August 14, 2019

How Does Internet Information Affect Our Decisions?

Focus Photography of Keyboard by Kacper Cybinski.


Studies would prove that our decisions could be influenced by internet information – there are rising number of influencers in social media (e.g. Youtube, Facebook, and Twitter). Information that we consider fact (or true) is the most influential when it comes to decision making. This topic is timely because, day to day we are making decisions, and day to day we are bombarded by information that could be factual or fake; important or insignificant. 

Information can be use to influence the decisions of people. That is, you could be making decisions based on influence of media (video, photo, article and etc.) that was engineered based on your data. If you are not familiar with data modelling (or should we call it also information modelling), it is the science of testing data; it is use to know which data affects one data. Questions like: 


“If you increase your advertisement (ads) in Facebook will your followers grow?” 

The data that will be use to answer this problem is: number of ads in Facebook and the number of followers. Then, the collected data will be analyze using statistical tools (apps). If statistical results are positive, then you can decide to continue to air the ads in Facebook since it has positive effect on the number of your followers. 


Knowledge of data can also be use in a bad way. For example, let say that data test shows that people tend to select strong leaders when number of violent news increase. During election, the said information could be used by a candidate by building strong-alpha male image and spreading violent news in the internet (and in television); usually they are in the form of articles, memes, photos, and videos. The people who are being targeted by the said information would be influenced that the world is full of violence even though there is no enough data or statistical evidence to prove the claim. As a result of media exposure, people could jump into conclusion that their country needs a strong-alpha male leader because the world is full of violence. 




In defense to the above example and realistically speaking, there are negative events in this world, but there are positive as well, thus, one cannot conclude or isolate that the world is negative alone (and one cannot also isolate that the world is positive alone). The point is that one person should not jump into conclusion based on few evidence.

There is a tendency for people to believe based on what they are seeing rather than in statistics – people might not distinguished the difference between “trending” and “pressing” issues (trending topics does not mean that they are the most pressing issues in a country). For example, do trending stories about celebrities more important than issues that relates to leading cause of death in a country? Would you be more concern about the social life of celebrities than information that would help extend your life expectancy? Would you be more concern about the trending beautiful faces of celebrities than the information that could help you regain your health, which could then result for you to have a healthier skin? 

Internet (and television) tends to feed us with information that we “like”. If we like violence and hate speech, then internet will make sure that we see more of this in our feeds every day. If you like celebrities, then your feeds will be full of celebrities. Internet feeds (social media) are designed to show us what we like, not what the world is really like.


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August 8, 2019

PH Economy Slows in Q2: Rate Cut versus Inflation

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City Buildings during Orange Sunset by Luis Enrique Carvajal.

Philippines Q2/2019 GDP growth registered at 5.5%, lower compared to previous year’s 6.2%. It was already seen that the delayed in government spending, due to delayed passage of P3.7 trillion 2019 budget, would have an effect on the said growth. Also, the Contractionary Monetary Policy (lowering of money supply) last year is seen to affect the growth number as well. The eagerness of the government to tame inflation, by increasing the interest rate, could have tamed the economic growth in effect; but on the positive note, inflation has significantly declined on average from 5.13% in 2018 to 3.40% in 2019. Now that the growth number seems out of projection, the central bank (BSP) might cut the interest rate, to boost the money supply, in order to stimulate the economy. But this could be a double edge sword scenario - unwarranted economic stimulation could push price up which is not good for the economy. 

I think it is very important for central bank to consider the price of basic goods before it acts on the rate cut, especially today that we are in midst of typhoon season, where supply of some agriculture products might decline – which could result for prices to go up. Increasing the money supply while the supplies of goods are declining could back fire on inflation.



If there is something to be monitored, I think that is the timeline of government projects from conceptualization to implementation stage. Good execution of Expansionary Fiscal Policy could boost the economic growth. 

It is noteworthy to mention as well, that it is vital for government to encourage investments in agriculture sector since it is the backbone of our economy; if we have abundant supply of agriculture products, there would be less pressure on prices when money supply is increased. In addition, increasing the supply of energy, by building renewable energy plants, would lower the cost of energy and would serve as a balancing agent in times of inflationary pressures.


