free on the mobile phone.
Friday, April 5, 2013
PHILIPPINES: BBBETTING ON THE NEW FITCH INVESTMENT UPGRADE
By Roger Pe
Where would investments in Asia most likely yield scintillating returns?
If you ask Fitch, the Philippines is one of the brightest spots in the region.
As the whole nation was gearing up for the Holy Week recess and Europe beset by economic woes, another great news hovered around the Philippine sky and landed down with a big bang – Fitch upgraded the country’s investment rating, a first in its history.
Call it the investment silver lining that’ll most probably translate into gold.
The adrenaline pumping excitement prompted local and foreign observers to give positive feedbacks. Sacha Tihanyi, senior currency strategist for Scotiabank in Hong Kong, for one, described it as “bullish and dynamic turn of events.”
According to Fitch, the Philippines' sovereign external balance sheet is considered strong, relative to 'A' range. With added current account surplus, boosted by incoming remittances from overseas workforce, it is bound to rise to the top.
Over the last five years, Fitch said Manila had stronger and less volatile growth than its counterparts. It expects Philippine GDP growth trend to be in the 5-5.5 percent levels in the coming years.
Fitch Ratings are based on factors such as economic shift, bonds and debt status. Along with Moody’s and Standard & Poor’s it is one of the top three rating agencies in the world,
According to wire news, CNBC, Bloomberg, CNN, and others announcing the upgrade, Moody’s and Standard & Poor’s are expected to follow suit, although the latter had already put its outlook to “positive” last month.
Prior to the upgrade, Philippine FDIs rose 12 percent to P289.1 billion in 2012 from P258.2 billion in 2011, data from the National Statistics and Coordination Board (NSCB) showed.
Approved foreign investments for 4th quarter of 2012 reached P230.2 billion, the highest since 1996 and a 37.1-percent improvement over the P167.9 billion in the same period in 2011.
Netherlands, Japan and the US were the top three investing countries in Q4 2012.
FDI flows to the Philippines last year surpassed the growth in other Southeast Asian countries, the United Nations Conference on Trade and Development (UNCTAD) said last month.
The UN body said it grew by 15 percent, faster than Vietnam's 12.5 percent, Thailand's 3.9 percent and Indonesia's flat growth while flows to Singapore fell 15.1 percent.
In a statement, presidential spokesperson Edwin Lacierda announced that the President was pleased to hear that the Fitch group upgraded the status of the Philippines from BB to BBB.
Triple B means middle class with an acceptable risk. Applied to business, the outlook means much more than lower interest rates on the country’s debt and more investors buying Philippine securities.
The Philippine Fitch Rating improvements punctuated the country’s fiscal management that’s made debt dynamics more resilient to shocks.
What it means
By and large, the country will have greater access to low-cost funds giving it more fiscal space to sustain and further improve programs on social protection, defense, and economic stimulus, among others.
Because it now has an investment quality DNA in the eyes of reputable rating agencies, hopes are high for more foreign funds and capital inflows, a country seen as stable, safe and profitable, without any danger of default as in need of bailout.
Prior to the upgrade, foreign funds have been flowing into the country, rejuvenating the country’s PSEi.
On March 27, following the Fitch announcement, the Philippine Stock Exchange index closed at a record 6,847.47. Analysts expect the stock index to reach the 7,000-point level after the upgrade. 2Tradeasia.com analyst Freya May Natividad said the latest upgrade would raise optimism on the country’s overall macroeconomic health.
The investment upgrade also means that foreign currency flowing into the country will increase, more companies in the real economy can now consider the Philippines as an investment destination.
Lower borrowing costs for Philippine companies in the international markets would ensue, allowing for local prtners to have higher valuations for their securities.
This will enable Philippine industries to expand, generate more jobs, empowerment and inclusiveness that will turn into benefits across all sectors of society.
With the great news, the Philippine Chamber of Commerce and Industry (PCCI) is urging the government to leverage on the recent upgrade and translate it to more FDIs (foreign direct investments).
Chain reaction
The Philippine peso, which had been showing a remarkably consistent performance over the last 8 months, immediately surged against the dollar, a day after the upgrade announcement, raising hopes for more capital inflows into the country.
The dollar fell against the peso after the announcement and last stood at about 40.81, down roughly 0.6 percent for the day.
Investors had already been pricing Philippine bonds at levels similar to investment-grade nations. The upgrade of the Philippines was not completely unexpected, observers say.
In Singapore, a strategist for a multinational bank said, “there's no real surprise here, the Philippine economy is dynamic and more resilient to shock.”
Moreover, Philippine President Aquino said, "The task now is to ensure that expected inflows will be used to maximum effect towards a sustainable, progressively empowering economy.
