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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

MDG POVERTY ERADICATION: NOY GOVT MISSED 19 MDGs DESPITE P10.3-T BUDGET


SEPTEMBER 28 -During the term of President Aquino with his “tuwid na daan” (straight path) and inclusive growth mantras, a total of P10.34-trillion budget was allocated but still the government failed to meet 19 out of 28 millennium development goals (MDGs) pledged to the United Nations (UN) program to eradicate poverty and uplift people’s welfare.
Aquino even had the audacity to declare that the Philippines would join the First World in due time even as the poverty level had risen to 25.8 percent according to the refurbished formula of the National Statistical Coordination Board (NSCB) and 66 percent according to the independent Ibon Foundation which used the generally accepted poverty formula in analyzing official data. Vice President Jejomar Binay also criticized government’s failure to move strongly in providing medical and health care, stressing that P4.63 billion had been wasted in the past few years through huge stocks of expired medicines, incomplete facilities, ill-maintained laboratories and regional hospitals. The Philippine government is notorious for missing vaccines, prophylactics, dietary supplements, restricted medicines, and even vitamins and minerals that are cheap to produce.Binay’s own grandchild was downed by dengue, along with the recently-freed Senator Juan Ponce Enrile, who may be on record as the oldest dengue victim at 91.MDGs will now be replaced with Sustainable Development Goals (SDGs) to be defined by the UN, which has as its anchor the eradication of poverty on the face of the earth by 2030, elimination of hunger that afflicts at 800 million people and illiteracy, which involves more than 100 million people, 60 percent of them females.The UN meeting, which ends on September 27, seeks to win consensus among member-states to wage a united front against climate change, with the biggest emitters being China, United States, Canada, Japan, Russia, Brazil, and other developed countries.For the past three years, Social Watch Philippines (SWP) had been lobbying with the Aquino government to raise its budget spending for agriculture, social services, education, health, persons with disabilities (PWDs), senior citizens, the woefully disadvantaged.Instead of doing so, Aquino and Budget Secretary Florencio “Butch” Abad crafted the non-budget disbursement acceleration plan (DAP), which is not a program and is not listed in the programs, activities and projects (PAPs) in the 2011 General Appropriations Act (GAA), that sequestered P116 billion from various departments and agencies as savings and used the same for projects not covered by the GAA. READ MORE...

ALSO: Pinoys most concerned about inflation and workers’ pay —Pulse Asia[The survey showed that 47 percent of Filipinos are most concerned with the country's inflation while 46 percent are concerned with workers' pay.]


SEPTEMBER 28 -The Philippine economy slowed to a 5.6 percent growth in the second quarter, falling below the government’s target.
 Controlling inflation and improving or increasing the pay of workers are the two most urgent national concerns of Filipinos, a recent Pulse Asia survey said. Forty-seven percent of respondents ranked inflation as the topmost issue the Aquino goverment must address, while 46 percent picked workers' pay as their first concern, Pulse Asia's June 2015 Nationwide Survey on Urgent National Concerns revealed. The survey was conducted face-to-face among 1,200 adults 18 years old and above last May 30 to June 5, 2015. The margin of error was ± 3% at the 95 percent confidence level. Graft and corruption, jobs creation Also of immediate concern for Filipinos are fighting graft and corruption in government, which came in third at 39 percent, followed by creating more jobs at 36 percent. The rest of the concerns picked by the respondents are ranked as follows: Reducing poverty of many Filipinos: 35 percent Increasing peace in the country: 21 percent Fighting criminality: 20 percent Enforcing the law on all: 16 percent Stopping the destruction and abuse of our environment: 15 percent Controlling fast population growth: 9 percent Defending the integrity of Philippine territory against foreigners: 7 percent Changing the Constitution: 4 percent Preparing to successfully face any kind of terrorism: 4 percent Pulse Asia said the respondents were asked to pick three issues from a list that they think the Aquino government should act on immediately. They were also told they can add other concerns not on the list. —KG, GMA News -THIS IS THE FULL REPORT.