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August 1, 2019

Functionality versus Having It All Mindset

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Vietnam Streets by Fabian Irsara.

Some theories in economics argue that having more things in life means greater fulfillment and happiness. The basic idea about acquiring more goods is that having more options is much better than have less options, or in other terms, having many choices is much better than having fewer choices. Which boils down to the question, does having more things (or goods) under your roof, better, even if you don’t make use of all this things. 

Economics is the study of allocation of resources, which means economist study how goods and services are put into good use. In the case that we are talking right now, we are trying to analyze whether acquiring lots of staff is better choice compared to owning goods based on function. When we talk about functionality, we mean to say that you are acquiring a product based on its use rather than its ornament, marketing, endorsement, brand, and price. Thus, the term function is synonymous to usefulness, quality, specification, standard, and features. For example, if you decide to buy a bicycle so that you can display it into your house, rather than use it, then you are not buying based on functionality. 

Buying based on functionality is rooted on the idea that you are buying a product to add functionality or productivity to your life so that you can achieve your greatest potential (so that you can do more things). In other words, if you buy a product (or service) based on its function, then the product should enhance your life. Going back to bicycle example, during the days without bicycle, you walk to your office from home for about 30 minutes, but after buying a bicycle, your travel time was cut to 15 minutes (as a result you have added 15 minutes to your coffee brake); this is a good example of buying a product that enhances functionality. You should note that this example is subjective, I only use the example to convey added functionality for some people, other people might prefer to walk than to use bicycle and in that sense buying a bicycle has no added function. 



You might ask, so what is the point of discussing functionality? I will answer this question with another question. Would you buy a product if it will not enhance your productivity? Would you buy a product if has no added benefit or use in your life? A Nobel laureate in economics, Amartya Sen (1998 Economics Nobel Prize Winner), argued that what matters is not the things that the person has – or the feeling these provide – but what a person is, or can be, and does or can do with the things he posses. Sen argued that what matters for well-being (human development) is not the characteristics of the product consumed, but what use the consumer can and does make of the product (source: Economic Development, Todaro and Smith). 

Here is another example, let say you want to buy a laptop for business use – for email, internet, Excel, Word, and PowerPoint use only. You bought a P50,000 (1,000 USD) laptop; in the office you have a business partner who owns a P30,000 (600 USD) laptop, at end of the day, both of you were able to accomplish your task, with the help of office applications (Word, Excel, PowerPoint), using your own respective laptop. The 50k laptop might have more processing capability than 30k laptop, but because you are only using basic application such as Microsoft Office, your laptop has more unused processing power, while your partner’s 30k laptop is fully utilizing the processing power it has. The bottom line is that, even if you bought a 50k laptop, you may not be better-off than your partner who uses 30k laptop. In the lens of functionality, the additional 20k you paid in your laptop (30k + 20k = 50k) should have produce additional productivity, but in this case, your 50k laptop produce same result as 30k laptop. 

Another good example of buying goods based on functionality is a person who has one car and another person who has two cars; at the end of the day, both of these guys will reach their destination using only one car at a time. And at the end of the day, both of these guys are better-off since both achieve their function (driving their car to reach their destination) even if the first guy has only one car. 

In this era of more choices, we have to rethink how we buy products and services; may we learn the difference between function and price. That is, not all pricey products are functional, and not all functional products are pricey.


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May 21, 2019

The Google-Huawei Case Study

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Accept it or not, technology is a big part of human life today. The big news shock the internet community when Google announced that it will be cutting its tie with Huawei. This means that Huawei will not be able to use the licensed Android Operating System (OS) unless Google lift the restriction; however, the company can still use the open source Android OS but this will limit the company from using the Google Play Store. According to internet data, 80% of the phones in the world are powered by Android; all Huawei smart phones are using Android. Looking at this basic data, we can see that the decision of Google to restrict Huawei from using Android will have significant negative impact on the company's business.

In response to Google restriction, Huawei might possibly create its own OS, but the success of that will depend on the support of application developers. Android's success has been largely attributed to its large pool of apps in the Google Play Store, if Huawei wants to create a successful OS, it would need to have a large pool of apps as well (and large pool of app developers who wants to contribute to its app store).



