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Must-reads of 2017 come with some behavior lessons

By Cass R. Sunstein

IN 2017, hundreds of thousands of books were published in the United States alone. Many of them were terrific, and some were sensational (OK, I haven’t read all of them, not by a long shot, but still). Here are the five best:

THE ESSEX SERPENT
BY SARAH PERRY

Perry’s tale seems to focus on a search for a mysterious, otherworldly creature, but her novel is really about friendship, female independence, and longing. At its core is a romance, free of clichés, involving misses and near-misses, cluelessness, secrets, understanding and soulmates.

In most years, you can’t find a contemporary novel to put in the same company with the works of Jane Austen, Charles Dickens and Thomas Hardy. The Essex Serpent belongs right there.

THE RISE AND FALL OF D.O.D.O.
BY NEAL STEPHENSON AND NICOLE GALLAND

For many people, science fiction is literature’s pimply faced teenager: awkward, noisy, a bit of an embarrassment. But at its best, science fiction illuminates our world by looking at it sideways — presenting its most familiar features as puzzles, or demonstrating that with a little push here or a tug there, things could be radically different.

Stephenson and Galland start with a bold premise, to the effect that magic was once real but died out. More precisely, it died in 1850, when the rise of photography essentially murdered it. As one character puts it, “Photography breaks magic by embalming a specific moment — one version of reality — into a recorded image.”

That’s brilliant, and in a way, it’s even true. Stephenson and Galland breathe new life into old ideas about counterfactual history and time travel. That’s pretty magical.

RECKLESS DAUGHTER: A PORTRAIT OF JONI MITCHELL
BY DAVID YAFFE

Joni Mitchell belongs at or near the top of any list of the greatest singer-songwriters from 1960 to the present. She was astonishingly inventive. It is true, but not nearly enough, to say that she drew on folk, pop, and jazz. Her music is all her own.

Yaffe demonstrates that Mitchell’s mercurial life has been as bold, creative, and intriguing as her songs. He captures Mitchell’s love-hate relationship with what she called, in one of her early triumphs, an “urge for going” — and with a condition that she described, with both irony and defiance, as “busy being free.”

THE UNDOING PROJECT
BY MICHAEL LEWIS

Amos Tversky and Daniel Kahneman, Israeli psychologists, are more responsible than anyone else for the rise of behavioral science, which explores how human beings deviate from perfect rationality. Even so, the story of their collaboration would not appear to be a promising basis for a book. Who wants to read about two middle-aged men, patiently identifying behavioral biases and cataloging departures from expected utility theory? With equations?

But Lewis’s book is captivating, above all because he brings Tversky and Kahneman to life. Charismatic, quick and disciplined, Tversky was an optimist, not only because it suited his personality but also because, as he put it, “When you are a pessimist and the bad thing happens, you live it twice. Once when you worry about it, and the second time when it happens.” Introverted and self-critical, Kahneman was a pessimist and also a font of ideas, with extraordinary insight into where human intuition goes wrong.

The two had a kind of love affair. They produced extraordinary work independently, but their best work was done together. Lewis explains why.

THE INFLUENTIAL MIND
BY TALI SHAROT

If you want to influence people, what should you do? Sharot, a neuroscientist at University College London, demonstrates that many of our answers are wrong. If, for example, you try to frighten people, they might just tune you out. It’s better to try to get people to want to agree with you — which is why it is often more effective to promise a reward, creating a kind of “Go!” reaction in the brain.

One of Sharot’s most important discussions focuses on a topic to which social scientists have given far too little attention: the importance of maintaining a sense of control. John Locke, a character on the television show “Lost,” captured something universal when he proclaimed, time and again, “Don’t tell me what I can’t do!”

Sharot shows that once we understand the failure of so many of our efforts at influencing others, we can identify more promising strategies. For example, “Offering control, or even perceived control, is ultimately the best way to get people to act.”

Smart parents know that — and so do the best teachers, doctors, investment advisers, and employers.

 

BLOOMBERG

FDC amends terms of share swap deal for Pacific Sugar

FILINVEST Development Corp. (FDC) has amended the terms of its share swap deal with AL Gotianun, Inc. (ALGI) for the purchase of Pacific Sugar Holdings Corp. (PSHC), effectively prompting the latter to return 542.50 million FDC shares.