ALSO: Market fails to sustain early gains


OCTOBER 2 -The benchmark Philippine Stock Exchange index (PSE) tumbled 3.04 points, or 0.04 percent, to close at 6,890.94. STAR/File photo The stocks market started the day with early gains but failed to sustain the upward momentum, finishing the session in the red.
The benchmark Philippine Stock Exchange index (PSE) tumbled 3.04 points, or 0.04 percent, to close at 6,890.94. In contrast, the broader All Shares index was up 3.01 points, or 0.08 percent to settle at 3,975.45.It was a mixed basket of ups and downs as far as other indices were concerned. The financials, services, mining and oil and the property indices all closed in positive territories. Analysts said investors are still on the look out for positive leads. “The market’s movements in the last couple of weeks show investors’ sensitivity to the daily news cycle – unfortunately, a no-news day takes on a negative bias. This is the usual ‘predicament’ when headwinds blow over an already uncertain environment,” said Justino Calaycay of Accord Capital. BDO Capital president Ed Francisco believes, however, Philippine shares are now more attractive. Shares prices are bound to see a “recovery very soon,” Francisco said. Value turnover stood at P5.71 billion even as advancers beat decliners 100 versus 63, while 55 stocks were unchanged. READ MORE...

ALSO: National debt grows amid weak peso
[The increase was driven by a rise in foreign debts “due to the continued impact of the peso depreciation.”]


OCTOBER 2 -Weaker peso drives up government debt to P5.9 T The peso’s depreciation against other currencies continued to push the amount of debt the national government owes with the rest of the world as of the end of August, latest data from the Bureau of the Treasury showed.
The state debt pile hit P5.898 trillion for the first eight months, up 0.9 percent from P5.847 trillion recorded as of the end of July. Compared to the January to August 2014, liabilities rose by 3.2 percent. According to a Treasury statement, the increase was driven by a rise in foreign debts “due to the continued impact of the peso depreciation” against the US dollar and other major currencies. Domestic debts, meanwhile, even declined. Broken down, local debts totaled P3.856 trillion, while their foreign counterparts reached P2.042 trillion. The former dipped 0.1 percent, but the latter rose by a faster 2.7 percent in August. Capital has been flowing out of Asia, including the Philippines, in recent months as investors weigh the possibility of higher interest rates in the US — considered as investor safe haven - with weakness in emerging markets such as China. In turn, this pushed down the value of currencies in the region against the greenback. As of October 1, the peso, in particular, has declined 4.47 percent against the US unit since it closed at 44.72 in Dec. 29, 2014, the last trading day of that year. READ MORE...

ALSO: PAL uses Boeing 777 fleet for Manila-New York flights
[The arrival of a Boeing 777-300ER at New York JFK early on March 16, 2015 heralded the return of Philippine Airlines service to New York City, 18 years after the carrier ended its brief and unsuccessful first attempt to serve America’s largest metropolitan area. Philippine Airlines flight PR126, the airline’s new Manila-New York flight (which makes an intermediate stop at Vancouver), left Manila’s Nina Aquino International Airport on March 15.]


OCTOBER 2 --Until at least 2021, the Boeing 777-300ER will be the largest aircraft type in the Philippine Airlines fleet. Eventually it could be supplanted as PAL’s largest aircraft by the Boeing 777X PHOTO FROM Airlinesand destinations.com
Philippine Airlines said Friday it will use Boeing 777 fleet for its Manila-to-New York flights in order to increase seat capacity on the route. The country’s flag carrier will shift to the 370 seater state-of-the-art, fuel-efficient B777-300s from the 254-seater Airbus A340s as operating fleet for long-haul operations between the two cities, with a Vancouver stop-over by October. “Using the B777 to the US Mainland enables us to achieve our goal of operating our long haul flights efficiently and economically. With this shift, passengers on the route will experience PAL’s trademark Filipino service in the comfort of the modern B777,” PAL president and chief operating officer Jaime Bautista said. PAL currently utilizes B777s for its San Francisco, Los Angeles, Vancouver and Toronto operations as well as select regional and international routes. The flag carrier is taking delivery of two additional units, slated to arrive in October and December 2016, respectively. READ MORE...