Nokia bought by Microsoft which was turned into Microsoft Lumia is powered by Microsoft's very own - Windows Phone OS. Windows Phone is very efficient, it is very good in managing phone memory and applications, but its app store lacks the number of apps and the support from app developers are very minimal; this eventually led to the decline of Microsoft phone users.

The case of Microsoft Lumia and Huawei has similar points, both of these companies produce good quality phone (hardware), but if Huawei would study the case of Microsoft phone it should be careful on its approach in creating a new Operating System (OS). On the other hand, if Huawei could proved that it's OS has a superb quality and has collection of apps that could match Google, then Huawei might be the next Apple. Huawei could be match better than Apple as the company has its own advance hardware technology and being situated in China gives the company access to lower labor cost resulting to low cost of phone production. 

Huawei was included by the US Commerce Department into "Entity List" which limits the access of the company from buying technology in US without government approval. Google responded to US government order by cutting ties with Huawei.


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February 14, 2019

Why the Market is Irrational

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I want to think about the reality of stock market, is stock market really the best place for investment?

Is stock market predictable? In my experience, stock market cannot be predicted, but you can use data and probabilities as basis whether to invest in a stock or not. Stock market is unpredictable in same sense that some news and events cannot be predicted. 

Is stock market the safest investment? I could tell you that you could lose half of your money in stock market and wait decades (in some cases) before you can recover it. So yes, stock market is not the safest investment on earth. Even the legend investor, Warren Buffett has a story of lost. In June 2018, Buffett’s holding company, Berkshire Hathaway, acquired 250 million shares of stock of Apple; by November 2, 2018, Buffett lost more than $3.5 billion of its value (source: Warren Buffett loses nearly $4 billion in single day on his Apple stake). 


One might think that I’m being too pessimist (negative), but that is not true, there are tales of triumph and gains only if you invest carefully. Take the case of banking industry in the Philippines. In January 11, 2019, news about Hanjin Philippines bankruptcy spread in the internet like a virus causing a downward shift in the stock price of banks with loan exposure to the said company. Metrobank (MBT) for example plunge from P82+ level to P76+ level after the news-scare, now as of this writing MBT is back to 82+ level (note: this is not a stock recommendation). If you examine the scenario, one might think that this is not good time to buy stocks since price might go down further, but if you examine the history, Philippine Banks have been in worse situation than this (Asian Financial Crisis is more worse) and yet they survive; thus in this case, a bankruptcy of one corporate institution will not result to bankruptcy of whole banking system of the Philippines. With that in mind, an intelligent investor has already gauge that declining stock price of banks is temporary and an opportunity to buy more stocks. 

The key here is that investors and traders should always recognize that investing in stock market has risk and that stock market is not a fairytale of gains and always gains.


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February 13, 2019

Google Station is Opening 50 Sites in the Philippines

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Google Station which offers free high quality Wi-Fi connection, will open 50 locations in the Philippines. In an article written in Inquirer, Mahesh Bhalerao, Global Director of Google’s Next Billion User Partnership said “Google Stations allows Filipinos from Luzon, Visayas, and Mindanao to connect with high quality internet. Google Stations will be developed in more than fifty locations by the end of this month.” Google Station is partnering with Smart to setup Wi-Fi hotspots in public areas such as airports, markets, malls, and bus stations.


List of some locations that will have free Wi-Fi via Google Station by the end of the month:

  • Light Rail Transit-2 (LRT-2)
  • Metro Rail Transit-3 (MRT-3)
  • Araneta Bus Port
  • Cebu South Bus Terminal
  • Clark International Airport
  • Davao International Airport
  • Batangas Port
  • Ateneo De Naga University
  • Bohol Island State University
  • Bukidnon State University
  • Colegio de San Juan de Letran Calamba
  • Columban College Inc.
  • Holy Cross of Davao College
  • Pamantasan ng Lungsod ng Maynila
  • Southern Luzon State University
  • University of Cebu-Main Campus
  • City Hall of Baguio
  • City Hall of Mandaluyong
  • Ali Mall
  • Gateway Mall

Google Station is already established in India, Mexico, Thailand, and Nigeria.