In a disclosure to the stock exchange on Tuesday, FDC said its board of directors has approved the partial rescission of the deed of exchange between the two parties signed last June 29, 2007. This involves ALGI’s return of 542.50 million shares to FDC priced at P3.91 billion.

ALGI will also be returning a total of 126.51 million shares released as stock dividends and P315.75 million in cash dividends to FDC, since the time of the agreement.

FDC purchased PSHC back in 2007, through a share swap deal where ALGI will receive 1.55 billion FDC shares in exchange for ALGI’s 1.55 million shares in PSHC.

PSHC is considered to be one of the major sugar producers in the country through its wholly owned units Cotabato Sugar Central Co., Inc. and Davao Sugar Central Co. FDC President Josephine Gotianun-Yap earlier said this would allow them to capitalize on the growth of the sugar industry.

The Gotianun-led firm said it decided to amend the agreement to adjust PSHC’s valuation in accordance with its future plans for growth.

“The partial rescission was made at the instance of management who saw the need and propriety to adjust the valuation of PSHC, taking into consideration the fact that the various projects that PSHC had planned to implement will no longer be pursued in the foreseeable future,” FDC said.

The company noted this amendment will benefit its minority shareholders.

“The partial return by ALGI of FDC shares to FDC will reduce ALGI’s shareholdings in FDC from the current 88.62% down to 87.74%. On the other hand, minority shareholders’ interest will increase from 10.08% to 10.86%,” according to FDC.

The agreement will further reduce FDC’s outstanding shares to 8.65 billion shares, from its current 9.32 billion shares, raising its earnings per share.

FDC grew its attributable profit by 17% to P4.81 billion in the first nine months of 2017, following an 18% increase in revenues to P42.53 billion. — Arra B. Francia

Shares seen sideways on 2017’s last trading days

THE MAIN INDEX will likely see thinner volume during the shortened trading week as foreign fund managers take a break for the holiday season.

The 30-member Philippine Stock Exchange index (PSEi) finished in the green last Friday, rising 0.64% or 54.03 points to 8,432.31, before taking a two-day break on Dec. 25 and 26 for the Christmas holidays.

“Local participants might dominate the week’s three-day trading session focusing mostly on second- and third-tier shares. Any weakness in select large-cap stocks would be a good window for players to move in, especially those with good stories to unfold next year,” online brokerage 2TradeAsia.com said in a weekly market note.

The online brokerage added that investors will be watching out for the capital expenditure (capex) programs of listed firms, as this would dictate their growth prospects in 2018.

Among the companies that have already announced their capex programs for 2018 are Metro Pacific Investments, Corp. (MPIC), Ayala Land, Inc. (ALI), and Aboitiz Equity Ventures, Inc. (AEV).

MPIC has set its spending for next year at P100 billion as it focuses to grow its tollroads, power, water, rail, hospital, and logistics businesses. For its part, property giant ALI disclosed that while it has yet to set the final figure, its capex could reach P100 billion in 2018 as they launch more residential projects, counting on the surge of demand for more housing developments.

Meanwhile, AEV will be trimming its capex to around P40-P50 billion in 2018, lower than the P77 billion it allotted this year, while still focusing on the growth of its power business.

As this will be the last week of trading for this year, analysts are already placing bets that the bellwether index could rally to breach the 9,000 mark next year.

First Grade Finance, Inc. Managing Director Astro C. del Castillo noted that this could come on the back of the Tax Reform for Acceleration and Inclusion (TRAIN) Act signed by President Rodrigo R. Duterte earlier this month.

“The political will of the president in getting the necessary legislations passed will help push investor sentiment up, and easily push the index toward the 9,000 level in 2018,” Mr. Del Castillo said in an interview last week.

Changes in the country’s tax program will be implemented come Jan. 1 as part of the first of five packages under TRAIN.

“As the news gets finally absorbed, anticipate some fund managers to lock in on rallies, until the net benefit of the sector gets known,” 2TradeAsia.com said.

Analysts pegged the market’s immediate support within the range of 8,370 to 8,400, with resistance from 8,500 to 8,570.

