Farewell Jon
I'm still on blog leave, but I'm offering a warm blog entry and my prayers for a Bedahigh batchmate.
I'm glad to have known Lino during my Bedahigh days, even if we weren't really close. He was one of the really nice guys from "4-42 St. Peter the Venerable" back then. Despite being a star player in the Red Cubs, he had no air. He was really humble. During the NCAA Junior Basketball Finals, I was heartbroken when I saw Jonjon cry in the hardcourt because we lost to the Letran Squires for a single point via buzzerbeater.
Jonjon's ECHOES 2002 write-up said of him:
The Cubs' Mr. MVP. He's quite, but he let his game do the talking. An all-star caliber player on the court and also a superstar friend, but he doesn't let these things go into his head. A humble person with a very youthful heart, that's Jon.Bedahigh Batch 2002 has always been and will remain proud of Lino. On a personal note, I have always felt that he deserved a whole lot more. May he rest in peace. I will learn from the way you battled in the hardcourt, and in life's struggles.
For now, I would like to share a brief chronicle of Lino's post-High School life courtesy of
Tessa Jazmines in BusinessMirror.
Part Of The Game: Jonjon, the Star Written by Tessa Jazmines(tjazmines@yahoo.com) He had a David Archuleta kind of charm. A little-boy-lost look that mothers everywhere found irresistible.
His hair grew, no, sprouted, from his head in eager strands, giving him the appearance of an elementary-school kid all gelled up for the first day of school. Height-wise, he didn’t seem much. Five-foot-seven for basketball is way below the mark.
In fact, if you didn’t know his name and only judged him from his appearance, you would probably think he was a choir boy, or an altar boy. Or a high-school kid come to visit an older brother or sister in the vast, yawning campus of UP Diliman.
But Lino Tabique Jr.—nicknamed Jonjon—was much more kinetic and way far deadlier than his harmless looks. He was a basketball player. Not just any basketball player, but one good enough to have run the Most Valuable Player race in the National Collegiate Athletic Association juniors and almost clinched it. He may have lost out to taller, more muscular Letranite JayR Reyes that year (2001) in a truly close contest. But no one would forget Jonjon Tabique’s name ever again.
He was small, but that’s what made him all the more outstanding. He was a monster on court—what contemporary basketball watchers would call “halimaw maglaro.” He was sharp and quick and had an incredible knack for spotting the open man. His drop shots were legend—as he forayed into the paint, drawing all defenders to him like flies, then letting the ball fall casually into the waiting hands of a taller basketeer who could reach heaven—the basketball rim—without fear of molestation.
He had booming three-point outputs, too, which he would uncork casually as if he were simply playing hoops in play zones in the mall. Oftentimes his brave, I’ll-take-charge decisions changed the complexions of ballgames. Both as a junior at San Beda College and as a Fighting Maroon in the national university, he was gritty and tough. Like your youngest kid brother playing the role of hero when the bad guys had his older brothers tied up.
Consider: Maroons soar past Eagles, 53-49. UP pulled a big surprise at the 65th University Athletic Association of the Philippines (UAAP) basketball tournament when the Fighting Maroons downed second-seed Blue Eagles, 53-49, July 28, 2002, at the Makati Coliseum. UP’s triumph broke Ateneo’s winning streak, leaving La Salle as the only unbeaten team in the tournament.
Rookie point guard Lino Tabique Jr. rallied the Maroons to victory with a stunning second-half performance. Tabique netted 10 points, including eight in a third-quarter run that started it all for the Maroons. Vito Arnaiz and Michael Bravo also scored 10 points each. (http://newsletter.up.edu.ph/previous/archived.htm).
Jonjon was UP’s Little Big Man who lifted up the often sagging spirits of the UP community in those new millennium days. Many times he looked like he was the real MVP, so dazzling was he in his court exploits.