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Tech Companies are Hiring a Lot of Economists

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In an article published in Harvard Business Review (HBR) dated February 12, 2019, titled "Why Tech Companies Hire So Many Economists", Susan Athley and Michael Luca pointed out the importance of economics and the role of economist in tech business. In the article, they highlighted that large US tech companies like Amazon, Google, Facebook, and Microsoft have large team of PHD economists. 

So why are economists so valuable in these tech organizations? The growth of tech economists in the past years has help tech industry answer some of the most important issues in the market. Questions related to pricing, like, how will the market respond if we make the app free or what if we charge a little amount will they still download the app? Or what market should we focus, will tech products sell on this market or that market? With the data of tech companies and the toolkits of economists, questions like these would be readily answered. 



If you are an economics students, you would probably remember the times when you took your thesis and running series of statistical test to test relationships of variables. This experience on testing and studying relationships (accepting or rejecting the hypothesis whether there is significant relationship or not) is a valuable expertise in tech sector. When an economist is asked about a problem, he does not jump into conclusion and giving answers without basis, instead he uses data and economics statistical test to figure out possible answers to the problem. In simple words, economists know how to use numbers in answering complex real world problem.


HBR article link: Why Tech Companies Hire So Many Economists

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February 8, 2019

DPWH Opens the First Protected Bike Lane in the National Highway of the Philippines

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Laguna Lake Highway in Taguig City. DPWH File Photo.


Department of Public Works and Highways (DPWH) has opened a separate 5.58km bicycle lane facility along the stretch of Laguna Lake Highway in Taguig City (source: dpwh.gov.ph). This is the first national highway bike lane in the Philippines which has been in the dreams of most cyclists in this country. This type of development will provide access to safe mobility for the masses who are using bicycle as mode of transportation. Hopefully more of this will be built in the roads and highways of the Philippines. This will allow people to be more mobile which can enhance their well being and can contribute to the economic growth of the country.

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January 29, 2019

What Lies Ahead: The Philippines Economy in 2019

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Last year was full of economic challenge for our country. Inflation was in all time high and Central Bank (Banko Sentral ng Pilipinas [BSP]) flexing its muscle by raising the interest rate. The trade war between China and U.S. and economic uncertainties in the Middle East contributed to lowered strength of Philippine currency. Stock market saw and felt the economic challenges of the country, last year was a market bear for Philippines stocks. 

Although 2018 was full of economic difficulties, to the point that World Bank is warning that the country is overheating, there is still light at the back of the story. Quarterly growth remain strong at 6% plus level, a sign that the economy is still performing well. While inflation is on upward trend, it turns to slow down as the year ends, signaling that efforts to curb inflation are working. End of the year holidays also saw remittance coming, leading to strengthening of Peso against Dollar from PHP55 to PHP52 level. With all the latter being said, we have an idea that 2019 has a good start for the economy; but, what will 2019 bring to the country and what lies ahead?



Inflation topic is up again in 2019 as TRAIN 2 is already in effect resulting for some to conclude that the implementation will result to upward spiraling of the overall price of goods. Yet, experts are arguing that additional tax on oil will have little effect on the overall price, since oil price in the world market has started to go down. Thus, the additional tax on oil will be compensated by declining oil price in the world market. Furthermore, price of oil domestically should start to see some down trend since Peso (PHP) currency has already gained strength in the past few days which would result to lower import cost compared last year. 

Retail and construction supplies is seeing boom this year as government pushes more Build. Build. Build projects out of the pipeline. Last year, government building projects paid construction salary of about P17 Billion from January to July 2018 and spent P281 Billion on infrastructure projects from January to May 2018 (according to Sec. Dominguez III). It is expected that more construction jobs will be in demand this year as more projects progress from conceptualization to building stage. 

E-commerce is also gaining ground in the country as cheap items from China flood the Philippines online stores. The low cost of selling goods in the internet is creating income nationwide, and this is a good sign that internet economy has a good future in the Philippines. According to Google, Philippines internet economy will grow from 5 Billion Dollars in 2018 to 21 Billion Dollars in 2025. The growth in e-commerce is also seen to contribute growth in logistics business.

