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Analysts expect a blue-chip bargain in Philippine National Bank's plummeting stock price, even as many investors are avoiding the bank's shares. The ratio of the bank's operating profit to its stock price is not entirely negative, as its stock is selling at about 20 times its per-share income in 1994. However, no immediate significant improvement is seen in the bank's share price.

Dallas, TX-based Texas Instruments Inc. (TI) exported in 1993 about $0.5 billion worth of chips and other electronics components to Asia, Europe and the US. With an increase of almost 30% in sales, TI has become the Phiilippines biggest exporter. TI's success is attributed to its skilled operators in the firm's semiconductor-manufacturing facilities in Baguio, where 50% of the workers are college graduates.

The Philippines has solved its power crisis by opening the electric power generation business to private companies. These firms, which worked under build-operate-transfer contracts, provided 80% of the additional 855 megawatts of electricity supplied to the Luzon island in 1993. However, long-term problems still remain as the country may face another wave of power shortages caused by the breakdown of aging, overworked plants and the increased demand for electricity as the economy rebounds.

Members of the Philippine Congress have reached an agreement allowing foreign banks to enter the banking industry and a draft of the compromise is expected to be passed into law. The draft allows the top 150 banks in the world to open branches in the country within a period of five years from approval. Each will be allowed to open six branches, three of them in areas assigned by the Philippine Monetary Board.

The Philippine banking industry is willing to allow foreign banks to enter the market but is unsure with the framework in which to do it. The differences between Senate and House versions of the pending bill will have to be reconciled. For example, the Senate allows only six to eight banks to enter the market and requires a capital outlay of at least 300 million pesos or $10.9 million. On the other hand, the House sets no limits on the number of banks and requires a capital of only 125 million pesos. Foreign banks argue that capital conversion to pesos will increase exchange-rate risks.

The Philippine government has decided to allow telephone companies entrance into a telecommunications market previously dominated by the Philippine Long Distance Telephone Co. Although the plan is viewed by many as a welcome respite from years of waiting for new lines, analysts fear excess capacity and numerous regulations. Forecasts also include a wave of mergers and takeovers where only companies with large investment funds will survive.

Philippine food and beverage manufacturer RFM Corp. has sustained a 40% drop in net profit for 1993 to about $6.6 million. The company has attributed the decline to the power crisis that afflicted the country in 1993. RFM CEO Jose Concepcion III, however, remains optimistic that net profits will reach at least 350 million pesos in 1994 because of better power supply and economic growth. Sales during the 1st qtr. 1994 are 25-30% higher than the previous year.

The conflict surrounding the management of Philippine Airline's (PAL) stocks continue to cause the airline's downfall. Major stockholders of the airline are resting their hopes for a new management team that will pull PAL out of the mess. PR Holdings bought the airline's 80% share in 1992 while the government maintains a 20% share. The problems arose when PAL management started purchasing new aircraft units. Major controller Lucio Tan has expressed his willingness to sell the airline to any interested party.

Philippine Pres Fidel V. Ramos ordered the suspension of an oil price hike until the end of Feb 1994 in response to public protests. The one peso/liter levy would have caused an increase of up to 28% in oil products prices and was intended to raise $10 billion to help cover the government's budget deficit. A 10-member committee was appointed to look into revenue-raising alternatives. These alternatives may include shifting the tax burden on high-income groups and privatization of state enterprises. Ramos believes that infrastructure spending should not be squeezed.

President of the Government of Singapore Investment Corporation Private Ltd. (GIC) Lee Kuan Yew, plans to open the books of the $100 billion company in order to attract top global talent to its ranks. The professional invesment staff at GIC currently numbers 221.

Indonesian President BJ Habibie reports he greatly wants Indonesian Chinese who have opted to stay out of Indonesia since the May 1998 outbursts to come back, describing himself as their partner. Habibie also claimed that he can help the country have a transparent, democratic approach, in place of the existing authoritarian rule.

A survey has revealed that Asian family-run businesses have increased their demand for top executives. The survey was conducted by Korn-Ferry International which says that the Executive Demand Index, a measure of executives at the $100,000 per year salary grade, has risen to 32% in the second quarter of 1997. The report also states that the trend is spurring a shift in demand for business executives by region.

Cellular telephone equipment and services industries continue to score poor performance ratings with support services for customers. Companies continue to falter in providing support services and this is translating to an increase in frustrated customers. Factors like unit performance, services and rates should be provided by the companies so that customers are well informed on the service and units they are acquiring.

