Shocking Electricity Charges

Power. Not the political kind. Nor the kind associated with professional athletes. Not even the awesome power mother nature can unleash. This week’s topic for the Small Business File is simply about power of the electrical kind.

This past week I needed to get a temporary electrical permit. It is for a project I have been working on and is at a new site different to where I live and have a business. When I went to the local electrical cooperative, we were told that the permit would not be processed until the account of the previous occupant was settled. Now, imagine how I felt when I was told we’d have to pay P17,000.00 Pesos, because that is what the previous occupant had rung up in charges and skipped out on. I was a little bit shocked, but  perhaps perplexed is a better word to describe my wonder.

Of course I refused to pay the charges, but the billing clerk told me that was their policy. I proceeded to ask if it would be OK for me to charge anyone at my coffee house P1000.00 for their cappuccino, simply because they happened to sit at the same table as a previous occupant who skipped out on paying their bill. Of course, this was a fictitious example, as no event ever happened, but the example was provided to demonstrate how ridiculous such a policy is. To me, it is just not possible to even think that anyone with absolutely no connection to a previous account should be held liable for the actions or account of another.

It didn’t matter. I was still informed: “That’s our policy, sir.”

So, I did what needed to be done. I asked for the person in charge of billing to write it on company letterhead that it was their policy to force new accounts to pay the delinquent accounts of total strangers before their permit could be processed. I also asked that the letter stating that as their official policy be signed by the officer in charge.

In 10 minutes, my permit was processed, with no more questions asked, and no more word of any outstanding charges to be paid.

What happened to me at the electrical utility is not likely to happen to any of you, but it could. The real issue is how difficult it can be to get your utilities lined up when opening a business. There is a lot of red-tape. Forms to be filled out. Lines to wait in to pay deposits and fees. Then more lines to take that paperwork to. In my case, after spending a whole afternoon getting the permit signed off on, I was told to come back in 2 days to get my free meter and 30 meters of wire. After days of getting my paperwork together, then a whole afternoon arguing as to why I should get my permit, I was just happy to have the permit approved. I could wait the two days, even though it was an inconvenience.

After two days, now Thursday, I returned to collect my meter and 30meters of wire, but was told “Sorry, sir, no stock”. Come try again next Tuesday. I left. What else could I do? Again, the point here is to state the obvious: don’t expect things to run smoothly when dealing with utilities or many other government or quasi-government line-agencies. Sometimes things work out great, but many times you’ll face red-tape from bottlenecks like this. It’s part of being an entrepreneur in the Philippines!

There are a few other things to consider regarding electrical power in the Philippines. Commercial accounts pay higher rates per kilowatt hour than residential rates, so please remember to take this into consideration when costing out electricity charges in any business planning activities. And because electricity in the Philippines is in general much higher than in other countries, there is a real need to watch electricity usage very closely. If you’re not an environmentalist, you better become one fast! If you don’t try and conserve electricity, you just may find your utility charges run higher that just about every other input cost you may have in your entire business. That’s no joke. You read it correctly. Utility charges for commercial accounts are extremely high and a major obstacle to many business ventures, small or large.

So what can we learn from today’s article?

First, build in very large allowances of time during start-up to get things like utilities lined up and in working order. It will take much longer than you could ever imagine.

Second, be prepared to pay higher rates for power utilization as a small business owner.

Third, be energy conscious. Spend a bit more and get energy-efficient appliances. Use energy-saving light bulbs wherever possible. Have staff turn off all lights and appliances when not in use or needed.

Good luck to all of you facing similar adventures in power utilization!

Green fingers for survival

Ten Business Ideas I’m Thinking of Trying

A while ago, I responded to an inquiry on Bob’s Snowbird posting, where I mentioned that my travel schedule is starting to get very tiring. Quite frankly, I want to settle down a bit more. My response got me thinking about the term “Snowbird” and retirement. Ugh! Bob’s picture of the two old goats sitting there looked like one of those funeral home ads or adult diaper ads. Not for me!

