Facebook Virgin Agonistes

LIKE MANY WEB NEWBIES, I have these sporadic anxiety episodes about relinquishing the shelter of anonymity. Although I joined stiff-'n-formal LinkedIn some three years ago, I feel I never really let my hair down until I signed up for Facebook in May of last year, and even more recently the blogosphere as well. For me, some part of the impetus has been commercial, as I see the World Wide Web as a tool to help (somewhat) level the playing field for small businesses, like my employer, to reach a broader audience for its products (not to mention its social advocacy). Though I can't deny it's also been great to rediscover dear friends I've been out of touch with for decades.

During a post-New Year's dinner with college buddies, I found myself a lone outlier sitting near the more relaxed end of the privacy debate. Most of my cronies exchanged notes on how to make their Facebook settings more restrictive, so as to protect their personal information and family photos. I teased them about being paranoid about the world learning of their past indiscretions or current clandestine pursuits. I bragged that, since I have no skeletons to confine to the closet, I don't mind making public a greater portion of my life.

I was to rue that boast in a matter of days. Back in December, I had blogged that Vice President Noli de Castro climbed into a boxing ring and insinuated himself behind the victorious Manny Pacquiao in order to probably, among other things, boost his own (Noli's) 2010 election prospects. But soon afterwards, I unearthed - to my horror - a two-year-old photo of myself next to the Vice President himself! There I was, in smug, be-suited glory, basking in Kabayan's halo, in front of my employer's booth at a trade fair in SM Megamall! The shoe was irredeemably on the other foot.

Although I'm now duly chastened for accusing others of mercenary motives, on the whole I'm unrepentant about embracing public life. At its core, the rigor of public life is all about keeping public figures honest and consistent - and it's definitely not meant to be pleasant.

However, if you feel there's some greater cause to be served by airing your opinion, to the point of fashioning yourself into a poster child for that cause, then maybe it's inevitable that some amount of your privacy gets sacrificed.

You see, I'm one of those unfortunate souls who's been bitten by a Bug of Mission. The particular species of pest which got a piece of me is named "Investing for the Masses." I'm an absolute fanatic for teaching fellow Filipinos about the massive and myriad benefits of long-term investing, and mutual funds in particular - which have been around for years now but still haven't gained any significant traction within the popular consciousness.

In my strange, bastardized ideology, I've been able to reconcile my faith in capitalism, profit, and market forces with the power of distributed capital to promote social reform, poverty alleviation and the maturation of genuine democracy. Call it pinko capitalism, if you wish. This is the motivation for sticking my neck out; this is the cause which I feel is worth the price of some of my, and even my family's, privacy.

Or am I just making a tidy rationalization? Is this really just a flexing of the ego? A sophisticated cover for vanity? I certainly hope not, but I fear that I cannot rule out this possibility. After all, humans are animals of self-interest, and even altruistic behavior is rooted in deeper-seated, self-serving goals.

The National Fist and 2010

IN THE CLOSING MOMENTS of the eighth round, it became clear that Oscar de la Hoya could no longer answer Manny Paquiao's flurry of slugs, let alone break out of the corner in which he was trapped. Once again, the National Fist cupped us all in the palm of his hand, and we all swam in ecstasy.

Perhaps it's just me, but I feel that during the last few years there has been a subtle resurgence in national pride. The most visible manifestation (and perhaps a catalyst) of this has been Manny's string of triumphs. We've had a couple of all-Filipino Mount Everest teams. But I've also noticed a number of smaller things. For instance, I've been seeing the Filipino flag more often nowadays, emblazoned on taxicabs, and on teenagers' shirts and sweatshirts.

Much has been written recognizing Filipino achievements or contributions on the world stage. The ranks of the OFW diaspora (our de facto ambassadors abroad) are increasing, and projecting a highly positive stereotype of the Filipino. We have established such a high reputation in foreign lands that other nationalities envy our industry, talent, and people skills. And our BPO / call center sector has proven it can hold its own against rivals in India and elsewhere, while demonstrating its brilliance to the astonished pleasure of customers in the first world. The government's fiscal house is in order for the first time in decades, and our other macroeconomic fundamentals speak of prudent management achieved in the teeth of a long-running political circus (and global slump).

Indeed, the ugly undercurrent of politics has been the one major blight on Filipinos' self-confidence and self-love. It intruded upon even Manny Pacquiao's post-match communion with his countrymen via television – this came in the form of Vice President Noli de Castro climbing into the ring to bask in Manny's glory. When Noli placed himself behind Manny, I'm sure many watching surmised that he did this to keep himself in the top shelf of our awareness (at probably a fraction of the cost that Manny Villar spends on his 30-second ads). The more cynical among us went so far as to wonder whether Noli would ask Manny Pacquiao to run as vice president under his ticket. A grim reminder that 2010 is nearly upon us, and that there remains a looming uncertainty over what's in store for us as a people.

