A growing interest in marketing literature has been on establishing the impact of advertising on stock value. This study illustrates the impact of advertising and celebrity endorsements on daily stock returns among publicly listed banks and other financial service firms in the Philippines. Print advertisements published in 2016 in two major broadsheets are archived and coded on the presence or absence of advertisements and celebrity endorsements. Findings show that the presence of advertisements has a marginally significant positive effect on daily stock returns one trading day after the appearance of the advertisement, while the presence of celebrity endorsements has none. The signaling-and-spillover function of advertising is used to theoretically explain the associated effect on stock price – investors perceive the company’s prospective performance based on the heuristics of advertisements.
The goal of this study is to determine the internal and external factors that influence the profitability of the Philippine banking sector. This study applies a fixed effects panel regression model to aggregated quarterly data of the commercial, universal, rural, thrift, and cooperative bank groups in the Philippines from 2008 to 2019. Return on Asset (ROA) and Return on Equity (ROE) values are used as dependent variables in two different models. The estimation shows that of the internal factors tested, bank group size (-), credit risk (-), income diversification (+), capitalization (+), and interest spread (+) are significant determinants of both ROA and ROE. Of the external factors, foreign exchange rates (+) and interest rates (-) are found to be significantly related to profitability. These results serve as a valuable reference for further study of the performance of the Philippine banking sector.
As the Philippine business environment continues to look to information technologies for new avenues of development, growth, and sustainability, the pressure to design and develop the necessary e-commerce channels to support these trends has also increased. Therefore, given this context, academic research should also keep up to provide certain theoretically sound and empirically supported evidences to provide valuable insights. In turn, these insights should address the gaps between what the environment demands, what the industry offers, and what the customers want. This research, employing an integrated theoretical framework of trust theory and the Unified Theory of Acceptance and Use of Technology (UTAUT), attempts to contribute to this issue. Analyzing data from 399 customers of online food delivery and tourism booking services, this research identifies certain factors that affect Filipino online customers’ behavioral intentions to use technology, specifically the websites and mobile apps of these services. Through a battery of statistical analyses, this research shows that trust significantly contributes to these customers’ perceptions of their utilitarian, environmental, and hedonic expectations towards using websites and mobile apps. However, not all of these expectations exert significant influence on their behavioral intentions to use technology. This opens up theoretical and practical opportunities to enhance the strengths and address the weaknesses of these particular websites and mobile apps. Further implications and future research directions are also discussed.
This study looked at entrepreneurship from the entrepreneurs’ viewpoint on what enabled them to start their businesses. A semi-structured survey was used on 124 respondents – all business owners of micro-, small-, and medium-sized enterprises – who were selected via purposive and snowball sampling. Cross-tabulation, the Mann-Whitney U test (or Wilcoxon Rank Sum test), odds ratio, and logistic regression were performed to analyze the data and determine their enabling factors. The results reveal that those who planned to become entrepreneurs and those who did not have a similar personality, come from diverse educational backgrounds, and have social support and network. These findings highlight the importance of self-confidence, being inspired by successful entrepreneurs, and belonging to a peer group engaged in business. The results also reveal that the entrepreneurs’ confidence to start their businesses is triggered by the positive motivation from their social support and network. The motivation is enough to surmount their perceived obstacles to entrepreneurship – the lack of capital and government support.
Most empirical studies have focused on the non-farm labor component of the rural non-farm economy. But equally important are the non-farm enterprises in the rural economy. There is no clear picture of the non-farm enterprise participation (NFEP) of agricultural households in the Philippines. This study fills this gap by determining the prevalence and patterns of NFEP, and by identifying the factors affecting participation and size of non-farm enterprises among agricultural households. This study uses microdata from the 2015 Family Income and Expenditure Survey covering households whose main source of income is agriculture-related activities. Logit and ordinary least square regressions are used. Results show that one out of every five agricultural households engage in some form of non-farm enterprise. But such participation is considered limited and minimal per household. The contribution of the non-farm enterprise cannot be considered marginal in comparison to other sources. Participation in non-farm enterprises and the size/scale thereof are related to factors, such as age, education, marriage, family size, agricultural income, access to credit, cash support, access to basic utilities, access to communication, and main source of income. Policy interventions promoting non-farm enterprise are discussed.
