Is the Philippines investor-friendly under the administration of Malacañang’s present chief occupant? Reactions by some readers to “Best business in the Philippines is no business,” a Due Diligencer piece that appeared on this space last week, provide a glimpse into the answer to that question: It is not.
In that column, I expressed my apprehension over the unpredictable fate of foreign investors who want to open shop here but encounter difficulties in registering their local units. I admit I have a personal reason for taking up the subject: I have volunteered to help a group of foreigners if they need any assistance in registering their businesses.
The negative reactions tend to suggest that the present national leadership does not care at all if foreign investors lose interest in the country. Malacañang’s present occupants wrongly perceive foreign investors to pose tough competition to the Philippines’ rich and famous, whom they could tap for political donations to preserve their rule and, in the process possibly protect the inheritance of their chief and his family – that is, Hacienda Luisita.
There is still hope, though, for potential foreign investors in this country. They need not fear ‘too many regulations’ imposed by regulatory agencies. As a matter of fact, they could even ease their burden of having to deal with too much intervention by government by exercising due diligence before releasing money into their joint venture with their local partners. Given that they might find closing shop to be even harder, they should invest as little as possible. Put in only the money that you need to finance your venture. In other words, don’t overcapitalize. Instead, preserve your money in your home country.
Foreigners should be forewarned that it may even take longer to dissolve a stock corporation than to register one. The “winding up period” before the final closure of a business alone could last three years. A business, whether local or foreign, would take that long to obtain clearances, particularly from the Bureau of Internal Revenue and the Social Security System.
By the way, the SEC requires a first-time registrant corporation to obtain a tax identification number from the BIR before it could issue it a certificate of registration.
In a posting after reading Due Diligencer’s “SBS Philippines IPO of 420M shares,” Felimon Soria, a reader of The Manila Times, requested that in analyzing a stock, I should rate it accordingly. I am sorry to disappoint him. I cannot advise investors whether to buy or sell the shares in any company that I report. I analyze stocks based only on disclosures and historical data whenever any is available. In short, I am not in a position to make any kind of recommendation.
To be honest with all readers of this paper, I do not recommend stocks to investors because I am a reporter just like anybody else covering the stock market. As a reporter, I report the news. But as a neutral observer of the market, I may differ with the next guy in dealing with listed stocks. I dig for facts and additional data on public companies that are not posted on the website of the Philippine Stock Exchange. In other words, I do my own research by perusing even past disclosures and relate them and their impact on the latest filings.
Yes, I did some stock picking in the past. As a matter of fact, I invested in GMA 7 common shares to learn the intricacies of stock investing. Luckily, though, I did not lose money.
Like anyone among public investors, I followed the simplest rule governing market investing: “buy at low, sell at high.”
As for SBS Philippines, I wish to assure the readers of The Manila Times that like them, I am waiting for the company’s full disclosure of its financials, if possible, for the last three or four years. The public would be interested to know if SBS Philippines came up with the policy calling for 20 percent of the previous year’s net income declared as dividend only after it went public. Did it use the same policy in declaring dividends before its IPO of 420 million primary shares?
Public investors should admire the Sytengcos for not taking advantage of them. They should take note that the family sold primary shares to them, meaning shares that came from the unissued capital stock of SBS Philippines and not from their individual holdings.
By the way, I am reserving for a future column piece the letter of a foreigner who complained in an email to Due Diligencer about “government-imposed restrictions.” Because I have yet to obtain his permission to use his letter on this space, I am not at liberty to disclose its contents yet. As a long-timer in the country, he must have a lot to say about his experience in dealing with various regulatory agencies.