Two thousand and two, in fact, was a really great year for UP in terms of recruitment. Both JayR Reyes and Jonjon Tabique—the 1-2 punch of the UAAP juniors—had been taken into UP by coaches Allan and Ryan Gregorio, who were then at the helm of the State U’s coaching staff. Though they were rivals in high school, JayR and Jonjon ended up the best of friends in UP. UP coeds sighed and were curl-your-toes thrilled at the sight of the two of them walking to or from their classes at Palma Hall. A true Mutt-and-Jeff tandem—six-foot-seven JayR and five-foot-seven Jonjon—were a sight to see. What an aura they exuded.
In 2004 the UP team was picked up by Welcoat and many of its key players suited up for its Philippine Basketball League team. JayR and Jonjon were two of them, alongside Jaireh Ibañez and Nestor David. It seemed as if Jonjon’s hoop dreams were all going to come true.
And then it happened. Jon began to get fevers on and off in 2004. Then he started to get lumps around his neck that felt like jelly marbles when you touched them. He continued to play—perhaps afraid to stop for fear of finding out the truth. But eventually, it had to be done. A checkup was in order. And when the results finally came out, everybody’s worst fears were confirmed.
Jonjon had cancer—the virulent type called stage 3 non-Hodgkins lymphoma, a form of cancer affecting the lymphatic system. It progressed rapidly, at one point already affecting his liver.
The San Beda and UP communities and all friends in sports world came together quickly to come to Jonjon’s aid. Benefit games were played by Purefoods and Red Bull at the San Beda Gym as a gesture of support by UP coaches Ryan Gregorio and Yen Guiao. Another benefit game followed at Loyola Gym between the then current Maroons and the 1986 UP men’s basketball team which gave UP its only postwar UAAP title.
Jonjon attended, wearing a baseball cap that covered his shaven head—an initiative he took to preempt the sad eventuality of him losing his hair to chemo. He vowed to fight, and to come back and play.
And guess what, he did! Personal faith, prayers of family, friends, loving coaches (like Ato Badolato) and all kinds of support carried Jonjon through months of sacrifice and hardship. In due time he was again cancer-free.
Jon’s hair and healthy color came back. He started to work for his family’s medical supplies business. He went back to school and played basketball again, though not in the same manner or intensity. He had fun times with his family—wife Diane and daughter Andrei—and the whole clan. For a time it looked as if he was home free. And then it happened again.
In late October he sent me this message: “’Yung cancer ko po bumalik, sobrang sad po.” By November 12, he was gone.
I went to Jonjon’s ancestral home in Aliaga, Nueva Ecija, to pay my respects to this great, brave kid. I will always remember him for his game—both on the court, and in the greater playing arena of Life.
Shine on, Jonjon. Be our special star.
Labels: farewell, ncaa, san beda
PSEi down by 12.27%
Courtesy: Yahoo! Finance
Indeed, the PSEi posted its biggest one-day point drop since February 2007, falling by
12.27% to 1,713.83. It even triggered a halt in yesterday's trading, which apparently was a result of a certain new ruling should the index drop by 10% or more. Fundamentally speaking, I can't really attribute anything that would pull prices in a really bothersome manner. It can probably be because of US uncertainties, the drop in US equities that was mirrored by several indices in the region, can even be the BDO's drop in earnings brought about by the effect of Lehman Brothers as well as the drop in the investment securities of the bank. So I guess the traders were right in saying that the investors got irrational and unreasonably scared? What a good time to be absent from work, haha.
Source: BusinessWorld
On a funnier note, it was really weird that San Miguel bought the GSIS stake in Meralco for Php90 per share. As Francisco Liboro puts it, Meralco is good company fundamentally speaking, but it's quite peculiar for SMC to buy Meralco at double its price given the current market conditions, foreign exchange, and regulatory risk that the company is facing.