Additionally, there are quite a number of inquiries about earning a living in the Philippines that are posted in the forum, so I thought about writing about some business ideas that I believe could generate a decent income. First off, I would highly recommend everyone read Bob’s book, “49 Ways to Make a Living in the Philippines”, as a first step, before jumping in with anything. This list isn’t intended to detract in any way from his book, but rather, it is a list of things that Rebecca and I have discussed to fund our retirement someday. I’m not the type of person who can sit still. Retirement for me will involve work. Otherwise, I’ll go stir crazy. That being said, I truly believe that if you want to make money in the Philippines, you have to do it yourself.

A brief note about what doesn’t work. Nearly every expat I’ve met has family that have approached them about starting Sari Sari, Jeepney, Taxi, or Tricy businesses. These almost never work over the long term, and usually fail in the short term. There are many reasons, but, particularly in the provinces, you will find great difficulty in running such enterprises as a true business. I suggest you avoid even thinking about getting involved.

We’ve already started the fish pond business, and I’ve put some money into it, but that business is for Becky’s family… I’m thinking of businesses for Rebecca and myself alone. Something completely separate. I still have a couple of years to put these plans into play. I’m tied to my current job and far too busy right now to get too involved. This is for the future. So, here’s my list.

Agricultural

I’ve thought about what is produced in the Philippines, and agricultural goods are a top product… Indeed, some of the finest fruits and vegetables in the world are produced here. Therefore, low-level food manufacturing has some potential. I am thinking with an eye towards quality.

1. Bottled Holy Water: The thought was to make a deal with the Church and produce a product, Spirit Water: Good for the body and soul!” Nice bottle, with a different holy card tied to each bottle around the neck, so that customers could collect them all (Print 250 different ones up). I made the proposition to Father Carlos (50/50 split), but he had reservations since it comes too close to selling indulgences. That being said, there is a monastery in the States doing something similar, so perhaps it is feasible elsewhere in the country.
2. Flavored Lambanog: There are a couple small brands already out there, but why not use lambanog as a base for other drinks? Using tropical fruits and herbs, becoming totally a native product. See if aging the product in oak changes its’ character (or Bamboo barrels). Sell in the resorts and tourist areas.
3. Flavored beer: Mango beer. Pineapple beer. Similar to the Lambic made in Belgium (From Cherries, Peaches, and Raspberries there). I’m going to buy a brewing kit and give it a try. If palatable, it could just work. Great label: Topless girl holding two strategically placed mangoes, pineapples, rambutans, etc., depending on the flavor. Different label girl each month.
4. Philippine “Origin” Chocolates: Quality stuff for export. Use local fruits and local cacao. Premium price.
5. Mozzarella di Buffala: Carabao milk is virtually identical to the buffalo milk in Italy. My only reservation is if there are enough local buyers in Manila, given the short shelf life and difficulty keeping refrigerated. Perhaps aging the cheese or smoking it into a Filipino Provolone?
6. “Japanese Quality” dried fish: The last few trips to Japan, I brought back dried fish for Becky and her family. They absolutely LOVED them! Same species as is found here. This is purely a quality and packaging issue. Each fish is inspected and the packages are cryovac sealed, ensuring freshness. There are also many different flavors available (Teriyaki, Chili, Sesame, etc.). I believe that a significant market segment is in Manila that will pay the premium price for quality. These can also be exported.
7. Premium Ice Cream: There’s a few premium chains, but I’m thinking at the very local level. Tropical flavors that are unique to the Philippines (Durian, Mangosteen, etc.). We could even try it with Carabao milk (They did it with camel milk in the Middle East!).

Enough about food. Now, to building.

1. A dormitory for college students. We were thinking in Tuguegarao, near the nursing school. Most of the students come in each week and go home on weekends. 50 bed spaces, one daily meal included with all you can eat rice, no more than 150 pesos per night. We know someone doing this now. Security guards, so parents know the kids are safe. Sex segregated. Shop with school supplies and snacks in the lobby. Big screen TV in the common area with free DVD movie every night. We break even on the rent and make the profit from the store and concessions.