Meanwhile, Wall Street’s major indexes dipped on Friday in low trading volume before the holiday weekend as several blue-chip stocks slipped, including Nike.

President Donald J. Trump signed a massive $1.5-trillion tax overhaul into law on Friday and also approved a short-term spending bill that averts a possible government shutdown. — A.B. Francia with Reuters

Davao Region focused on boosting output of cacao, coffee, coconut crops

By Carmelito Q. Francisco,
Correspondent

DAVAO CITY — The Department of Trade and Industry in the Davao Region is focusing on developing cacao, coffee and coconut next year via the provision of about P34 million in shared-service facilities.

The agency’s regional director, Maria Belenda Q. Ambi, said last week that these facilities will focus on improving the marketability of the crops.

“(The projects) are still subject to review,” Ms. Ambi said, noting that 2018 funding is  about the same as the levels in 2015, the last time its budget was raised by the national office.

This year, the agency was able to fund P1.22 million in shared-service facilities, which were focused on dairy production in the city and virgin coconut oil in Compostela Valley.

The provision of shared-service facilities hopes to enhance the output of micro, small and medium enterprises and to make their products more competitive. A facility is provided to a group of producers to maximize its use.

In the cacao industry, the city government is hoping to build on the gains made by Davao products on the international market. Davao City Mayor Sara Z. Duterte-Carpio has set aside P2 million to fund the cacao production program of the city government.

“We have exponentially grown our economy since the discovery of our potential to produce cacao and chocolate products. As we can supply at least 80% of our country’s total cacao demand, Davao Region is now moving towards becoming the Chocolate Capital of the Philippines,” said Ms. Duterte as the city government opened a cacao outlet at its Pasalubong Center.

According to the Philippine Statistics Authority, the region produced 5,073.83 metric tons last year out of the 6,262.77 metric-ton national total.

The strategy of the industry, said Valente D. Turtur, Cacao Industry Development Association of Mindanao, Inc. executive director, is to improve production with buyers seeking more volume.

To do this, cacao producers — about 20,000 farmers in the region — need to plant high-yielding quality seedlings, he added.

Coffee industry stakeholders have urged producers to focus on producing the so-called specialty coffee as well as enhance the quality of the beans.

In late October, Pacita U. Juan, president of the Philippine Coffee Board, said that the government must help provide facilities to enhance the quality of the crop.

Ms. Juan said the easiest way to do this is to allow coffee producers to tap the research and development facilities of state universities.

The coconut industry, on the other hand, has also been pushing for the establishment of facilities that will help coconut growers in the development of high-value products.

Migdonio C. Clamor, Jr., Davao Region Coconut Industry Cluster executive director, earlier said that aside from rehabilitating coconut farms, there is also a need to help farmers add value to their products and not rely on copra.

Mr. Clamor said that some producers have abandoned copra production by selling whole nuts, saving on labor costs. A few of them, on the other hand, have ventured into producing coconut textiles, sugar both from sap and shell and other similar products.

He said a community in Pantukan, Compostela Valley has started producing these items in small quantities. “They will still need assistance so they could bring their production to commercial quantities,” he said.

Bragging rights

LeBron James was exceedingly gracious in the aftermath of a Christmas Day defeat that brought back bitter memories of the 2017 National Basketball Association Finals. He talked about certified game-changer Kevin Durant in glowing terms; “He’s one of the leaders in shot blocks a game. He had five tonight so he’s been doing a heck of a job of taking the individual matchup and protecting the rim, too,” the four-time league Most Valuable Player noted of the Cavaliers’ biggest thorn during their bridesmaid finish and through yesterday’s set-to.

Significantly, James could have lamented the spotty officiating that marred the highly anticipated contest. On at least two occasions in the crunch, he was fouled by the very player he praised; the armbar contact with 24 and a half ticks left in the match was particularly unsettling, as it turned what should have been a certain dunk into a turnover. And just like that, a one-point deficit turned into five, and the Cavaliers were done. Instead, he willingly gave Durant — with whom he exchanged pleasantries after the buzzer — props, in no small measure because he understood that he outcome was determined by a confluence of self-injurious events.