He said, the country is “determined to build on our economic gains to usher in a society wherein every Filipino, today and for generations to come, may be given the wherewithal to realize their full potential."
Where would investments in Asia most likely yield scintillating returns?
If you ask Fitch, the Philippines is one of the brightest spots in the region.
As the whole nation was gearing up for the Holy Week recess and Europe beset by economic woes, another great news hovered around the Philippine sky and landed down with a big bang – Fitch upgraded the country’s investment rating, a first in its history.
Call it the investment silver lining that’ll most probably translate into gold.
The adrenaline pumping excitement prompted local and foreign observers to give positive feedbacks. Sacha Tihanyi, senior currency strategist for Scotiabank in Hong Kong, for one, described it as “bullish and dynamic turn of events.”
According to Fitch, the Philippines' sovereign external balance sheet is considered strong, relative to 'A' range. With added current account surplus, boosted by incoming remittances from overseas workforce, it is bound to rise to the top.
Over the last five years, Fitch said Manila had stronger and less volatile growth than its counterparts. It expects Philippine GDP growth trend to be in the 5-5.5 percent levels in the coming years.
Fitch Ratings are based on factors such as economic shift, bonds and debt status. Along with Moody’s and Standard & Poor’s it is one of the top three rating agencies in the world,
According to wire news, CNBC, Bloomberg, CNN, and others announcing the upgrade, Moody’s and Standard & Poor’s are expected to follow suit, although the latter had already put its outlook to “positive” last month.
Prior to the upgrade, Philippine FDIs rose 12 percent to P289.1 billion in 2012 from P258.2 billion in 2011, data from the National Statistics and Coordination Board (NSCB) showed.
Approved foreign investments for 4th quarter of 2012 reached P230.2 billion, the highest since 1996 and a 37.1-percent improvement over the P167.9 billion in the same period in 2011.
Netherlands, Japan and the US were the top three investing countries in Q4 2012.
FDI flows to the Philippines last year surpassed the growth in other Southeast Asian countries, the United Nations Conference on Trade and Development (UNCTAD) said last month.
The UN body said it grew by 15 percent, faster than Vietnam's 12.5 percent, Thailand's 3.9 percent and Indonesia's flat growth while flows to Singapore fell 15.1 percent.
In a statement, presidential spokesperson Edwin Lacierda announced that the President was pleased to hear that the Fitch group upgraded the status of the Philippines from BB to BBB.
Triple B means middle class with an acceptable risk. Applied to business, the outlook means much more than lower interest rates on the country’s debt and more investors buying Philippine securities.
The Philippine Fitch Rating improvements punctuated the country’s fiscal management that’s made debt dynamics more resilient to shocks.
What it means
By and large, the country will have greater access to low-cost funds giving it more fiscal space to sustain and further improve programs on social protection, defense, and economic stimulus, among others.
Because it now has an investment quality DNA in the eyes of reputable rating agencies, hopes are high for more foreign funds and capital inflows, a country seen as stable, safe and profitable, without any danger of default as in need of bailout.
Prior to the upgrade, foreign funds have been flowing into the country, rejuvenating the country’s PSEi.
On March 27, following the Fitch announcement, the Philippine Stock Exchange index closed at a record 6,847.47. Analysts expect the stock index to reach the 7,000-point level after the upgrade. 2Tradeasia.com analyst Freya May Natividad said the latest upgrade would raise optimism on the country’s overall macroeconomic health.
The investment upgrade also means that foreign currency flowing into the country will increase, more companies in the real economy can now consider the Philippines as an investment destination.
Lower borrowing costs for Philippine companies in the international markets would ensue, allowing for local prtners to have higher valuations for their securities.
This will enable Philippine industries to expand, generate more jobs, empowerment and inclusiveness that will turn into benefits across all sectors of society.
With the great news, the Philippine Chamber of Commerce and Industry (PCCI) is urging the government to leverage on the recent upgrade and translate it to more FDIs (foreign direct investments).
Chain reaction
The Philippine peso, which had been showing a remarkably consistent performance over the last 8 months, immediately surged against the dollar, a day after the upgrade announcement, raising hopes for more capital inflows into the country.
The dollar fell against the peso after the announcement and last stood at about 40.81, down roughly 0.6 percent for the day.
Investors had already been pricing Philippine bonds at levels similar to investment-grade nations. The upgrade of the Philippines was not completely unexpected, observers say.
In Singapore, a strategist for a multinational bank said, “there's no real surprise here, the Philippine economy is dynamic and more resilient to shock.”
Moreover, Philippine President Aquino said, "The task now is to ensure that expected inflows will be used to maximum effect towards a sustainable, progressively empowering economy.
He said, the country is “determined to build on our economic gains to usher in a society wherein every Filipino, today and for generations to come, may be given the wherewithal to realize their full potential."
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