What are we to make of all this? Conditioned by decades and centuries of having been toyed with by powerful elites, many of us may shrug our shoulders fatalistically, or vote with our feet by moving abroad. But I think the great lesson to draw is that Manny Pacquiao is everyman: disadvantaged early in life, yet determined to use whatever brains and talent he has to develop himself into something worthy of international admiration. It is a lesson in self-respect, a live declaration that anyone – truly, anyone – is capable of changing his world. Even a Filipino.

In some sense, I find it less important whether Noli, or Villar, or Mar Roxas, or even Manny Pacquiao becomes the next President. Anyone who sits in high office becomes susceptible to corruption, or to inept judgment or advice. It's more relevant for us, the electorate, to choose with great care and discernment, and far more importantly, to thereafter closely monitor the performance of the elected official. The day-to-day responsibility ultimately rests upon each of us to make sure the elected listen to the electors, and stick to the straight and narrow. We'll be able to discharge this citizen's responsibility only once we, like Manny the National Fist, have decided to value and respect ourselves. We Filipinos just need to learn to like ourselves enough in order to yell "STOP!" to politicians' abuse and their affront of our intelligence, and to demand more honest service from those to whom we delegated our power.

Enough of this learned helplessness. Manny Pacquiao shows us the way. First: accept that we are worth a whole lot of dignity, and that we deserve better. Then, throw all our brains, heart and muscle into constructive effort. This way, we will be shapers of 2010 and beyond, rather than bystander-victims of it.

Incubating PERA

YOU KNOW A PIECE OF LEGISLATION is truly great for the life of a nation if it takes an eternity to enact. It may be the mark of an immature body politic that the public benefit promised by a reform law is directly proportional to the voracity of vested interests gnawing away at it the way piranhas would dispatch a capybara. An alternative theory (one that's less uncharitable): the more noble the agenda, the less useful it can serve as a fulcrum for blue-ribbon grandstanders to elevate their prestige at their enemies’ expense. (Or, what is ANC for, but to give us continuous coverage of our government’s lurid absurdities?)

But once in a blue moon, lawmakers do actually come through. In August 2008, after nine arduous years in the cellar, the Personal Equity and Retirement Account (PERA) Law (R.A. 9505) was finally passed. This is the Philippines’ equivalent of the US ERISA law of 1974, which created the now-famous Individual Retirement Accounts (IRAs) – which in turn are now bemoaned to have halved in value since the start of this year. Altogether, IRAs have created a whole lot of good for US citizens. So if you feel the pain of the impoverished American, who now finds his IRA glass half full, spare a tear or two for Juan dela Cruz, whose PERA glass has yet to be created – because the myriad regulators are still struggling to cobble together the law’s implementing rules and regulations (IRRs).

Though I may sound wholly ungrateful, I am not blind to the heroic husbanding of the PERA law by the Philippine Stock Exchange (PSE), the Bangko Sentral ng Pilipinas, and other members of the Capital Markets Development Council. These folks' dedication reassures me that patriotism is alive and well, even among the suits and the bureaucrats. I’m sure it was more than just the prospect of a profitable “Big Bang” which kept them faithful to the cause during the years in the legislative wilderness. Let us be thankful for what we have achieved so far.

Yet much remains to be done. Banks, insurers, and other players in the financial markets may salivate at the forecast income from PERA, but many have made the observation that the devil is in the details. The coming PERA ecosystem will initially be messy and complex as a result of the wide range of investment instruments encompassed, a host of tax questions, and the need to quickly grow whole industries to fill key vacuums in the ecosystem. Overlaying all this nitty-gritty is the continued fragility of political will. (Surprise, surprise! And you thought PERA’s political chapter was all over.) If, hypothetically speaking, you’d like to close your term in Malacanang with a minimal deficit or even a balanced budget (global recession notwithstanding), wouldn’t it be tempting to defer PERA’s IRRs, thereby bequeathing the negative fiscal impact of PERA’s tax incentives to your successor?