Labels: economy, finance, recession
Artificial cure: from AFS to HTM
Newsclip above courtesy of BusinessMirrorI have not even had the chance to analyze further the pressing issues in the Philippine banking system, and yet, this news came out as an unpleasant surprise. All of these developments have been stressful, though I wasn't really surprised with the BSP's decision. It is really part of the central bank's mandate to restore confidence in the economy and the financial markets.
In my opinion that is based on my limited knowledge on the matter, the new move remains to be a plain accounting exercise. Assuming that a certain domestic bank applies for the new reclassification, any analyst's instinct should still be to adjust the July 1 carrying value of the reclassified held-to-maturity investments based on the market prices of these investment securities. As long as the "price per hundred" of the fixed income securities and the "price per share of equities" remain available, then this proposal will not completely change or improve the true picture of the banks. Ergo, the question of the banks' ability to service a possible major deposit-taking scenario remains.
So much for transparency. Though I'm guessing that the banks, and BSP for that matter, will not really entertain complete suspension of the mark-to-market measure because of the possibility of reversal of misfortunes in the bond and equities markets. In short, every single opportunity for gains might not be reflected in the financial statements if the MTM rule will be completely suspended.
Next attraction: Will the BSP allow the proposed "average CDS spread" to be the new measurement of the true value of ROP bonds? Will the Php1 million maximum deposit insurance push through? Is this the time to change the reserve requirement ratio?
I'm starting to lose confidence in the theories that were taught in the finance textbooks. The textbooks say that the "mark-to-market" convention is a measure of transparency and prudence of the company and its management, and probably, the intrinsic value of any company's assets or investments. Haha. To make it even worse, textbooks on bonds and fixed-income securities say that structured securities such as collateralized mortgage obligations have minimum counterparty risks because the mortgage obligations are pooled all together, creating the rare possibility that majority or a significant number of debtor-homeowners will default, only to find out that these homeowners themselves started the subprime crisis.
The world of finance, particularly the field of investment banking, will really change. I dunno about the theories taught in textbooks. If there's any consolation with all these, it's the fact that I understand better what used to be jargons in the textbooks, and that I'm witnessing a very critical part of history, as everything unfold in front of our eyes.
Labels: banking, economic slowdown, finance, recession
More bad news for the Philippine banking system
Banks seeking reprieve from losses on gov’t debt
Top-tier Philippine banks have asked regulators for a reprieve from marking hard-to-value assets down to fire sale prices as the industry grapples with persistent market volatility and a global credit crunch.
The proposal follows similar moves in the US and Europe , where authorities have relaxed fair value accounting rules to contain the fallout from the global financial crisis.
At least nine banks — Banco de Oro Unibank, Inc. (BDO), Rizal Commercial Banking Corp. (RCBC), Bank of the Philippine Islands (BPI), Land Bank of the Philippines, Development Bank of the Philippines, Metropolitan Bank & Trust Co. (Metrobank), United Coconut Planters Bank (UCPB), and Lucio Tan-controlled Philippine National Bank and Allied Banking Corp. — have launched a concerted bid to soften the blow from losses on ROPs — the market shorthand for Republic of the Philippine bonds or sovereign papers, industry officials told BusinessWorld.
The Philippine banking system is relatively healthy compared with its US and European counterparts as its exposure to risky credit assets such as collateralized debt obligations have been kept to a minimum.
Industry officials, however, pointed out that Philippine sovereign bonds have taken a hit from the global credit crisis. They said easier accounting rules would be needed to mitigate the impact on banks’ balance sheets.
The ROPs are booked according to fair value, or mark-to-market, which refers to an obligation on financial institutions to price assets held in their trading books according to current market values. Prices of these dollar-denominated debt papers have sunk, pressuring banks to top up their basic capital in a strained credit market.
"The quotation price has been ridiculously low and the bid and offer differential wide. The ones making the bids are really very few and it’s doubtful whether these are true buyers or [those] just trying to find out whether there’s a fire sale," Landbank Treasurer Reevie Vergara said in an interview.