Given how James was amped for the occasion, he will, no doubt, lament his underwhelming showing; he went below his season averages across the board, with his seven turnovers glaringly making the Cavaliers’ uphill battle all the more Sisyphean in nature. Against the Warriors, whose chances of winning were pegged heading into the home stand to be anywhere between 75% and 90%, not taking care of the rock is fatal. And it certainly didn’t help that the visitors shot an atrocious 31.8% from the field.

Three weeks from now, the Cavaliers will try to return the favor at the Q. As with yesterday’s encounter, the upcoming one will not make or break their title hopes. James knows it, but couldn’t care less. At this point, and with the setback still fresh, bragging rights will be all that’s in his mind. He needs to pay the Warriors back. More importantly, he needs to pay Durant back. His body of work in his 15th year indicates that he’s as good as he has ever been, and he’s bent on showing it.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

The year when we started considering not owning a car

If you’ve been following automotive news with any sort of regularity, you’re likely familiar with the concept of autonomous (or self-driving) cars. That is the goal of the car industry — to one day build artificially intelligent vehicles that can navigate their way through traffic without the intervention of human pilots. Makes sense, since people are generally lousy, distracted, reckless, unruly and often intoxicated drivers.

Now, when we talk about self-driving cars, we only marvel at the prospect of futuristic motoring worthy of the Jetsons. And we only focus on the obsolescence of driving. What we fail to realize is that fully autonomous vehicles could also signal the end of individual car ownership. They’re eliminating driving because, eventually, there won’t be any need to buy cars. We will all just be passengers in a ride-sharing world. Unsolvable traffic issues around the globe will make sure of that.

And so it has begun: We are now gradually being encouraged to start imagining an ideal environment where we don’t operate motor vehicles. Several industry events I attended this year, in fact, showcased technologies that pointed the way to autonomous driving. In one exercise, I drove an SUV that just wouldn’t allow me to hit any object while parking or changing lanes. It will only be a matter of time before the same SUV won’t allow us to even touch its steering wheel.

To bolster the legitimacy of my conspiracy theory, I’ve compiled the top motoring headlines of 2017 and all of them subliminally prime us for the day when we no longer own and drive cars.

There’s the revision of automotive excise tax, increasing the prices of many mass-market car models (while making luxury vehicles more affordable for 1% of the population). That’s just the beginning. With the tax reform, gasoline and diesel will likewise become more expensive in the next three years.

Also, remember that our Department of Transportation asked for Singapore’s help in solving Metro Manila’s traffic problem. The measures being looked at include taxing the use of main roads. So the objective is obvious: Make car ownership as costly as possible. Before long, the public will lose all taste for status-enhancing automobiles.

And then there’s the polarizing showdown between the Land Transportation Franchising and Regulatory Board (LTFRB) and transport network companies like Uber and Grab. With paid social media influencers leading the national conversation on this issue, even car owners were surprisingly okay with the idea of just opening the floodgates for ride-sharing app providers — to hell with the rule of law. And that’s probably because said car owners were already tired of driving and they just wanted to use Uber cars.

Speaking of Uber, after its drama-filled clash with the LTFRB in August, the company unleashed what I can only imagine to be a well-funded marketing campaign called “Unlocking Cities,” for which it paid a number of popular Web sites to spread its “owning cars is bad” doctrine. There is no more road space for brand-new cars, the campaign pointed out. Time to give them up and just consider ride-sharing. Of course, Uber isn’t really interested in decongesting our streets. What it really wants is for its countless cars to be the ones to clog the megalopolis. Ka-ching, in other words. But the deed was done: Hundreds of thousands of Internet users who saw the campaign’s well-produced video were subconsciously planted with the seeds of a society without privately owned cars.

Another prominent motoring news item this year is the cheating scandal that hit Japanese automakers and their suppliers. Apparently, they had been falsifying certifications for quality control and fuel economy. That’s on top of the faulty air bags they had been equipping our vehicles with. If even the most honest nation can’t be trusted to build us safe and efficient cars, whom else can we trust? How can we now drive our sedans with complete confidence that their air bags won’t shoot deadly shrapnel at us in the event of a collision? Translation: Why bother buying cars whose quality is suspect?