Let’s hope it doesn’t take nearly another decade to produce the PERA IRRs. But maybe PSE President Francis Lim has the better prayer in that he wishes for a pragmatic, workable set of IRRs: palatable to both the participating financial institutions and the average Filipino investor, while sufficiently protective of the latter. Never mind another prolonged gestation, this school of thought goes – as long as PERA does not emerge stillborn. For it would be tragic farce if, when PERA’s full framework is finally unveiled, nobody comes. To make the IRRs work, we’ll need everybody’s voices. The market players will need to actively engage the regulators, and also to begin whetting the investing public’s appetite so as to create a groundswell of expectation and impatience.

I have a dream. I dream that one day Filipinos’ savings rates might approach those of our neighbors in East Asia, and that we might finally become the latest tiger economy. I dream that, thanks to a rising tide of long-term monies provided by PERA contributors, there will be patient capital available for longer-term purposes in infrastructure and other industries, and that domestic employment might blossom, thereby reversing OFW deployments and the hollowing-out of Filipino families. It is a captivating pipe dream. By itself, PERA will not magically bring this dream about and cure all ills, though it would be a great help in this. At a higher plane of analysis, better governance is really the chief key to improving the climate for both the propagation of capital and the retention of human talent.

Better governance is not a destination or a summit, but is instead a never-ending process, and a practice. One small way we as citizens can practice demanding better governance from our government is by pressuring our PERA regulators to design the IRRs reasonably well (not make them overprotective, restrictive, byzantine, and loophole-ridden) – and to please finish the job at least within our lifetimes, for God’s sake.

The Reverend Jackson's Tears

IT’S EASY TO GET SWEPT UP in the moment, for this was certainly a historic event for not just Americans but for all people on the planet. I will long remember the moving sight of the Reverend Jesse Jackson holding his finger to half-open lips, eyes fixed into the distance, and cheeks shiny with the smear of tears. You could almost feel he was in a religious trance, savoring a glimpse of the promised land that had been denied his “Moses”, Dr. Martin Luther King. I also found touchingly tragic the high expectations voiced by ordinary Kenyans about how Barack Obama would bend his godlike visage towards the plight of their poor and divided country. I understand some Latin American and Asian communities partied at the news, or at least were impressed by the sight of America living up to its ideal of equal opportunity – even consenting to confer the highest power to a member of an ethnic minority.

A colleague of mine joked that Jackson was crying not out of joy at this triumph for blacks; instead he was thinking: “damn, that should’ve been me doing the acceptance speech!” It's boorish to believe that, to say the least. But the joke got me thinking: perhaps the US was not yet ripe for a black president when Jackson sought the Democratic nomination. Or maybe voters could not shake the recollection of his more militant youth, whereas Obama has a more conciliating, uniting personality. What’s undeniable is that America has undergone a tremendous demographic shift in recent decades, and this trend continues apace. One could easily imagine Jackson rationalizing to himself that all this was achieved in God’s time, and by God’s choice of prophet.

Yet if the passage of time, the sea change in the composition of American voters, and idiosyncratic differences between Jackson's and Obama's personalities all conspired to, at long last, devise conditions hospitable to the first black US president, more than anything else it was the faltering economy that provided the motive force behind Obama’s surge in the closing weeks of the campaign. The specter of higher unemployment was what really turned a dead heat into a clear advantage over John McCain's survey numbers.

If you look at the popular vote on election day rather than the electoral college results, it was not the thumping victory, not the sweeping mandate that the liberal media paints. Lots of people still voted for McCain, and they had mighty sound reasons for this as well. Americans voted, by and large, according to their parochial concerns, and not just because the world was watching. An electoral college landslide just means superior campaigning, but not necessarily dominance measured by that most purely democratic metric of one person, one vote.

It’s just as well that the voice of realpolitik continues to be clearly heard above the jubilation of the moment. For instance, the Arab street shrugged that American policy may not materially change in the near term, especially since the Bush-created morass would be hard to undo. Obama himself recognized in his acceptance speech that folks should brace themselves for disappointments and setbacks along the road to change. With so much on his plate (and all of it vegetables! Yuck!), the new American president should not be saddled with unrealistic expectations. Not even Superman could patch up the economy, bring the troops home from Iraq, stamp out Al Qaeda, reverse global warming, etc., etc. overnight.

It's sad that race still matters to many Americans; but Obama's victory has forever narrowed the elbow room within the racist argument. For the moment, America deserves some measure of congratulations from the rest of us. By allowing a black man to govern in the White House, the US has clawed back a bit of its badly-dissipated prestige and moral ascendancy. Well done, America.

Smash-Up at the Corner of Wall and Main

THAT CRASHING DIN you noticed (wherever you are in the world) was the sound of Americans’ 401(k)s and IRAs toppling inwards, like the mighty twin towers of 9/11. It was the price that everyday folks paid for the lack of transparency in the over-the-counter credit and credit derivatives markets.