Online possibility

1. Business facilitation service. An online consulting “matchmaking”, helping companies to begin operations in the country. From arranging paperwork to getting staff. Online recruiting for workers. Staff attorneys, personnel officers, and marketing and PR managers.

Finally, general manufacturing.

1. Wire and Nail manufacturing: Most nails and barbed wire are imported from China. In the provinces, there are often shortages of these items. Once we purchase the equipment (relatively expensive, but it can be bought used abroad), we should be able to manufacture locally at a competitive price.

Anyway, the above is my list. You will note that I focus on manufacturing, rather than online. Bob covers online in far greater detail in his book. Which of the above happen remains to be seen, but the point of this article is mainly that there are business opportunities in the Philippines if you only take the time to look beyond the Sari Sari store setup. This country is very rich in natural and human resources. It is up to you to take advantage of these things. Most of the ideas I listed require some capital to start, but not enormous amounts of money. I’ve got a couple of more years in my present job before I put any of these ideas into action (Hey! I still have to finance the fish ponds and earn a living now!), but I feel it is prudent to look as far ahead as possible.

LiP Downtime

I want to announce that this coming weekend, LiP will have some downtime for maintenance. I have a few issues that I need to fix, and some new features that I will be installing as well. I’ve been needing to do a couple of things for sometime now, but have been trying to avoid having the site down. Some of this is stuff that I can’t really do “on the fly” while keeping the site live, so there will be a bit of downtime.

I have not finalized everything as of yet, but my thinking is that we will be looking at around 2 hours downtime, unless something seriously wrong happens!  You just never know what will happen when it comes to technology, but I don’t expect anything too difficult, so we will see.

As of now, I am expecting that I will start with the maintenance Saturday afternoon, Philippine Time, which would be late night Friday in the USA, or Saturday morning early in Europe.

When I have more precise information, I will announce it here.  For now, this is just a “heads up” for readers to expect some downtime on LiP this weekend.

I apologize for any inconvenience.

I’d like to meet you

A couple of weeks ago, I got a text message request from somebody who reads some of my websites, or so he said.  This fellow had been in communication with me in the past via e-mail, maybe 6 months ago or so, so I had no reason to expect anything unusual.  He got my cellphone number from one of my websites, as I do publish my phone number for those who need to contact me.  To be honest, I have two cellphone numbers, one which I publish and one which is private, mostly reserved for family.

Well, when this guy texted me, he told me that he wanted to meet with me.  I had no problem with that, as I try to meet readers whenever they are in town and ask if we can get together.  So, this guy asked if we could get together at 10am on a Monday morning at the Landco Building, a big Corporate Center here in Davao.  I agreed, had no reason to suspect that there was anything unusual.  I had no reason to suspect it… but somehow something didn’t sit right in my gut.  I somehow thought that there was something different about this meeting.

I showed up at the office where we were supposed to meet at the appointed time.  The fellow I was supposed to meet was not there, but the receptionist offered me a seat in the waiting area.  I sat down, and waited for the fellow to show up.  After a few minutes, I asked the receptionist, “What kind of company is this?”  She replied, “sir, we sell herbal products.”  “Hmmm,” I thought, “what is this all about?”

When my “friend” showed up, he sat down at the table where I was waiting and introduced himself.  He started explaining his various businesses to me.  The way he talked, you would think that he was a multi-billionaire, and the way he dressed would seem to confirm it.  The office was certainly very upscale too.  I wondered, what was I doing there?  Why did he want to talk to me?  After a bit of discussion I handed him my business card (which, by the way is called a calling card here).  He then handed me his business card.  When I looked at his business card, my suspicions were confirmed.  Something wasn’t right.

Here was this guy who was selling himself as some sort of very wealthy businessman.  On his business card, a number of words were misspelled.  On the words that were spelled incorrectly, he had used a pen to scratch out the mistakes!  Oh my, he certainly was not what he was passing himself off as!  No serious businessman would hand out business cards with errors corrected with a pen!

