President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad

To FINEX members and friends,

November 2017 Issue

We are now on the final stretch of 2017. This year has been one of the busiest and exciting for both FINEX and the country.

Earlier this month, our country was once again placed in the limelight as we hosted this year’s ASEAN Summit. The summit provided us to showcase what our country can share to the world and the creativity of the Filipino people. Indeed, the recent hosting of the ASEAN summit placed our country

Read More
2017 Year-Round Corporate Sponsors




How Business Makes Business
Print PDF

August 11, 2017

How Business Makes Business

FINEX Files is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Friday in Manila Times, business column section.

Getting into business used to be as simple as identifying a product or service to sell, making sure the cost of producing said product or service is kept low and earning on the margin. Apple makes money from their iPhones, iPads and accessories while retail stores like Bench sells clothing, merchandise and other items for profit. But in today’s competitive world, it is interesting that many enterprises actually make more money in less obvious ways. Developing an enterprise in this volatile, uncertain, complex and ambiguous world would require a lot of creativity about where to generate profits. /br>
The Huffington Post had this short article on 7 businesses making lots of money in ways you wouldn’t expect. Let me start here and use it as a spring board to develop other such examples. One, Mc Donalds (USA) earns a majority of its profit charging rent, not selling food. This idea was well documented in the recent movie on Ray Croc, The Founder. Two, Lucasfilm made more money off Star Wars toys than the movies itself. This formula is now standard for many of new films coming out like the Marvel series, and of course Disney. Three, the most profitable restaurants in America made 75% of its income from alcohol sales, not food sales in 2011./br>
Four, car dealership often make more money through financing and servicing than its sales. Five, gas stations make money off food and car accessories than from gas. This trend is likewise observed now in the Philippines especially in gas stations positioned strategically in key expressways and major thoroughfares. Six, companies that manufacture printers often makes more money off ink sales. Note how printers today are often subject to discounts and special offers. Lebron James, Tiger Woods and many other star athletes make more money off endorsements than from actually playing sports. /br>
Do you often wonder how free TV manages to sustain its being free? Of course nothing really is free these days. Television networks, radio, newspapers and the internet rely heavily on advertising. With TV and radio, advertisers pay air time that varies depending on which part of the day you want to place your ad and in what specific show it will be played. If you chose to do it primetime, during the morning news show, the noontime show, the 6pm news program or during the drama marathon, expect that the price is as prime. /br>
Free TV is now challenged by cable. If you live in a place where there is no signal, you pay a cable company to bring it to you over a wire. These days, even this model is under challenge as new technology will send a signal using disks and over the air. With cable selling programs without ads, money is being made through subscribers. Cable operators are also selling their services in different ways - - rent of digital boxes, sale of program packages and advertisement in basic program channels. /br>
One related disturbing money-maker in the media industry, in my view, is when in the middle of a news commentary, the anchor, whether on radio or TV, makes a pitch for a product or service -- a vitamin, a chicken retailer, etc. The blur between delivering news and outright advertising is not healthy. Technology companies make money in various ways. A streaming company like Netflix makes its money from its subscribers while Gmail service of Google earns from advertising. Some tech companies offer their services for free, initially, but once you get hooked there’s a premium charge for extra capacity. We see this in Evernote or Dropbox. Apple iTunes makes its money from royalties (of music and movie sales or rentals). Another interesting source of income is selling data. Companies like Linkedin does this, in addition to advertising and subscribers income. /br>
Up front, most think that banks make money through margins between costs of deposits and the lending rates. These days, many banks especially in developed countries earn through fees -- by offering a third-party collection/payment system and other services to its clients that you’ve never heard before. And for some banks in the country, linkage to sister companies in the conglomerate like real estate, shopping centers and other businesses provides lucrative synergy. Banking and finance also penetrate online systems, the internet and telephony to ease payment systems, of course at a cost. /br>
Credit card companies have various revenue streams. When a consumer pays his purchase through a credit card, a small percentage is paid to the credit card company as transaction fee which goes to the credit card issuer and the association managing the account. The credit card company likewise collect fees from cardholders, and this is why I advise consumers to try to get this fee waived. When travelling abroad, some cards will charge foreign transaction cost and if you have to pay in the local currency, the card makes a margin on the exchange rate. Missed payments as well as installment purchases are the kicker, because the charges can cost the consumer quite a bundle. /br>
Other major companies are now beginning to invest in climate change related products and services. Some examples are Nestle on their investment in ice cream and water as a clear reaction to global warming, Cobham to supply cameras that will monitor natural calamities such as flash flood and other extreme weather conditions, and Chevron in investing oil production in the arctic, to name a few. /br>
Many business models now operate in unconventional ways common people can hardly imagine. The obvious is no longer straightforward. # /br>
(Benel D. Lagua is Executive Vice President at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.)

Managing Millenials
Mr. Ronald S. GosecoBy Ronald S. Goseco

December 14, 2017

Managing Millenials

I was recently asked by our principal how different it is to manage today’s millenials as compared to a similar group of individuals twenty years ago. They asked me this since I previously managed auto dealerships twenty years ago with individuals with the same age profile.

Will RP Fit in the Integrated ASEAN Mold?
Zoilo By: Zoilo "Bingo" P. Dejaresco III

December 13, 2017

Will RP Fit in the Integrated ASEAN Mold?

THERE HAVE BEEN REAL TRIUMPHS during the ASEAN Meeting in Manila. Sometimes, Filipinos pinch themselves if these are indeed sustainable?

The ASEAN with 600 million people and with the highest regional GDP growth rate-necessarily- attracts many seller-nations and investors. But with the ASEAN integration- with tariffs down among the ASEAN nations- this would ensure ASEAN should be for ASEANs, first.

Asian economic integration
By Mercedes B. SuleikBy Mercedes B. Suleik

Business Mirror (FINEX Free Enterprise)
December 05, 2017

Asian economic integration

On October 25 the Asian Development Bank (ADB) released a report on Asian Economic Integration and commented on the lessons learned after the Asian financial crisis 20 years ago. It stated that growing trade and investment linkages in Asia and the Pacific have helped to improve the region’s economic resilience to uncertainties in the global economic environment. Asia’s intraregional trade rose in 2016 and acted as a buffer against headwinds from uncertainties in global trade and policy. Subregional trade integration was strongest in East Asia, followed by Southeast Asia and Central Asia.

Flor G. TarrielaBy Flor G. Tarriela

Business World (FINEX Folio)
November 24, 2017


Philippine Gross Domestic Product (GDP) increased by 6.9% in the 3rd quarter but agriculture grew at a slower pace at 2.5% vs 3.0% in 3rd quarter 2016. Still, agriculture showed better growth of 4.6% YTD 2017 vs -1.3% in 2016.

Mr. George S. ChuaBy Mr. George S. Chua

BUSINESS MIRROR (Free Enterprise)
November 22, 2017


A number of months ago, I saw a Bloomberg interview of two young enthusiastic gentlemen who were the co-country directors of this relatively new multinational company called Transportify. As I was listening to the interview of Noel Abelardo and Paulo Bengson, of what Transportify was all about, I thought it was a great idea. The easiest way to explain it is if you have Uber and Grab as an app to transport passengers, you have Transportify to transport goods and packages.

The Importance of Development Finance
Mr. Benel D. LaguaManila Bulletin
MANILA BULLETIN (Business Option)
October 30, 2017

The Importance of Development Finance

Access to finance is always a daunting topic as it addresses two basic issues. Financial exclusion occurs when those denied access have economic and social return on investment better than those with regular access. The second issue is the response to concerns of inequality and the need for better redistribution of wealth.