Smarter minds have long since dissected last year’s subprime blow-up, which triggered this year’s meltdown in the wider capital markets. Essentially, institutional investors were driving blindly, and with reckless gusto, throughout the entire sleazy party, which lasted for about a couple of decades (the length of the party being a scandal in itself). Institutions either mistakenly believed they were buying docile financial animals (or at least hedged instruments, or risks with some kind of recourse), or they were fully aware they were shoveling cr*p in the faith that some greater fool down the line would be left holding the bag.

But let’s not pin all the blame on Wall Street, folks, for tens of millions of Joe the Plumbers were complicit as well. First of all, there are those moaners and groaners who called their congressmen to scupper Paulson’s initial bailout package because it seemed the bright boys and girls of Wall Street were being dealt jail pass cards at the expense of Main Street’s retirement savings.

Long-term money should not worry too much about this meltdown – assuming it’s really and honestly long-term. If you’re still at least ten years away from using your 401(k) or IRA, then relax: the markets should have recovered a long way by then – even if the world goes into a 1930s-style depression (and, frankly, I doubt the US will see a recession of more than a few quarters). Instead, you should seize the day: accumulate unusually-cheap assets with solid long-term prospects.

But if you’re set to retire in less than ten years, and your 401(k) or IRA got hit by the meltdown, then I have a question for you. Who forced you (at gunpoint even, perhaps) to overweight equities? Shouldn’t you have been moving your asset allocation towards more conservative vehicles? Whining is not allowed.

Second, many denizens of Main Street joined the party by spending beyond their means, and piling up consumer debt which could not be serviced. Americans can only blame themselves for taking on those huge mortgages, rolling over those credit card balances, etc. They certainly can’t plead that the devil (of Madison Avenue) made them do it. In the first place, Main Street provided the fuel for the wildfire. And so just as global warming has belatedly awakened America to the need for environmental sustainability, hopefully the ongoing financial debacle has also provided US households important lessons in financial and economic sustainability.

So as we gape, stunned, at the massive wreck at the intersection of Wall and Main Streets, let’s be mindful about pointing fingers over who was blinded by greed. The truth is, we all sped into this mess, and we all have blood on our hands. Let’s now roll up our sleeves and help one another clean up this detritus.

Homestretch for Barack

ALTHOUGH I LIVE IN THE PHILIPPINES, I've avidly followed American presidential politics for many years. As a child back in the mid-'70s, I devoured every issue of my dad's TIME Magazine left lying around the house, especially during the months leading up to elections. I clearly remember reading about Nixon's impeachment (though I only half-understood the details), Jerry Ford's forehead's frequent encounters with the doorways of aircraft, Mike Dukakis' tank-driving skills (or lack thereof), and other vignettes both great and trivial. When CNN burst on the scene, I could hardly get enough coverage. In short, I was a total nerd for U.S. politics.

Today, I no longer belong to the fringe. The world is now more interconnected by cross-border trade and investment, the imploding capital markets, the Internet and broadband and mobile conveniences, geopolitics, fundamentalist terrorism, the threat of pandemics, military overstretch by the global hegemon, and unfolding climate change. Thus, more than ever, more eyes are trained on the political leadership of the United States, and what it could mean for everyman in Harare, Reykjavik, and General Santos City.

What will the new U.S. administration bring? The world is keeping its expectations low, but you can feel the demand for fresh ideas and direction bristling with urgency just beneath the surface. Please, let it be a new day. Deliver us from Depression. It's interesting that the world outside the U.S. overwhelmingly favors Obama. Even the ongoing Internet poll being conducted by the conservative publication The Economist shows that the world is turned overwhelmingly against McCain. (See http://www.economist.com/vote2008/)

Now that we've just seen the third McCain-Obama debate, and also had a healthy dose of the CNN pundits' post-debate debate, it seems momentum remains with Obama (at least if you believe the polls). If the U.S. economy and capital markets continue looking sour through the next 2+ weeks, Barack Obama will almost certainly be elected the 44th president. Given what he faces, I don't know whether the next president deserves congratulations or condolences. Still, I for one, will probably breathe a sigh of relief, because the locus of uncertainty should have narrowed considerably after Election Day. One less wild card for the world to deal with in a year full of unpleasant surprises. Of course, we'll always find new problems to occupy ourselves with, but at least for the short term, I suspect a new mandate in the White House should help to counteract somewhat the intense instability and nervousness the world has been afflicted with of late.

Good luck to all of us!