What about the Anti-Distracted Driving Act finally becoming a law? It’s as though our government was making us choose between using our mobile phones and driving our cars. Checking Facebook or focusing on the road? Watching YouTube or minding the car in front? Browsing Instagram or being alert to pedestrians? For many people with an inexplicable FOMO — that’s fear of missing out for my nonmillennial readers — the choice is a no-brainer: No more driving if it means being kept from glancing at their smartphones for more than three minutes.

Ah, and then there’s Waze, the community-based navigational app whose 2017 Driver Satisfaction Index placed the Philippines at the very bottom of its rankings. Which means our republic is the worst place in the world for driving with its gridlock, road rage, potholes and traffic mismanagement. If that doesn’t ruin the appeal of driving for you, you’re stupid.

Finally, there’s Maria Isabel Lopez, who got her license revoked for illegally using the special lane reserved for participants of the 31st ASEAN Summit, and then bragging about it in an infuriating Facebook post. I mean, do you really want to share the road with cretins who won’t think twice about breaking traffic rules for convenience’s sake?

All of these motoring stories in the past 12 months served as undeniable signs that car ownership is soon coming to an end. Want more proof? In 2017, Saudi Arabia announced that it was finally allowing its women to drive. Why do I have this feeling that the Arabs know something is about to go down?

How PSEi member stocks performed — December 22, 2017

Here’s a quick glance at how PSEi stocks fared on Friday, December 22, 2017.

iPhone X prices among select Asian markets

TRAIN to aid SSS pension hike plan

THE Social Security System (SSS) remained keen on a pension contribution hike for 2018, as members’ additional take-home pay from the tax reform program could aid them in funding it.

However, Social Security System (SSS) President and Chief Executive Officer Emmanuel F. Dooc said Congress needs to pass the amendments to the pension fund’s charter that would allow them to raise contribution rates, without having an Executive Order (EO) signed by the President.

“Insofar as we are concerned, we still have to wait for the passage of the SSS charter amendment which will give us the power to do it,” he said in a text message to BusinessWorld.

The House of Representatives approved on final reading House Bill 2158 in January this year, which amends Republic Act 1161 or the Social Security Act.

However, its counterpart measure — Senate Bill No. 1198 — is currently pending a committee report.

He said that he hopes that the bill will pass “early next year.”

With the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, Mr. Dooc said that contributing members should cope up easily with the planned hike.

“The TRAIN will both directly and indirectly make it easier for our members and employers to shoulder the contribution hike. The tax relief and the resulting economic developments will boost their savings and income. The rising tide will lift all boats,” said Mr. Dooc.

The tax measure lowers individual income tax rates, except for the “ultra-rich.”

The SSS earlier eyed a 1.5% increase to 12.5% for the member’s contribution rate out of their monthly salary.

The contribution hike was initially planned to be implemented in May, as it was made a condition to the first P1,000 across-the-board pension hike approved by the President in January. Ever since, no EO was signed.

The second P1,000 pension increase is expected by 2019. Economic managers said that without a corresponding contribution increase, the pension hikes would cut the pension fund’s actuarial life by 14 to 17 years.

Aside from a contribution hike, the SSS said that it wants to raise the maximum salary credit to P20,000 in the first year from the current P16,000. This will then be hiked to P25,000 in the succeeding year until it reaches P30,000.  Elijah Joseph C. Tubayan

Nation at a Glance — (12/27/17)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Oil’s bull run wavers as investors pause

OIL’S BULL RUN is grinding to a halt.

Hedge funds lowered their bets on Brent crude after they rose to a record a week earlier. And the net-bullish position on West Texas Intermediate (WTI), which hit a nine-month high last month, dwindled for a third straight week. The message: After a months-long build-up, investors are wavering, concerned US crude will continue to boom in 2018, undercutting the Organization of the Petroleum Exporting Countries (OPEC)’s push to drain a global glut.

“It seems like now most people have got their positions and are waiting to see what 2018 brings,” said  Rob Thummel, managing director at Tortoise Capital Advisors LLC.