Tourism industry should take a further leap this year as Boracay recently opens after being closed for rehabilitation. Since 2011, tourism income share on economy has significantly increased from 5.9% to 12.2% in 2017 (source: PSA). construction road works connecting urban areas to rural areas would further strengthen the growth of tourism in the country, last year from January to October 2018, 5.9 million international tourist arrival were recorded by Department of Tourism, 7.4% higher compare same period in 2017; with majority of the visitors coming from Korea, China, USA, and Japan.

Philippines stocks showed signs of recovery, even though the Hanjin Bankruptcy temporarily halted the upward momentum of Philippine Stock Exchange Index (PSEi), the trend is still very clear that the country’s stocks are on the rise. Central Bank also hinted that it will no longer increase interest rate in the next few months, which is a sign that the mother of all banks is seeing that inflation is already stabilizing. 

While it is good to be optimistic, it is still important to identify the problems and trends that might cause economic growth to reverse. There is a hot debate about the effect of Federalism in the overall economy. Whether the shift in this particular type of government will bring prosperity or it will cause political chaos. Yet, in this early stage of development of Federal System, the public will still not be able to gauge the real effect of the proposed change. The Federal Constitution draft is not yet available for public scrutiny, and if available, only lawyers and experts will understand the writings. So it is very important that the changes in the constitution be explained in the public in layman's term. 

On the other side, the war on drug is for sure to continue this year and it looks like that the fight will not end so soon. This might imply that there might be other reason why people are seeking illegal drugs, it might be more than addiction. The reason might be psychological or economical, it might be rooted to family problem or financial problem. Whatever the reason, the root cause must be addressed through implementation of right government policies and projects from the government, non-government, and private organizations.

Even though Libya has resumed its oil production last year, which pushed the oil supply up and caused some downward shift in the price, oil supply is still seen as volatile. Economic uncertainties in the Middle East triggered by war and violence could negatively affect the supply of oil, and thus, might push the price upward. While the shift in renewable energy and the promotion of electric vehicle might put some pressure on oil as consumers shift their demand from oil to electric energy which will result for oil price to go down. Oil is vital part of all economic activity, a major increase in the price of oil might result to increased in transportation cost and could affect the price of basic goods.

There is much to tell about the factors that might affect the growth of the Philippines, but without diving into more details (because this might be too much), Philippine Economist projects that Gross Domestic Product (measurement of economic growth) will be in high levels at 6.67% in 2019. (source: https://www.phileconomist.com/p/philippines-gross-domestic-product-gdp.html

Hopefully, government policies and projects will further strengthen the economic development of the nation; with further hope that inclusive growth will always be at the center of decision making of the leaders of this country. 


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December 4, 2018

Traveling the World in Your Home

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Viewing Tokyo using Google Street View


While most of the travel enthusiasts will agree that traveling physically from one place to another; from one country to another country; is the holy grail of traveling, there is another way in which a person can observe a country without living his home. This method is much cheaper and much efficient compared to physical traveling. 

In the height of technology, Google introduced Street View where-in you can view different streets, cities, and towns of the world in three dimensional using your phone. With this technology, you can observe different cities, understand their infrastructure without physically visiting the city. This is an equivalent of travelling but much cheaper and efficient. With Google Street View, you can roam around the cities of London, New York, Seoul, Tokyo, in less than one hour without spending a dime.





So how can you use Google Street View to view different cities around the world? 


1. Download Google Maps in Android Play Store; if you have already the app in your phone, make sure that it is updated.






2. Click the app and search the city you want to visit; in below example I have searched for Tokyo, Japan.






3. Use your finger to pin the location that you want to visit; in below example I have pin the location at the center of Tokyo.






4. Click the picture (with 360 degree logo) in the lower left portion of the app.






5. Upon clicking the photo, a three dimensional photo will appear. You can now roam the streets of the location you have pinned (in this example Tokyo, Japan) and observe their infrastructure using the arrows on the screen.







In the past, people have no way to see different places, but only by visiting them physically. Now with the breakthrough in technology, we can now study and understand different places at very low cost, but much efficient than physically walking all day long in the streets. This break through in travelling places virtually will help us understand the differences in the city infrastructure and design; which will help us understand which practices and design can be adopted for improvement of our own cities and towns. 


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