ALSO: The evolving role of CFO in today’s digital economy


SEPTEMBER 28 -Businesses and communities are becoming hyper-connected, giving rise to the Digital Economy. This new economy is more collaborative, intelligent, ...FROM CFOINNOVATION.COM  The world has gone digital. Music is now digital, and books are trending towards eBooks. GPS devices are disappearing – owing to the smartphones and smartphones are now cameras. Businesses and societies are interacting in ways never before imagined. This hyperconnectivity is reinventing the world economy, leading to a new digital economy. This new economy is more collaborative, intelligent, responsive, and efficient with dramatic increases in productivity and value for those ready to embrace it. With a shift as fundamental as this, organizations must remain agile and innovative to remain relevant. Specifically, what does this mean to the chief financial officer (CFO)? To better understand how CFOs are managing their ever-expanding horizons and challenges they will face in the years ahead, CFO Research, in collaboration with SAP, recently conducted a global survey of 331 senior finance executives at companies with more than $500 million in revenue in 2013. These finance executives, representing a broad range of industries, were based in Asia/Australia, Europe, Latin America, and North America and reported interesting new scenarios highlighting how CFOs could drive profitable growth through better planning and predictive analysis with Big Data Analytics and Finance’s new role in driving growth and providing business leadership. Research as the one above denote how CEOs are looking more than ever to their CFOs to guide them through these uneasy times, to act as a catalyst and an agent of change. Within this context, the role of the CFO is evolving. READ MORE...


READ FULL MEDIA REPORTS HERE:

Aquino failed to meet 19 MDGs despite P10.3-T budget

MANILA, OCTOBER 5, 2015 (TRIBUNE) Written by Gerry Baldo Monday, 28 September 2015 00:00 - During the term of President Aquino with his “tuwid na daan” (straight path) and inclusive growth mantras, a total of P10.34-trillion budget was allocated but still the government failed to meet 19 out of 28 millennium development goals (MDGs) pledged to the United Nations (UN) program to eradicate poverty and uplift people’s welfare.

Aquino even had the audacity to declare that the Philippines would join the First World in due time even as the poverty level had risen to 25.8 percent according to the refurbished formula of the National Statistical Coordination Board (NSCB) and 66 percent according to the independent Ibon Foundation which used the generally accepted poverty formula in analyzing official data.

Vice President Jejomar Binay also criticized government’s failure to move strongly in providing medical and health care, stressing that P4.63 billion had been wasted in the past few years through huge stocks of expired medicines, incomplete facilities, ill-maintained laboratories and regional hospitals.

The Philippine government is notorious for missing vaccines, prophylactics, dietary supplements, restricted medicines, and even vitamins and minerals that are cheap to produce.

Binay’s own grandchild was downed by dengue, along with the recently-freed Senator Juan Ponce Enrile, who may be on record as the oldest dengue victim at 91.

MDGs will now be replaced with Sustainable Development Goals (SDGs) to be defined by the UN, which has as its anchor the eradication of poverty on the face of the earth by 2030, elimination of hunger that afflicts at 800 million people and illiteracy, which involves more than 100 million people, 60 percent of them females.

The UN meeting, which ends on September 27, seeks to win consensus among member-states to wage a united front against climate change, with the biggest emitters being China, United States, Canada, Japan, Russia, Brazil, and other developed countries.

For the past three years, Social Watch Philippines (SWP) had been lobbying with the Aquino government to raise its budget spending for agriculture, social services, education, health, persons with disabilities (PWDs), senior citizens and the woefully disadvantaged.



Instead of doing so, Aquino and Budget Secretary Florencio “Butch” Abad crafted the non-budget disbursement acceleration plan (DAP), which is not a program and is not listed in the programs, activities and projects (PAPs) in the 2011 General Appropriations Act (GAA), that sequestered P116 billion from various departments and agencies as savings and used the same for projects not covered by the GAA.

READ MORE...

Even the bottom-up budgeting (BUB) espoused by SWP ended up being used by the Department of Interior and Local Government (DILG) for projects that are not within its mandate but perfectly appropriate for political purposes.

BUB projects include waterworks projects, housing and even village roads, none of which is technically covered by the functions of then Interior Secretary Mar Roxas, now the Libeal Party (LP) candidate for President in the May 2016 election.

Now, SWP is again appealing to the Lower House and Senate to support alternative budget proposals for 2016, demanding that budget proposals crafted by the Alternative Budget Initiative (ABI) be considered.