Building trust in e-government is not easy, especially in a country that faces many contextual, technological, and social challenges. This discourse on Philippine e-government is an ongoing one, as many of these initiatives are piecemeal in the various branches and levels of government. This research particularly looks at three e-government platforms rendering some mandated financial services to the citizens: (1) social security services provided by the Government Service Insurance System (GSIS) and the Social Security System (SSS), and (2) tax services delivered by the Bureau of Internal Revenue (BIR). Employing a theoretical framework based on interpretations of the Information Systems Success Model and trust building towards e-government, data collected from a total of 668 respondents across the three government institutions are subjected to structural equation modeling to determine what factors influence trust in e-government. The results show that trust in technology and information quality perceptions are the most significant determinants of trust in egovernment, while there are some concerns regarding system quality in building trust in egovernment. Further implications and recommendations are also included in this research.
This paper discusses three cases of tender offers in the Philippines that led to delisting. These are Liberty Telecoms Holdings, Incorporated (LIB), Melco Resorts and Entertainment (Philippines) Corporation (MRP), and Travellers International Hotel Group, Incorporated (RWM), operator of Resorts World Manila. This paper examines the regulatory issues on tender offers, and how they affect minority stockholders.
Independent directors have a crucial and defining role in corporate governance. This paper looks at the extent of compliance by selected Philippine-listed companies with the new corporate governance code (2016), which took effect on January 1, 2017. The banking sector has the highest compliance rate among the various sectors in terms of proportion of independent directors to board size, number of directorships in other listed companies, and separation of chairman and CEO. Although an Audit Committee is required for all listed companies, not all SEC 17-A reports contain information on board committees and their memberships. The qualifications of the Audit Committee Chairman in some companies also appear to have not met the prescriptions by the new corporate governance code. It is suggested that a SEC 17-A template be provided to listed companies, so that uniform and consistent data can be obtained from this report by the SEC to facilitate their monitoring role.
This study attempts to explain the volume and pattern of international trade activities of the Philippines with its trading partners, by looking at economic and noneconomic, cultural factors using an extended version of the gravity model of trade (GMT). The GMT reveals the strong effects of gross domestic product (GDP) and distance on trade. The empirical results also show that noneconomic and cultural factors, like religion and colonial history, are important in explaining trade patterns of countries. In general, this study suggests that overall trade policy and industrial program should be designed to consider not only the economic aspects, but also the noneconomic and cultural factors that can increase international trade activity and encourage a more prominent role of the Philippines in the world economy.
This paper looked into the factors that determine the life satisfaction of an expatriate spouse/partner. Social identity and identity disruption theories informed the testing of hypotheses. This study utilized snowball sampling. The initial survey started by sending emails, containing the link to a questionnaire in Google Forms, to expatriate spouses/partners who were in Malaysia and Singapore. They were encouraged to forward the email to other expatriate spouses/partners. The total number of respondents was 128. The survey was undertaken from September 2016 to April 2017. Regression results supported the predictions on the individual determinants of life satisfaction, namely, a negative change in employment status and self-efficacy. The study did not find support for the hypotheses regarding interpersonal and environmental factors and life satisfaction. Future research can further look into the mediating role of self-efficacy on the relationship between support from family and life satisfaction, and the nuances of the relationship between support from friends and life satisfaction.
Using data of Philippine-listed firms from 2014 to 2018, this study tests how determinants of dividend payout policy affect cash dividend payout’s likelihood and magnitude. It shows liquidity, firm size, and insider ownership, measured as an insider as the largest shareholder, having a significant positive effect on dividend payout likelihood. Dividend payout magnitude is positively affected by profitability and leverage, and negatively affected by insider ownership. Liquidity, leverage, and insider ownership have contradictory results for both likelihood and/or magnitude of dividend payout, and may require further studies using either more appropriate measures and/or methodologies.
This paper determined the service quality dimensions considered by Filipino consumers important in describing an excellent bank. Development of the service quality dimensions utilized the Service Quality (SERVQUAL) framework espoused by Parasuraman, Zeithaml, and Berry (1988) which identified five SERVQUAL dimensions: (1) tangibles, (2) reliability, (3) responsiveness, (4) assurance, and (5) empathy. A total of 24-bank SERVQUAL attributes were developed from this SERVQUAL framework. A survey using a multi-stage systematic random sampling was conducted. A total of 242 Filipino consumers participated in this study. The respondents were asked to rate the degree of importance of each of the 24-bank SERVQUAL attributes using the Q-methodology. The internal consistency method using the Cronbach coefficient alpha was used to assess the instrument’s reliability while Exploratory Factor Analysis using Principal Component Analysis was employed to determine the construct validity
This paper seeks to examine the empirical relationship between interest rates and risk-taking activities used by banks in the Philippine setting. Adopting an earlier study conducted in China’s banking risk and policies, the authors use non-performing loan ratio to estimate the bank risk and construct a panel regression model to test the bank risk’s relationship with BSP’s policy rate, bank-level overnight lending facility rate, and reserve requirement ratio. The study uses a quarterly database of balance sheet information containing selected performance indicators of universal bank, commercial bank, thrift bank, rural bank, and cooperative bank groups in the Philippines from 2008 to 2018. The study also analyzes and explains the effects of other alternative factors that could impact bank risks, including bank-specific characteristics and macroeconomic factors. The results show that the central bank’s policy rate and overnight lending facility rate posted negative and statistically significant effects on bank risk, while the reserve requirement ratio posted a negative but insignificant effect on bank risk. The same statistically negative effect is observed on the banks’ total assets, return on assets, and capital adequacy ratio, while the country’s Gross Domestic Product (GDP) posted insignificant effect on bank risk. These results are theoretically interpreted by a model, and serve as a valuable reference for the further study of monetary and financial policies in the Philippines.