Manager Media International Ltd, a Thai publishing company, is holding back its plans of converting its monthly business magazine Asia Inc into a weekly publication. The move was unexpected since Manager Media has just hired a senior editor and six new journalists to prepare for the conversion. Manager Media officials admitted to some financial problems but said they were not a factor in the decision.

Vietnamese Prime Minister Vo Van Kiet believes that the seemingly slow pace of economic progress is well-suited to his country's unique conditions. Despite a series of floods and typhoons, Kiet is assured of Vietnam's economic recovery. He also stressed the importance of political stability in the country's quest for industrialization and international competitiveness. Kiet further assured the continuity of economic reforms and the need to curb corruption and to restructure the legal system.

The Vietnamese government's excessive intervention in the rice industry is inhibiting its growth and penalizing the country's rice growers. While the stated objective of Hanoi's complex mechanisms and inconstant agricultural policies is to protect farmers from uncertain market conditions and ensure a stable food supply, they are actually undermining international confidence in trading Vietnamese rice, thus driving down prices. Without trade restrictions on this crop, Vietnam's 1996 GDP could increase by $800 million.

A UN report says that Vietnam's existing incentives, regulations and systems for resource allocation are hindering the development of the country's economic growth. The report also says that Vietnam's economic policies may divert investments into the wrong sectors which could result in a heavier debt burden. The report urges Vietnam to focus on developing a competitive export industry to sustain its high rates of growth.

Vietnam's banking system has become more transparent as the nation starts to adopt reforms to inspire confidence in local banks. The Vietnam Bank for Agriculture was the first state-owned institution to be independently audited. Another state commercial bank, the Industrial & Commercial Bank of Vietnam, will perform its second independent audit. Other efforts at boosting public confidence in the system include stricter oversight of joint-stock banks, detailing of rules for recognizing bad debts and disclosure of the results of independent audits.

The Vietnamese Foreign Ministry refused to extend Far Eastern Economic Review correspondent Adam Schwarz' visa. The ministry, which reported that periodicals such as the Review have not been fair in covering issues concerning Vietnam, stress that foreign journalists should contribute to the development of the country and abide by its laws. The Review has been under constant attack from the government and has once been ordered by Vietnam officials to recall issues with offending articles.

Vietnamese Prime Minister Vo Van Kiet capitalized on the opening session of the country's legislature to decry Vietnam's inefficient and corrupt legal system. Kiet noted that the legal system's inadequacies and its poor tax collection mechanisms have contributed to the Vietnam's economic difficulties. He urged the legislature to adopt reforms to enhance the legal system and social security framework.

The Singapore Superbowl shopping and entertainment complex formally opened on Sep. 1996, in Ho Chi Minh City, Vietnam. The $13.3 million facility features over 4,000 sq.m. of retail space, fast food outlets, a 32-lane bowling center, disco, pool hall and video arcade. The complex, which has been in operation since June 1996, is reaping $30,000 monthly revenues and expects an additional 1.1 billion dong monthly from store leases.

The state-owned Saigon Post and Telecommunications Joint-Stock Corp. will capitalize on government favors and its privileged status to acquire telecommunications and postal services licences. The Vietnamese company, which only has less than $5 million in capital, also expects easier access to credit and land and other perks. Critics, however, stress that such a system promotes inefficiency and unfair competition.

The Communist Party of Vietnam again named Do Muoi, Le Duc Anh and Vo Van Viet as general secretary, president and prime minister, respectively, at the party's 1996 Congress. The party also announced the expansion of Politburo membership to 19 members. Party officials stated that Vietnam will push through on its course of economic reform but there were indications that the party will step up its control over the economy to maintain stability.

VID Public Bank has established a broad customer base in Vietnam by means of local knowledge and low overhead costs. Despite uncertainty in the banking industry, the bank gained a pretax profit of $2.6 million in 1995. Its low fees, cheap rent and low staff costs enable it to serve both foreign firms and small local businesses. The bank is a joint venture between Malaysia's Public Bank Bhd. and the Bank for Investment and Development of Vietnam.

The remnants of Vietnam's military past are showcased in the numerous war museums that can be found across the country. While many of them exhibit nothing more than a hodgepodge of antiquated tanks, aircraft and other relics, some offer interesting insights into Vietnam's rich military history. These include Hanoi's Army Museum, the Military Museum in Danang, and the war museum in the city of Hue in central Vietnam.

Vietnam is encouraging foreign investors to put up projects in rural areas to enable the rural population to enjoy the benefits of economic growth. The government is already insisting that future projects, including the country's first oil refinery, be built in rural areas. The policy was prompted by the country's uneven economic growth, which has seen urban residents enjoying higher incomes than their rural counterparts.