SWP admits that Aquino’s key MDGs will not be attained by the deadline at year’s end, with lead convenor and University of the Philippines (UP) Prof. Leonor Magtolis lamenting that “the reckoning year of the MDGs shall conclude with alarming scenarios given the government missing its MDG poverty target of 17.2 percent by this year and its inability to achieve targets in 19 out of 28 indicators. And that is despite the steady surge in budget allocation which has gone up to P10.34 trillion for the last five years.”

ABI recognizes the 2016 budget as the last chance to meet the MDGs and as a prelude to financing for the post-Aquino regime but added that on its ninth year, the group will carry on the campaign for increased budgets in major social development areas.

“That is why we see our alternative budget proposals and sources of financing as crucial intervention to fund appropriate programs and projects which can improve people’s lives. We also want to ensure that the national budget will serve its purpose as an equalizer that addresses inequality and socio-economic problems tackled by the MDGs,” Briones said.

“While not given the opportunity to present our alternative budget analyses and proposals before the House Committee on Appropriations for the first time during the last nine years, the ABI will continue to provide budget briefings to individual and groups of legislators and their staff in both Houses of Congress.

We are also open to conduct our presentation to other interested members of the House and Senate,” she added.

There is also much to be desired in the 2016 proposed budget, which administration critics said can be utilized for election spending.

“While the national budget reached P3-trillion threshold for next year, we urge the House and Senate to consider and endorse civil society alternative budget proposals which aim to finance the MDG backlogs that have long hampered our pursuit towards sustainable development, reduction of inequality and eradication of extreme poverty,” Briones argued.

“The continued presence of vulnerable lump sum appropriations such as special purpose funds, unprogrammed funds and automatic appropriations, as well as PDAF- and DAP-like allocations, overstatements, budget errata and redefinition of savings, remains a significant challenge in exacting accountability in spending the national budget under a development framework.

We call on the citizens to join us in keeping the 2016 Budget under close scrutiny especially in light of the election season which has actually started this year,” she said.

--------------------------------------------------

RELATED FROM KILUSANG MAYO: Press Statement 03 October 2015

Abad, Aquino should both go to jail over DAP

We condemn Ombudsman Conchita Carpio-Morales for excluding Pres. Noynoy Aquino from the list of government officials who should be investigated over the Disbursement Acceleration Program (DAP) and for saying that the involvement in the program is a non-impeachable offense for the president.

This decision is the ultimate proof that Carpio-Morales, who takes on a feisty persona when going after Aquino’s electoral opponents, is really an Aquino stooge.

It is part of the ongoing whitewash operation on one of the biggest scandals that hit the Aquino government. It again shows that “daang matuwid” is a sham.

Budget Sec. Butch Abad’s admission that all DAP projects were approved by Aquino indicates that the president should be investigated, charged, and jailed together with him. It has been clear from the very beginning that Aquino was instrumental in the DAP’s creation and implementation.

As one of the Cabinet officials most abhorred by the public, Abad invoked Aquino’s name to try to diffuse blame with someone who has been cleared by the Ombudsman of any wrongdoing anyway. Abad’s admission further indicts himself and Aquino and should be used against them in the courts.

Aquino is still not off the hook on the DAP and other issues. We are calling on all presidentiables to hold the Pork Barrel King accountable over the creation and use of his biggest pork barrel fund. We vow to continue to call for accountability over the creation and use of this huge program for corruption.

Reference: Elmer “Ka Bong” Labog, KMU chairperson, 0908-1636597


GMA NEWS ONLINE

Pinoys most concerned about inflation and workers’ pay —Pulse Asia September 28, 2015 8:27am Tags: pulseasiasurvey, inflation


The Philippine economy slowed to a 5.6 percent growth in the second quarter, falling below the government’s target.

Controlling inflation and improving or increasing the pay of workers are the two most urgent national concerns of Filipinos, a recent Pulse Asia survey said.

Forty-seven percent of respondents ranked inflation as the topmost issue the Aquino goverment must address, while 46 percent picked workers' pay as their first concern, Pulse Asia's June 2015 Nationwide Survey on Urgent National Concerns revealed.

The survey was conducted face-to-face among 1,200 adults 18 years old and above last May 30 to June 5, 2015. The margin of error was ± 3% at the 95 percent confidence level.