Oil futures in New York have jumped almost 40% since June as OPEC and its allies extended their production-cut deal and US inventories shrank to two-year lows. But the decline in American stockpiles is largely due to refinery maintenance and exports near an all-time high. Meanwhile, gushers in the country are producing at a record pace.

Global stockpiles won’t fall enough to reach the level targeted by OPEC when the group meets in June, Saudi Arabia’s Energy Minister Khalid Al-Falih said last week.

American output is poised to reach 9.99 million barrels a day in May, according to the Energy Information Administration. That would surpass Saudi Arabia’s curtailed production of 9.97 million barrels a day in November.

The Brent net-long position — the difference between bets on a price increase and wagers on a drop — fell 1.1% to 538,045 contracts in the week ended Dec. 19, according to data from ICE Futures Europe. That’s after reaching a record 544,051 contracts in the previous week. Longs fell 1.2%, while shorts decreased 1.8%.

Money managers cut their WTI net-long position by 1.8% to 383,828 futures and options during the week, according to data from the US Commodity Futures Trading Commission on Friday. Longs fell by 1.2%, while shorts rose 3.9%.

“It’s been a good year,” but there’s “some worry about what next month is going to bring,” said John Kilduff, founding partner at Again Capital LLC in New York. “There’s not as much enthusiasm about the OPEC/non-OPEC accord as there was even a few weeks ago.”

The North Sea’s Forties Pipeline System, which carries crude used to price the Dated Brent benchmark, is set to return to normal flows early in the new year, according to a statement from operator Ineos Group. The outage, which gave a boost to prices, was the first time a force majeure had been declared in the North Sea since 1988. Repairs are expected to be completed by “around Christmas.”

In the fuel market, money managers reduced their net-long position on benchmark US gasoline by 2.1%. Meanwhile, the net-bullish position on diesel rose by 1.9%.

Heading into next year, investors will be watching how long it takes to get inventories back to the five-year average, Thummel said. The OPEC deal extension brought some certainty to the market, which is now waiting to see how the cuts and US production play out.

“That was the big cloud overhanging the oil market and prices,” he said. — Bloomberg

The ingredients for a successful small business

When venturing into business, an entrepreneurial bent is not always enough. Theoretical knowledge must be paired with practical knowledge essential in running a long‑lasting business.

This is the belief of 27‑year‑old Bea Atienza before establishing her own bakeshop called Bellefleur by Beatrix. In her case, she thought that her knowledge about baking alone would not give her an easy pass to a successful business.

Atienza, whose interest in baking began in high school where she would bring homemade cookies to her classmates, instead continued to crave for learning that she would later on use in operating her own business.

“My classmates tried them and liked them so much. They started asking if they could order more. That’s when I realized that people are willing to purchase what I bake and turn it into a business,” she recounted.

In college, she left the Philippines to take up a four‑year business course and finished another three‑month culinary course upon her return.

Following the short course, she enrolled in the baking and pastry arts program of the Center for Culinary Arts where she learned the ropes of baking entrepreneurship, including product development, costing and marketing, as well as creating a viable business plan.

“Immediately, I was taught the ins and outs of forming and maintaining a baking business. Aside from the fundamentals of baking, I learned how to mass-produce baked goods, how to find a target market to finding an ideal location,” she said.

Equipped with mentoring she gained from the culinary school, Atienza began her business venture and opened Bellefleur as an online store offering pastries like cakes, cupcakes, and cookies, among others.

In July this year, she stepped out of the digital space and launched a physical version of Bellefleur at Unimart Greenhills, located in one the business districts in the metro.

The Frozen Ube Brazo has become a favorite among its patrons that even Filipinos abroad order it online for their loved ones living here in the country. Bestsellers also include the Double Decker Ube Leche Flan, which sells out everyday.

“I love brazo, but I also wanted to enhance the flavor by adding ube for  a balanced sweetness, just like what my mentors at CCA taught me about not adding too much sweetness when baking,’ she said.

“LinkedIn has millions of job posts and distributes them to candidates based on skill sets, but it’s your descriptions that will compel them to view and apply,” it added.

With her sweet success, Atienza seeks to reach more milestones for her business in the future. Her plans include launching more kiosks for Bellefleur and cafes bearing her brand.