Since the time that the receptionist told me that the company was an herbal products company, I suspected that this was some kind of sales pitch.  Soon, it was confirmed.  I had suspected a friendly meeting with a reader, 30 minutes or maybe an hour.  This fellow had a full day planned for me.  Soon, he took me into another room so that I could view a movie, and listen to a sales pitch.  About 20 minutes in, and as soon as the magic words were mentioned - “how much will you need to invest….” - I stood up. He asked me, “what are you doing?”  I said “I am leaving now.”

What?  Leaving?

Yes, I told him that he asked me to meet and have coffee, and that I had not signed up for his multi-level-marketing seminar.  He was not happy.  I’m sorry, but I did not have time for this, and I certainly had no interest!

Well, to say the least, this was not exactly what I expected.  All along I had a gut feeling that something was not fully right about this, but did not know why I felt that way.  My gut was right though.  I should have not even wasted my time going, but at least I didn’t stay nearly as long as what he was expecting.

The biggest thing that I can’t understand,though, is why somebody like that would try to cheap out on the business cards!  I mean, if the printer makes a mistake on it, why not just throw them out and get them re-printed?

I’m lucky, though, this is the first time that I’ve had a situation like this when a “reader” has requested a get-together.  I hope it will also be the last!

Suit and Tie? You must be joking!

This week I had to travel to Norway for a major trade show in my industry. This show is one of around eight in the marine industry that we are essentially required to exhibit at or attend. Typically, they are held four per year on alternating years. Now, these shows are very much international in character, each attracting around 60,000 visitors from over 180 countries. Major companies spend hundreds of thousands of dollars on their exhibits at these shows and walking around the expo, you will hear conversations in dozens of different languages. One other thing becomes quickly apparent: Nearly everyone is wearing a suit and tie (except the “booth babes”… models hired to show a little leg and attract people to the stands). This week was a bit of a fashion disaster for me. I was up around 4:00AM for my flight to Oslo, grabbed a Diet Coke from the mini bar to guzzle on my drive to Berlin Airport, and promptly spilled it all over my suit while screwing around with locking the door. (I was staying at an old castle, Baron von Someone or Other’s hunting lodge. Kind of neat, but the room had one of those old iron locks with a big metal key.) Uh oh… only one suit with me. So, I go back into the room to change into a shirt and slacks, leaving my cell phone behind in the hotel room. I realized this at the airport waiting to check in. No time to return. So, improperly dressed and no phone. Gonna be one of those weeks!

Now, the marine industry is generally casual. My normal attire is a company shirt, dockers, and dress shoes, no tie necessary. In fact, outside of Japan, Korea, Taiwan, Germany, and banks in London or New York, I very rarely have to wear a suit at all, which is a good thing, because I TRULY HATE THE DAMN THINGS, especially ties. There is a special place in Hell reserved for the inventor of the tie. Now, before any women readers chime in and say that a suit and tie make us look handsome, I pose the following question: How many women enjoy wearing pantyhose? If there are, I’ve never met them. I think Rebecca owns a pair or two, but I’m really not sure since I’ve never seen her wearing them. Historically, the tie served no actual purpose other than to designate the rank of troops during the Thirty Years War.

OK… So I’m not fighting in an army, and I rank the same as everyone else, so why are they necessary? Purely decorative and useless. At least pantyhose keep a woman’s legs warm (I guess… though that is not much of an issue in the Philippines. They can be decorative. And Guys, if you ever want to tick off a woman, just ask her, “Is that a run in your stocking or is that just your leg?” If you survive the beating, you are truly a brave soul.)

So, I get to the show, too casually dressed, but no big deal. This show is mostly about appointments with existing customers, most of whom I’ve known for quite a while. They also usually know how much I travel and I get a little leeway. I also get what is known as the “American Pass”. Most Europeans know that Americans tend to generally be more casual, so they are not as picky in certain situations (like at the show.) So, quick explanation to my colleagues about the Diet Coke, and everything is rosy, understanding laughter all around.

