Corporate Watch

No, it was not the non-working national holiday that some malicious minds thought was intended to celebrate, for the first time ever, the 45th year of the declaration of martial law by the deposed dictator Ferdinand Marcos. Even in Marcos’s 14 years of dictatorship, Sept. 21 was not an anniversary to merit a non-working holiday.

But President Rodrigo Duterte had announced, one week before “the anniversary” of Marcos’ martial law that he was going to declare Sept. 21 a holiday for government workers and students in Metro Manila in anticipation of the mass demonstrations against his administration’s war on drugs and alleged extrajudicial killings on that day (, 09.15.2017). The Movement Against Tyranny gave notice of protests at Mendiola and the Rizal Park, joined by 42 schools in Metro Manila, Luzon, Visayas and Mindanao, together with other cause-oriented groups such as Ugat Lahi, Karapatan, and Anakbayan, and minority coalition Sandugo, among others. The political administration promptly renamed September 21 the “National Day of Protest” (CNN, 09.15.2017).

Yet at 9:30 a.m., the opening bell at the Philippine Stock Exchange rang as usual for the Thursday’s trading day, which would end as it does Monday to Friday, at 3:30 p.m. “After rising by more than 1% in early afternoon trading, the PSEi settled with a 67.54-point gain or 0.82% to close at 8,286.86, a few points away from its all-time high of 8,294.14 logged on Monday. The all shares index climbed 30.96 points or 0.63% to 4,885” (BusinessWorld, 09.22.2017).

Traders think the trend is unmistakably up, as the technical charts show. Mr. Harry G. Liu, president of Summit Securities, Inc., said “the protest movements during yesterday’s 45th anniversary of the martial law declaration in 1972 had not caused disruption in the stock and currency markets — the investing public is showing confidence” (Ibid.). Note that Sept. 21 is still called “the anniversary of martial law,” a persistent label that overrides “Day of Protest” or any other arbitrary label.

The Metro Manila police estimates that around 5,000 attended anti-Duterte protests, while 3,000 were with pro-Duterte groups (CNN Philippines, 09.21.2017). Yet “as angry voices were raised in the streets, Philippine shares were rising to new highs,” Business Nightly reported on the evening of Sept. 21 (ANC, 09.21.2017). “Philippine financial markets have decoupled from the volatile political arena.” (Ibid.).

“Decoupled” is the operative word to explain why the Philippine stock market is thriving despite the growing fears about Duterte’s increasing show of dictatorial power. It is not an action word in the active voice, as in markets “decoupling” or detaching themselves from the influences of political risks, for the markets are not consciously and purposely removing themselves from the uncertainties caused by politics — the markets cannot of themselves do that. “Decouple” must be in the passive voice, as in “financial markets being decoupled from the political arena by…” advanced support technology and its on-time-real-time access to information and communication. There’s more than just grammar to see some meaning in the phenomenon of the markets now less affected by politics.

Immediate information, transactions, and settlements — thanks to technology, might have already redefined renowned economist Frank Knight’s stringent distinction between risk and uncertainty in Decision Theory (Frank H. Knight, Risk, Uncertainty, and Profit, 1921). Risk is present when future events occur with measurable probability; uncertainty is present when the likelihood of future events is indefinite or incalculable (Ibid.). That we are nearing “perfect information” or timely and complete information accessible to all (or most) downgrades unmeasurable uncertainties to measurable risks.

Another transparent input to risk decisions is the push and pull of market developments in the competitive global marketplace.

As the PSEi roared upwards last week, the peso whimpered to the P51 level following the US Federal Reserve’s announcement that it will unwind $42.2 trillion of Treasury bonds and mortgage-backed securities starting October, and hinted at another interest rate hike in December (BusinessWorld, S2/3 09.22-23.2017). The bellwether PSEi picked up as the peso depreciated.

At the Sept. 21 trading, the PSEi breached the 8,300 level and hit a new all-time intraday high of 8,321.81. The PSE noted that the index had gained 21.1% since the start of the year (BusinessWorld, 09.22-23.2017). “I think 10,000 is a good target to reach,” quoting Mr. Liu of Summit, as he added that the level is “noticeable” and a “technical possibility”…(and) “could be reached in a year or two, as technical charts show a line steadily moving upwards” (Ibid.).

“Technicals move only with fundamentals behind it. Technicals move ahead of fundamentals,” he said. “Market buys on anticipation of profit.” Always, it is an intuition for profit. And whatever fears there are — political, social or economic — are calculated risks in business.

Critics of President Rodrigo Duterte gathered in Mendiola (where anti-Marcos demonstrations were held in the 1980s), chanting “Marcos, Duterte, walang pinagkaiba, pumapatay sila [Marcos, Duterte, no different, they both kill]” (CNN Philippines, 09.21.2017). Across them, on the side of the Mendiola Peace Arch commemorating the bloodied students’ protest in Marcos’s time, supporters of Duterte declared, “We want to inform our fellowmen, our president that we are here to support, that no one can take back the peace we are experiencing now” (Ibid).

At the Luneta, the rally against ‘tyranny and dictatorship’ held a concert, and listened to activist speakers, until at 8 p.m., they rang bells and joined the nationwide ringing of church bells called for by the Catholic Bishops of the Philippines. Never again.

But then again, it’s still “business as usual” for business.


Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.