A growing number of South Korean companies are investing in Vietnam, attracted by its potentially vast, untapped consumer market and its large pool of cheap labor. Unlike other foreign investors who are trying out Vietnam with small projects, the South Koreans are much more aggressive, pouring in huge amounts of money in big, high-risk deals. The South Koreans have found out that doing business in Vietnam is not without problems but they remain optimistic about the Vietnamese economy's long term prospects.

The World Bank has announced that it will provide Vietnam with some $1.5 billion in soft loans through 1999. It is also providing Vietnam with several suggestions on how to promote the country's economic development. The World Bank believes that Vietnamese economic policy should put more emphasis on the private sector instead of focusing on state-owned corporations.

Vietnamese Deputy Prime Minister Phan Van Khai emphasized the need to control the country's budget deficit during opening of the National Assembly. Khai noted that Vietnam needs to improve its fiscal management to ensure funds to finance valuable infrastructure development projects. One of the main reasons for Vietnam's weak revenue performance has been tax evasion. Some sectors are considering reforms in the revenue-sharing to allow local governments to retain most of their revenues.

Vietnam needs to modernize its infrastructure but lacks the funds needed to do so. Moreover, private sector funding for such badly needed modernization projects seems absent and will not develop for some period of time. A clear example of Vietnam's infrastructure problem is the Saigon Port. The Asian Development Bank intends to should most of the costs of upgrading the centuries-old port facility. It states that private entities are wary about Vietnam's complicated legal environment and the absence of adequate loans.

The Vietnamese government has announced plans to expand the capacity of its Dung Quat oil refinery project even as its foreign partners iron out the details of a feasibility study. Government officials have also floated the idea of building a second refinery. However, industry executives doubt whether the first refinery is necessary in view of the available capacity in the region.

Vietnam's National Economics University has started offering a new M.B.A. course, the first such program in the country. Established with the help of the Swedish government and the Boise State University, the M.B.A. course is aimed at providing Vietnam's aspiring managers with modern financial and analytical skills. The course has produced a total of 29 graduates, many of whom are now part of the teaching staff.

Vietnam is rapidly emerging as a major center for pirated books, with virtually all of the country's bookstores carrying unauthorized copies of many best-sellers on their shelves. The popularity of these pirated editions is in large part because of price: copies only cost a fraction of the originals. Moreover, the business is not actually illegal since Vietnamese law extends copyright protection only if a work is registered in Vietnam within 30 days of foreign release.

The Ifugao Terraces Commission has been created to find ways to attract mountain tribes to stay in the Cordillera mountains and help maintain the Ifugao rice terraces, a breathtaking sight that is widely called the eighth wonder of the world. The terraces, which consist of 12,400 miles of paddy fields carved out of the Cordilleras, are in danger of deteriorating if not properly cared for. Younger Ifugaos, however, cannot be depended upon to maintain the landscape as they have been leaving the mountains to seek education or employment in urban areas.

The Philippines faces strong political and military pressure from China as itc continues to protect the Freedom island group of the controversial Spratly Islands. The Philippines shares a claim of all or part of the islands with China, Vietnam, Taiwan and Malaysia. Chinese vessels plying the area surrounding the islands have hinted that they have enough force to overrun Philippine Navy vessels at will. However, the Philippine Navy has also shown signs that it is willing to fight for the islands if necessary.

An airport modernization project, upgrading of a golf course and the construction of a museum, a marina and hotels are expected to attract more foreign tourists to Subic Bay. Majority of visitors to the former US naval base are the locals who come for duty-free shopping, with only a handful of foreigners visiting. The airport project, in particular, is seen to draw more foreigners, as transporting them from the capital of Manila through helicopters apparently discourages them from coming back.

The alleged unjust hanging of Filipino maid Flor Contemplacion for murder by the Singaporean government has sparked the nationalistic fervor of many Filipinos. Philippine Pres. Fidel V. Ramos has recalled the Philippine ambassador to Singapore and halted the deployment of Filipina maids to the country. Singapore expressed disappointment over the turn of events and cancelled Prime Minister Goh Chok Tong's planned state visit to the Philippines.

The Philippine central bank has reversed its earlier policy of weakening the peso and it is now actively intervening in an effort to arrest its declining value. Analysts believe this policy shift is aimed at appeasing foreign investors, many of whom have been extremely nervous about currency movements since the Mexican devaluation crisis started. Many predict that pressure on the peso will continue as prior measures to push down the value of the peso become implemented.