So, what does all of this nonsensical ranting have to do with the Philippines? Well, for those, like me, who hate ties, you will probably never have to wear one in the Philippines. People are casual. It’s too hot for a suit, anyway. In fact, for 90% of my business meetings here, I can safely show up in jeans and a company shirt, and that will be acceptable. Now, I’m not suggesting walking around like a slob, and in certain situations, like in Government Offices, you will not be admitted wearing a wife beater, shorts, and flip flops, but you can show up dressed as “business casual” nearly everywhere except the most formal situations. Also, in formal situations, you pick up a ton of cultural points with Filipinos if you wear a traditional Barong Tagalog instead of a suit. This attire is native to the Philippines, and more suited to the climate anyway. In fact, throughout Southeast Asia, suits and ties are normally not required except in banking, finance, or legal industries. Even in places like Singapore. In fact, I didn’t even have to wear a tie at my wedding!

One final note about the show. On day two, while wearing my cleaned and pressed suit and tie, I was having lunch with a group of customers. These guys were very high government officials from Vietnam (Think 3 levels below Prime minister). We go into the restaurant and my customer says, “John, this is too formal. No need for the jacket and tie today!” and I’m back to business casual after all of that.

F&B Insider: Kitchen Design

F&B Insider is a special column that appears on occasion in the Small Business File. Each week the Small Business File addresses some interesting topic related to entrepreneurship or small business management in the Philippines. F&B Insider columns focus on issues of particular interest to those small business operators in the food and beverage and hospitality industries in the Philippines.

In this inaugural F&B Insider article we examine the importance of proper kitchen design and how it relates to overall customer satisfaction with the dining experience.

Last week I hosted 8 friends from Singapore who traveled here to the Philippines for a week of island hopping, snorkeling, and plain old fun in the sun, sand and surf. The trip was a success as we are able to share incredible memories and photos of beautiful beaches, amazing coral, and fine sandy beaches. But as enjoyable a trip it was, everywhere we dined we faced long wait-times when it came to getting our meals — be it breakfast, lunch, or dinner. It seemed as though the majority of the places we stayed had difficulty in getting orders out to our table in reasonable amounts of time.

Being in the food & beverage industry myself, the long-waits made me think about what the problems may be in these types of situations. Sometimes the problem is having too large of a selection on the menu, creating a logistical nightmare for kitchen staff. This problem is further compounded if there happens to be a shortage of staff in the kitchen on that particular day. But based on my observations, this was not really the issue at the places we visited on our trip.

In all but one case, the various menus at the different establishments we dined at were not overly complex. The problem seemed to be related to kitchen size and design in relation to the number of tables and chairs that made up the dining area. How did I come to this conclusion? Even though it took between 1 and 1.5 hours for our table of 8 to get served, most dishes, when finally served, arrived cold. Can you imagine how we all felt after a long day out on the boat, only wanting to come back to a nice, hot meal? Then, we would have to wait much longer than anyone would ever think possible, only to be served a plate of cold food.

What was happening was obvious — there were not enough burners available to handle tables with groups that were larger than perhaps 4 individuals. The meals were cooked one at a time until the entire order was complete. Those meals cooked first got cold as the subsequent meals were made. As a result, maybe 1 or 2 of our dishes were actually warm once delivered to the table. The kitchens were basically not set up to deal with the size of the dining area.

Now nobody is saying these establishments must immediately go out and buy a whole bunch of fancy kitchen equipment and appliances. The lesson for those small business owners, either already in or contemplating starting out in the food and beverage industry, is to make sure your kitchen can handle the needs of the dining space outside! In other words, if you have 10 tables and 40 chairs, you should probably have more than 2 burners for cooking. The number of burners/microwaves/refrigerators should be sufficient given the number of tables you have.