Graft and corruption, jobs creation

Also of immediate concern for Filipinos are fighting graft and corruption in government, which came in third at 39 percent, followed by creating more jobs at 36 percent.

The rest of the concerns picked by the respondents are ranked as follows:

Reducing poverty of many Filipinos:
35% Increasing peace in the country:
21% Fighting criminality:
20% Enforcing the law on all:
16% Stopping the destruction and abuse of our environment:
15% Controlling fast population growth:
9%t Defending the integrity of Philippine territory against foreigners:
7%  Changing the Constitution:
4%  Preparing to successfully face any kind of terrorism

Pulse Asia said the respondents were asked to pick three issues from a list that they think the Aquino government should act on immediately.

They were also told they can add other concerns not on the list. —KG, GMA News -


PHILSTAR

Market fails to sustain early gains By Iris C. Gonzales (The Philippine Star) | Updated October 2, 2015 - 12:00am 1 0 googleplus0 0


The benchmark Philippine Stock Exchange index (PSE) tumbled 3.04 points, or 0.04 percent, to close at 6,890.94. STAR/File photo

MANILA, Philippines - The stocks market started the day with early gains but failed to sustain the upward momentum, finishing the session in the red.

The benchmark Philippine Stock Exchange index (PSE) tumbled 3.04 points, or 0.04 percent, to close at 6,890.94.

In contrast, the broader

All Shares index was up 3.01 points, or 0.08 percent to settle at 3,975.45.It was a mixed basket of ups and downs as far as other indices were concerned.

The financials, services, mining and oil and the property indices all closed in positive territories.

Analysts said investors are still on the look out for positive leads.

“The market’s movements in the last couple of weeks show investors’ sensitivity to the daily news cycle – unfortunately, a no-news day takes on a negative bias.

This is the usual ‘predicament’ when headwinds blow over an already uncertain environment,” said Justino Calaycay of Accord Capital.

BDO Capital president Ed Francisco believes, however, Philippine shares are now more attractive.

Shares prices are bound to see a “recovery very soon,” Francisco said.

Value turnover stood at P5.71 billion even as advancers beat decliners 100 versus 63, while 55 stocks were unchanged.


PHILSTAR

National debt grows amid weak peso By Prinz Magtulis (philstar.com) | Updated October 2, 2015 - 6:22pm 0 0 googleplus0 0


Weaker peso drives up government debt to P5.9 T

MANILA, Philippines - The peso’s depreciation against other currencies continued to push the amount of debt the national government owes with the rest of the world as of the end of August, latest data from the Bureau of the Treasury showed.

The state debt pile hit P5.898 trillion for the first eight months, up 0.9 percent from P5.847 trillion recorded as of the end of July. Compared to the January to August 2014, liabilities rose by 3.2 percent.

According to a Treasury statement, the increase was driven by a rise in foreign debts “due to the continued impact of the peso depreciation” against the US dollar and other major currencies. Domestic debts, meanwhile, even declined.

Broken down, local debts totaled P3.856 trillion, while their foreign counterparts reached P2.042 trillion. The former dipped 0.1 percent, but the latter rose by a faster 2.7 percent in August.

Capital has been flowing out of Asia, including the Philippines, in recent months as investors weigh the possibility of higher interest rates in the US — considered as investor safe haven - with weakness in emerging markets such as China.

In turn, this pushed down the value of currencies in the region against the greenback. As of October 1, the peso, in particular, has declined 4.47 percent against the US unit since it closed at 44.72 in Dec. 29, 2014, the last trading day of that year.

READ MORE...

A weaker currency means the country will need to shell out more pesos to settle liabilities in dollars or other foreign units.

Earlier, Finance Secretary Cesar Purisima said the Philippines is well-positioned to absorb the impact of the peso’s decline, saying state debts are mostly in pesos and therefore, not affected by currency swings.

Bulk of foreign and local debts are owed through government securities, Treasury data showed. State securities serve as investment outlets for investors by offering their money to the government, which pays it back with interest at a given time in the future.

For offshore liabilities, a total of P1.292 trillion in bonds were floated as of August. They are composed mainly of the US dollar bonds (P1.097 trillion), Japanese yen or samurai bonds (P38.598 billion), euro securities (P26.276 billion) and peso global bonds (P129.679 billion).

