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Focused on being focused

(Article published in the Nov 13, 2008 issue of Manila Standard Today)

Buzzwords come and go.  For now, in these times of economic slowdown triggered by the inevitable realization world-wide that “structured” meant very little beyond “very little protection”, the mantra of the month is “focus.”  Like “structured” that gave the impression of being well-built, “focus” implies singleness of purpose.  The unsaid premise is that being structured, and later being focused, is equivalent to being able to say the magic words “Open Sesame”. 

“Focus” is essentially a term of the physical sciences.  My cheap Webster and Oxford dictionaries both say that its primary meaning was “a point at which rays or waves meet after reflection or refraction” (Oxford) or “a point at which rays (as of light, heat, or sound) converge or from which they diverge or appear to diverge” (Webster).  Both do not say, however, what the point is.

Which is why it is was difficult for me to get inspired by the words of still president, Gloria Macapagal Arroyo spoken in the one-on-one interview she gave to business writer Babe Romualdez on the 7th of November, 2008 at the Orchid Room in Malacanang.  Babe reports, at the start of his excerpts, that, on what keeps her resilient, the PGMA said, among other things, “Being a person of discipline, I’m very focused…on our reform agenda, on the economy, the environment, education…and I think this has given us the resilience we are exhibiting today in the face of the global credit crunch.”


Reform, economy, environment, education, things she had always talked about at her SONAs, are quite a number of points, and not just one.  Taking her word for it, she is not really just “focused”, she is, if I remember my Henley latin, very much “foci.”

At the end of Babe’s excerpts, PGMA is further said to have said, this time on her plans for retirement, “I am very focused on the here and now.  I don’t think in terms of legacy but in terms of what I have to do.  My duty is to leave the economy better than when I found it.  At the end of the day, hopefully the people will look at the future with more hope and optimism.”

I cannot see, though, with my uneconomic mind, how being her “focused on the here and now” will lead me to “look at the future with more hope and optimism.”  All along, my old-fashioned teachers at Torres High School had told me that the key to living well is to forego the allures of the present in order to achieve the promise of the future.  That was meant to drive us to work, not talk, hard now so that we poor boys from the bad side of Tondo could move to the better side of town.

Contrast PGMA’s focus with the focus of Peter Sands.  Peter Sands is chief of Standard Chartered Bank.  He, together with the bank’s chairman, Mervyn Davies, is widely credited for engineering, i.e. thinking up and selling to the authorities, the bold English plan to infuse equity into british banks, in stark contrast to the timid American scheme, to buy the banks’ toxic assets. 

Mr. Sands, also in an interview, said in Singapore that, instead of crystal ball-gazing about the global crisis, he “would much prefer to be running a bank focused on Asia, given the relative strength and resilience of the Asian economies…”  Indeed, Mr. Sands has a lot of things to be focused on in Asia.

In Hong Kong, Standard Chartered Bank, admits country head Benjamin Hung Pi-cheng, has 2,200 clients invested in Lehman Brothers-linked structured products, about whom 220 are senior citizens.  On the last day of last month, a female investor burst into tears and fainted outside its branch, all in front of the TV cameras.  Media was then covering the march of several hundred investors to Standard Chartered Bank and seven other banks, such as ABN Amro, Bank of China, Citic Ka Wah, and DBS Bank.  Placards were said to have shouted, “My money gone, I don’t want to live.”

Standard Chartered Bank Hong Kong is candid about the situation.  The CEO announced that it would take responsibility for cases where the methods of selling investment products did not meet its standards.  He said there were indeed “individual cases that may not have met the bank’s internal standards.”

In Korea, 97 small and medium sized companies filed a class suit against major banks, claiming that they incurred losses when they bought currency options contracts known as KIKOs (knock-in knock out).  Initially designed to help exporters hedge against volatile currency fluctuations, the KIKO became too burdensome when the soaring exchange rate of the won forced them to buy more expensive dollars to repay their dollar loans.  The total losses of the suitors amounted to 1.7 trillion won ($1.3 billion) and the cases were filed against, among others, Standard Chartered Bank, Citibank, Shinhan Bank and Korean Exchange Bank.

Citibank analysts, last month, estimated that Standard Chartered Bank needed to raise $5 billion capital, with at least $3 billion by way of equity, and saw the earnings of the bank “vulnerable” to what Citi called “substantial downgrades” next year.  Naturally, Standard Chartered Bank disagrees.  Repeatedly, it has said that it is not intending to raise new capital and, in fact, announced that it had no intention of accepting Her Majesty’s funds proferred by Gordon Brown, precisely in line with the Sands-Davies presentation to the government. “We’re very comfortable with our capital ratios,” Davies was quoted as saying.

Standard Chartered Bank’s shares listed in London are said to have lost nearly 46 percent since the start of the year and, since Asia accounts for a big percentage of the bank’s business, Peter Sands spends a lot of time visiting the area.  He had gone to China six times, to India five times, two or three times to Singapore where he recently attended the Human Capital Summit organized by the city-state’s Ministry of Manpower and Singapore Workforce Development Agency. 

The Philippines, of course, is not known to have been visited by Mr. Sands or by any such senior official.  That’s because there is no need to.  Standard Chartered Bank Manila has been long before “focus” became fashionable already “focused,” in fact, for a select group of clients, “focused” on “structured” products.  For the longest time, and up to now, the Manila unit offers its “sophisticated investors”, someone like, I suppose, Noel Baviera, structured deposits which are essentially investments linked to the performance of indentified underlying assets.  Such assets, says its website, “may be currencies, commodities, or rates, among others.”  And unlike most deposits in Philippine banks, these structured deposits are not saddled by the cost of insurance, the same not being covered by the Philippine Deposit Insurance Corporation.