How do you plan for this? As a rule of thumb, try and determine how long it would take for you to get orders out to all your seats in 15 minutes or less. Any longer, and you’ll turn customers off. Turnover of seats is what helps you increase your sales volume, so if your kitchen is designed in such a way as to get orders out efficiently at your most peak hours, you can be sure you’ll generate more sales on a consistent basis.

Moreover, your food preparation area should be designed so that those responsible for cooking can easily reach different areas without having to take more than 5 steps in any direction. Refrigerators, wash areas, the stove/burners and preparation tables should all be easily accessible to your kitchen staff. Moreover, try not to place your kitchen between the dining area and the store room — inevitably, servers will rush through the kitchen to get to the storage area, and the excess traffic could cause problems during very peak periods. When you hear plates crashing in the kitchen, 9 times out of 10 it is because servers are getting in the way of kitchen staff.

I hope this inaugural issue and future issues of the F&B Insider will help aspiring restaurateurs and bar owners to plan accordingly for many of the challenges typical in the food & beverage industry. Until next time, Bon Appétit!

More and more expats and OFW’s are getting involved in small businesses that fall under the food & beverage industry umbrella. F&B Insider articles will focus on some of the key issues that can help small business owners gain an edge over other establishments in this very competitive industry.

Blind Trust

In the past I have written about the need to build up trust within a small business setting in the Philippines. Building up trust is critical to long term success and relationship building between your small business and your suppliers, customers, employees, and others who may have an interest in your venture. But building trust over time is very different from having blind trust in any person, idea or relationship. Blind trust needs to be avoided as much as possible in the context of small business development in the Philippines.

What exactly do I mean by blind trust? Well, put simply, it is placing too much risk in your own hands rather than aiming to spread any risks out over time or finding ways for the risks to be shared by others whom you or your business are dealing with. Granted, there will be times when every entrepreneur will be faced with having to take a leap of faith, but the smart entrepreneur aims to avoid this as much as possible. The risks associated with having blind faith are not the same as taking a carefully considered and calculated risk.

Perhaps the best way to illustrate this point is to offer a handful of examples of how many small business owners fall victim to the detrimental effects of blind trust.

Example One: Placing blind trust in suppliers.

Don’t assume that a supplier is offering you the best deal you can get. You’d be surprised to learn how suppliers often manipulate prices offered to buyers. Always make a point of reviewing your input prices from time-to-time and solicit price lists from competing firms. Sometimes, even if the other vendor does not offer exactly what you are after, it is enough leverage to see whether your current vendor can reduce his prices to you so as to keep your continued patronage. Don’t risk any erosion of your profits because you failed to realize your suppliers weren’t giving you the best deal you could receive.

Example two: Placing blind trust in sub-contractors.

There are some instances when it is wise to out-source some portions of your business that can be done better or cheaper than what you can accomplish ‘in-house’. The caveat though, is not revealing any trade secrets to the sub-contractor. How you assemble a finished product should never be known to any sub-contractor who is providing an input to your business. You’d be surprised to learn how eager competitors are to learn your trade secrets, and if they can learn them indirectly through a sub-contractor, they will certainly try to do so! Don’t risk your future business success by sharing how you do things, even with a third party that is not a direct competitor.

Example three: Placing blind trust in your own managers.

This is a tricky one. You need to build trust among your staff, and especially your managerial staff who will be relied upon to keep others productive and operations running smoothly. But placing blind trust in a new manager whom you have not developed ‘in-house’ is a recipe for disaster. Even seemingly honest people can turn out to be very dishonorable. Make sure you have a good record-keeping system in place before handing the reigns over to your managers so you can tell very quickly if there is a significant variance between past sales/revenues/profits and what happens as you move forward. This way you can know very quickly if something is not quite right, especially in the cash or inventory department. Don’t place blind trust in your staff. Always have other ways of checking performance and ways to monitor the health of your business even if you aren’t physically there all the time.

Example four: Placing blind trust in vendors for work not yet completed.