"It’ not fair to reflect [in the books] the ROPs at fire sale prices. There’s a dearth of logical buyers so you have to really explore a way to temporarily reflect a realistic value."
Local banks are proposing a formula that allows the ROPs to be priced based on a certain credit default swap (CDS) spread instead of bid-offer prices.
Philippine five-year CDS — insurance-like contracts that protect against defaults and restructuring — widened to as much as 415 basis points last week on mounting recession fears that had investors dumping emerging market assets. That CDS spread was wider than the 250 basis points seen following the collapse of US investment bank Lehman Brothers last month.
Based on a formula being drawn up by the domestic banking industry that takes into account the performance of Philippine sovereign bonds from 1983, the CDS spread should be narrower at a 220-270 basis-point range.
"If we are allowed to temporarily use that more realistic spread, then the marking to market will not be that alarming," Mr. Vergara said. "We’re not against marking to market. There should just be a provision in the rules as to what valuation procedures we can turn to if it’s a crisis situation or during abnormal market situations."
Industry officials began talks last week with the Bangko Sentral ng Pilipinas (BSP), which was said to have asked banks to submit their observations. BSP officials were not immediately available for comment.
The move comes in time for third-quarter results, raising talk that the banks want to hide their losses. ------------
This news about the banks' appeal to change the accounting measurement of the sovereign bonds is on top of the other news, including the following:
- proposal to reduce the reserve requirement ratio - it is said for every 1% reduction in the reserve requirement, the banks will be able to add at least Php30 billion for lending
- President Arroyo's bid to increase the maximum insurance coverage protection for depositors -though there's no certainty as to how the government will put up the much needed equity
- the drop in the prices of government securities and quoted equities - it's not the ROPs alone that are dropping
- the uncertain impact of the structured product - according to BSP, it's 2% of the total Php5 trillion assets in the Philippine banking system. But, without knowing the real breakdown of the structured products, we do not really know how much burden the banks will shoulder from the notional amounts, plus the counterparty risks
- quite a number of banks have implicitly made efforts to stop if not significantly reduce "balance sheet lending"
- and above everything, the world is facing the challenges of a "recession".
Sovereign bonds have dropped around 25% on a year-to-date measure, while the Stock Market if I'm not mistaken has dropped by around 42% YTD. It's hard to measure or quantify the drop in the government securities across all maturities because it's difficult to do it unless one will do an extensive bond valuation or computation of duration. However, basing on the drop of 5-year benchmark, GS have dropped by 26%.
I have not really studied everything thoroughly due to the ever changing demands in my job, but in my opinion, the move to change the mark-to-market measurement of ROPS through the average credit default swap spread since 1983 is simply an accounting exercise. It's like a man who is starting to lose hair who chose to buy a wig as a solution instead of facing the threat of baldness and finding a cure for it. It will just change the artificial picture of how the banks are performing, but it will not address or prove anything about their ability to address possible future deposit-taking. Though I guess we should not be surprised if BSP chooses to do what will make the market calm. But as a boss of mine pointed out, I think what will matter is the auditor's viewpoint. In my previous analysis of a local bank which experienced a quasi-reorganization three years ago, I found out that BSP allowed the bank to stagger the effect of its loss on sale of Nonperforming Assets, even if the auditor of the bank gave a qualified opinion on the matter. Bottomline, I will not be surprised if BSP will consider the appeal of the banks, but it doesn't really mean anything. In fact, it defeats the purpose of transparency, which was the goal of mark-to-market valuation.
As for the move to reduce the reserve requirement, the only question is how sure are we that the supposed to be amount that the banks can lend will actually go to lending? In fact, it might not even go to investments that are currently dropping in terms of market value. They just might remain parked in other vehicles like the Special Deposit Accounts.
It is a tough ride for the Philippine Banking system, but that's the way things should be I guess. Why did I choose to be in Finance? Haha.
Labels: banking, economic slowdown, finance, recession