At the local front, outstanding Treasury bonds and bills are at a higher P3.855 trillion during the same period. Auctions for T-bonds and T-bills are held every two weeks.

The government borrows from the domestic and foreign markets to finance its budget deficit or to replace debts with high interest and short payment terms with low-yielding and longer-dated ones.

As of August, the budget deficit—which indicates more revenues were spent than earned—totaled P3.4 billion, way below this year’s cap of P283.7 billion. In August alone, a surplus of P15 billion was recorded.


MANILA STANDARD

PAL uses Boeing 777 fleet for Manila-New York flights By Darwin G. Amojelar | Oct. 02, 2015 at 11:50pm


Until at least 2021, the Boeing 777-300ER will be the largest aircraft type in the Philippine Airlines fleet. Eventually it could be supplanted as PAL’s largest aircraft by the Boeing 777X PHOTO FROM Airlinesand destinations.com

Philippine Airlines said Friday it will use Boeing 777 fleet for its Manila-to-New York flights in order to increase seat capacity on the route.

The country’s flag carrier will shift to the 370 seater state-of-the-art, fuel-efficient B777-300s from the 254-seater Airbus A340s as operating fleet for long-haul operations between the two cities, with a Vancouver stop-over by October.

“Using the B777 to the US Mainland enables us to achieve our goal of operating our long haul flights efficiently and economically. With this shift, passengers on the route will experience PAL’s trademark Filipino service in the comfort of the modern B777,” PAL president and chief operating officer Jaime Bautista said.

PAL currently utilizes B777s for its San Francisco, Los Angeles, Vancouver and Toronto operations as well as select regional and international routes.

The flag carrier is taking delivery of two additional units, slated to arrive in October and December 2016, respectively.

READ MORE...

Bautista earlier said the company was looking at acquiring eight wide-bodied aircraft over the next two to three years to replace A340 aircraft.

“Its still under evaluation whether we will acquire A350s or Boeing 787 Dreamliner, hopefully we can make a recommendation to the board before the end of the year,” he said.

PAL Holdings Inc. in the first half of 2015 recorded a consolidated total comprehensive income of P5.94 billion, up 1,500 percent from just P362.4 million year-on-year.

Total revenues in the first half rose 14 percent to P55.95 billion from P48.95 billion a year earlier. Revenues in the second quarter reached P28.09 billion, up 2.9 percent from P27.23 billion.

The company aims to book 12 million passengers this year, higher from about 10 million passengers in 2014.


PHILSTAR (BUSINESS AS USUAL)

The evolving role of CFO in today’s digital economy By Ryan Poggi, Managing Director SAP Philippines (The Philippine Star) | Updated September 28, 2015 - 12:00am 1 7 googleplus0 0


According to a study by the Ateneo Graduate School of Business, the role of today’s chief financial officers have gone beyond just scorekeepers or number crunchers. These executives have evolved to become strategists and catalysts, influencing the company’s direction and even driving innovation.

MANILA, Philippines - The world has gone digital. Music is now digital, and books are trending towards eBooks. GPS devices are disappearing – owing to the smartphones and smartphones are now cameras. Businesses and societies are interacting in ways never before imagined.

This hyperconnectivity is reinventing the world economy, leading to a new digital economy. This new economy is more collaborative, intelligent, responsive, and efficient with dramatic increases in productivity and value for those ready to embrace it.

With a shift as fundamental as this, organizations must remain agile and innovative to remain relevant. Specifically, what does this mean to the chief financial officer (CFO)?

To better understand how CFOs are managing their ever-expanding horizons and challenges they will face in the years ahead, CFO Research, in collaboration with SAP, recently conducted a global survey of 331 senior finance executives at companies with more than $500 million in revenue in 2013.

These finance executives, representing a broad range of industries, were based in Asia/Australia, Europe, Latin America, and North America and reported interesting new scenarios highlighting how CFOs could drive profitable growth through better planning and predictive analysis with Big Data Analytics and Finance’s new role in driving growth and providing business leadership.

Research as the one above denote how CEOs are looking more than ever to their CFOs to guide them through these uneasy times, to act as a catalyst and an agent of change. Within this context, the role of the CFO is evolving.