Paying a vendor the full amount in advance for work to be completed or supplies to be delivered is a big mistake. We all know it is, but you would be surprised in knowing how many entrepreneurs make the mistake of paying too much up front in an effort to speed up the time it takes to build up trust with suppliers or vendors. Don’t take on all the financial risk just to please a supplier. Cash on delivery is the norm, and payment according to a project completion schedule with agreed to milestones is also a common practice. Be smart. Don’t take on risk unnecessarily.

Example five: Placing blind trust in your own abilities or ideas.

This one may be the most important example of them all. Just about everyone is susceptible to overconfidence, and this is especially true of entrepreneurs who may have gotten off to a successful start with their small business. But having blind faith in your own ideas and abilities is perhaps the single biggest obstacle to continued or prolonged success. Past performance is not always indicative of future success. Always challenge yourself and any underlying assumptions you may make about your plans or new ideas. Solicit feedback from others whom you have a healthy respect for, especially if they are small business owners themselves. And don’t put blind faith in your own abilities. If someone else can do a better job at something than you can yourself, have them do it! You’ll be wasting resources otherwise, and worse, demonstrating to your staff that you really aren’t so adept at leading and managing effectively. Put your efforts into those tasks where you really do make a difference.

I hope the above examples provide some concrete examples as to how and why you should try to avoid placing blind trust in any person, idea, or relationship. Building trust is important, but avoid blind trust and you’ll avoid a lot of headaches.

PS        I would like to thank everyone for their comments on my last article. I was away on a vacation to Surigao and Siargao Island last week and was unable to post replies to a number of comments made. Rest assured, I’ll go over the few I missed and make sure I share my thoughts on your much appreciated comments.

Recession-proof?

For at least a year now, most, perhaps nearly all of the world has been mired in a deep recession.  People in most parts of the world are really suffering.  Jobs are being lost and new jobs are scarce.  People in many parts of the world, especially in the USA are losing their houses to foreclosure.  Times are lean.  Most people agree that the current world recession is the worst recession since the Great Depression in the 1930’s.

The Philippines, however, has yet to go into recession.  The Philippine economy is still continuing to grow.  The latest economic performance statistics for the Philippines become official last week and showed that the Philippines maintained economic growth during the 1st Quarter of 2009 - January through March 2009.  The growth indeed slowed from previous economic growth, but was still growth nonetheless.

Recession is defined as two consecutive quarters of the economy shrinking.  But, the Philippine economy has yet to shrink at all.  First Quarter statistics showed a growth rate of 0.4%.  The 4th Quarter of 2008 showed a Philippine economic growth rate of 2.9%, so the rate of growth did show dramatically.  However, at this point, the earliest that the Philippines could officially be said to be in recession would be at the end of the 3rd Quarter of 2009, and then only if the economy shrinks in the 2nd and 3rd Quarters.  Philippine Government economists were indeed surprised that the growth rate had gone as low as it did, and are now warning that the Philippines may go into recession.  Previously it was expected that the Philippine economic growth would slow, but it was unlikely that the Philippines would enter a recession.

The last time that the Philippines experienced economic decline was in the first quarter of 1998, following the 1997 Asian Financial Crisis that saw the Philippine Peso lose almost half of it’s value.

So, what is making the Philippine economy lose it’s resilience?  The biggest factor is exports.  Because so much of the world has gone into economic meltdown, they are needing to purchase fewer goods from the Philippines.  Because of this, exports declined by more than 18% in the first quarter, quite a huge loss.  Imagine, though, other sectors of the economy must have grown nicely during the first quarter, since the overall economy grew by 0.4% while a huge economic sector like exporting declined by nearly 1/5th.

Here in Davao, where I live, though, the economy seems to be still growing very nicely.  There is a boom in construction in Davao, stores are full of shoppers, the job market seems pretty resilient.  Things look bright here.  Currently, Sutherland, a US BPO company is renovating a huge building to open as their new call center in town.  At least one other new call center location recently completed construction in town, and I am aware of two other new call center locations that are either under construction or in the preliminary states before construction will start.  So, things look bright for the economy in Davao City.

So, is the Philippine Recession-proof?  Probably not, at least right now it is teetering on the edge of a recession.  However, it will, in my opinion be a mild recession if the Philippine economy actually does slip into recession.  I don’t expect that Davao itself would be in or near recession if local statistics were available.

We are starting to hear some sectors in other country saying that the worst has already been seen.  I personally don’t believe that to be the case, but I hope it is true.  If the rest of the world begins to emerge from recession soon, I believe that the Philippines can still avoid a recession.  If the exporters are able to reverse the declines, it would appear to me that the Philippine economy could post some very nice numbers soon.  It all depends, though, on the world economy.

These days, globalization affects us all.  Economies are inter-tied.  That’s why the Philippine economy has slipped to the brink of recession.  Maybe it can still be avoided, though.

Soap making!

A few weeks ago Teacher Bebe invited me to go with her and see how to make a soap. I am glad I went with her. The lady that demonstrated how to make the soap told us that the soap that we were making was to be given to the poor people here in Davao and the native people here too. She will also show them how to make the soap so that they will know and that it will be cheaper for them later. I will share with you guys below on how to make soap and ointment.

Honestly, here in the Philippines, a lot of the government organizations are now going to the poor barrios to show the women there how they can make a living even if they are a stay at home mom. My sister is really active in GenSan in attending  some kind of seminars that the government offices are giving and she then shares her knowledge from the seminars with the ladies in her neighborhood and at the Barangay Hall where they will have meetings every week.

My sister learned how to make powdered soap, liquid soap, bar soap (soap use here in the Philippines to wash clothes), lotion and glass cleaner. I am going to learn from her too. Their group of women in GenSan is already making powdered soap and selling it to people. It’s nice to learn and try to apply and share the knowledge to the people here at the house too.

The body soap that we made there in the group was herbal. Really, you can use any kind of soap mix that you like, such as herbal (guava, camias (eba), akapulko) and some others. Cook the leaves or roots first and use the liquid (juice extract) from it, oatmeal, cinnamon, perfume or cologne that you like. During our soap making the lady that demonstrated used AKAPULKO (we call it asunting here).

How to prepare the Herbal Soap:

Utensils needed:

• Plastic pail (bucket)
• Wooden ladle or bamboo stick
• Glass or cup
• Mortar and pestle
• Cheesecloth or strainer
• Knife
• Chopping board
• Cooking pot (when preparing the concoction)
• Plastic molders (size & shape you prefer)
• Gloves
• Mask

How to Prepare a Concoction:

1. Wash the leaves thoroughly and chop or cut into small pieces.
2. Measure 1 glass of chopped fresh leaves and 2 glass of water.
3. Let it boil for 15 minutes (start timing when the water starts to boil.)
4. After 15 minutes, remove from fire and strain in a cheesecloth. Set aside and let it cool.

Ingredients:

• 1 cup Caustic Soda
• 3 cups of Akapulko concoction or some other herbal that you want to use.
• 5 cups of cooking oil
• coloring powder ( optional)

Procedures:

• Prepare the materials and the utensils
• Measure 1 cup of caustic soda and the 3 cups of Akapulko concoction and pour into the bucket.
• Mix well by stirring continuously using the wooden ladle or bamboo stick. Just use one direction only when stirring. Stir until the caustic soda dissolved.
• Pour 5 cups of the cooking oil into the mixture. Just pour it slowly.
• Continue stirring until a consistency of a condensed milk is achieved.
• Pour the mixture into the plastic molders. Set aside and let it cool to harden.
• After 4-5 hours, remove the soap from the molders.
• Allow 30 days or more for the soap to age before packing.

Just a reminder. Using Caustic Soda can harm the skin after contact. Wash immediately with vinegar or anything sour and then rinse it with soap and water.

Soon I am thinking of making bar soap with oatmeal. A friend of mine gave us some oatmeal soap and we really like it a lot. And for the oil I will try the coconut oil it might be good for the skin. If any of you know some other ingredients that will work better please feel free to share it here. To all of you that wants to make the soap, HAVE FUN Guys!

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