READ MORE...

According to a study by the Ateneo Graduate School of Business, the role of today’s chief financial officers have gone beyond just scorekeepers or number crunchers. These executives have evolved to become strategists and catalysts, influencing the company’s direction and even driving innovation.


Businesses and communities are becoming hyper-connected, giving rise to the Digital Economy. This new economy is more collaborative, intelligent, ...FROM CFOINNOVATION.COM

Today’s CFO in the Philippines is no longer confined to just maintain and control the organization’s various assets and run financial operations. CFOs are now expected to take a more proactive role in shaping the direction and performance of the company. CEOs need to recognize and accept the CFOs as a valuable partner in the development of the organization’s business strategy and policy.

At a conference held by The Corporate Treasurer in Jakarta in February 2014, the CFO panelists all agreed that “the ability to network and lobby key political decision makers was an essential ingredient for the role of CFO.” This was due to the strong government presence in the private sector, especially within industries.

Simply put, a strong CFO is vital and he needs to provide: first – a single source of truth; second – real-time finance processes underpinned with strong compliance; and third – unmatched insight and foresight.

To add on, there has been a long deliberation over how CFOs are moving from being a steward towards becoming a strategist. The discussion has further developed in recent years – the CFO has to become a strong business partner as well.

How will all these three roles come into play today, given the new digital world, new waves of technological innovations and other evolving elements?

CFO as a steward

Being a steward involves CFOs being responsible for the day-to-day accounting, treasury, finance, risk management and internal-control function. Essentially, it is about safeguarding the assets of the organization by minimizing risk, and running a tight finance operation that is efficient and effective.

CFO as a strategist

Being a strategist involves contributing to the overall business strategy. This means going beyond delivering numbers and information, to delivering strategic insights which drive performance as well as the factors affecting it. As a strategist, the CFO must involve acquiring relevant resources for the organization, and delivering organizational goals sustainably.

CFO as a business partner

In terms of the CFO being a business partner, it has typically portrayed the CFO as a business catalyst, or value integrator. Ernst & Young describes the core of business partnering as the successful combination of “practical economic theory and the effective allocation of scarce resources to achieve financial objectives.”

The firm also emphasizes a number of factors which they believe makes a CFO a good business partner. One of the most important factors underscored, in my opinion, is the ability to manage the Finance function in operating from an efficient base, allowing the best resources to focus on analysis to support strategic and commercial operations which adds value.

Fundamentally, it must be about the CFO’s ability to contribute to business decision-making to seize the right market opportunities.

Striking the right balance

Ultimately, striking the right balance among the three roles – is key for the CFO to bring true value to the business as well as for his or her own personal development. This doesn’t mean an even split across all three aspects, but rather, what makes the most sense for the business.

For example, the shift towards the CFO being a business partner is translating into CFOs allocating more time meeting with business executives, and less time on pure financial and operational matters.

However, achieving a balance requires effort, dedication and commitment (by for example creating measurable metrics for the core aspects of each role) so that results of the tripartite-CFO role can be achieved.

With CFOs taking a more business-oriented role, it is likely that they will be increasingly handed change management roles and responsibilities. This could include aspects such as technology-driven transformation, the makeover of legacy Enterprise Resource Planning (ERP) systems to new technology innovations that will streamline processes, drive collaboration, and become an overall value creator to the business.

With such additional responsibilities, striking a balance will be challenging, and vital to success.

Leveraging the right innovations

Earlier, I shared that in today’s volatile world, we need strong CFOs who are able to provide: a single source of truth, real-time finance processes coupled with strong compliance, and unmatched insight and foresight.

Today, this has been made possible by a perfect storm of technology innovations – the convergence of cloud, mobile, social and big data that is reshaping the future of business, and acting as a catalyst to empower forward-looking CFOs to achieve the three key aspects of a strong CFO.

Indeed, after striving for decades to standardize processes and improve efficiency, organizations around the world are now entering a new era of business transformation.

For the first time, the same set of technology innovations can be harnessed to help make everything smarter, faster and simpler not only for businesses as a whole but also for individuals. Today’s transformational technologies will drive tomorrow’s business innovation.


Chief News Editor: Sol Jose Vanzi

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