This paper uses conjoint analysis to examine the social influence (e.g., social group recommendations) of an individual consumer’s immediate social circle on his/her financial product preferences. It proposes that social influence from individuals with whom the consumer has strong ties is stronger than that from those with whom he/she has weak ties in choosing financial products through word-of-mouth referral or recommendation. The importance of social influence on financial product preference is associated with consumers’ familiarity with the product and their susceptibility to interpersonal influence. Results reveal that recommendations from social groups with strong ties are influential when forming preferences on financial products. Moreover, social influence becomes significant in financial product selection when consumers are less familiar with the product and are more susceptible to interpersonal influence. While this kind of social influence shows a contributory effect, it has a marginal estimated utility compared with the more explicit attributes of financial product choices (e.g., risks and returns). Despite the expected observation, the study shows a tendency to defer to the value of social influence in contexts where consumers are not familiar with a financial product.
This paper discusses corporate governance issues in Philippine-listed companies such as ownership structure, separation of Chairman and CEO positions, independent directors, related party transactions, among others, and how non-controlling stockholders are adversely affected by these issues. The paper also assesses the sufficiency of existing rules and regulations and the effectiveness of regulators in protecting minority interest.
This paper presents a small macroeconometric model of the Philippine economy. The model consists of eleven equations, six of which are behavioral equations and five are identities. The six behavioral equations of the model are estimated using OLS on annual macroeconomic data from 1999 to 2015. In-sample forecast of the endogenous variables is conducted to determine the tracking ability of the model. The simulation results show satisfactory tracking ability as shown by the simulation statistics and reflected in the graphs of the simulated variables. This shows that the model has adequate forecasting capability and may be used to conduct sensitivity and policy analysis.
This study investigates the relationship between corporate diversification and firm performance of Philippine publicly-listed non-financial firms, using the resource-based view (RBV) view of the firm as its framework. The results show that the: (1) degree of diversification has a positive effect on firm performance; and (2) type (related or unrelated) of diversification has different effects on firm performance, with related diversification outperforming unrelated diversification. Ultimately, firm performance is linked to the successful diversification of valuable, rare, and inimitable economies of scope to related businesses, and not just to the absolute amount of diversification.
Companies can be categorized as cyclical or defensive based on their performance in various phases of the business cycle. Cyclical companies exhibit performance directly related to the business cycle, while defensive companies tend to display stability in the face of economic booms and busts. Given the link between earnings and stock price, as well as the stock market index as an indicator of the economic cycle, cyclical company stocks are commonly expected to exhibit returns highly correlated to the stock market index, while returns on defensive company stocks are generally believed to display low correlation to index returns. The above is especially useful in equity valuation, particularly in the use of the capital asset pricing model (CAPM) and the beta coefficient, where analysts typically perform valuation sense-checks on the beta variable – cyclical company stocks should generally have beta coefficients greater than 1, while defensive company stocks should generally have beta coefficients less than 1. Based on selected Philippine stock price data, the above sense-check holds true for defensive company stocks, while it does not hold true for cyclical company stocks.
Firms have the flexibility to choose the valuation model and the sources for input variables in determining the fair value of stock options. Thus, firms may be motivated to choose the variables which will result in lower fair value for the stock options. This will translate to lower compensation expense and higher net income. This paper aims to show how selected publicly listed Philippine companies determine the fair value of their stock options.
Amidst its highly contested entrance into the Philippine market, Transportation Network Vehicle Services (TNVS) have significantly affected the life of the typical Metro Manila commuter. This study aimed to contextualize the consumer decision process behind the selection of private land transportation options among Metro Manila users, in order to direct policy discourse for policymakers and to define the competitive dimensions in the industry for key players. In particular, the study aimed to understand the reasons behind usage and preference of traditional taxi services (TTS), Grab, and Uber – the leading private transport brands in the city. The results were intended as input into a Usage, Attitude, and Image (UAI) market research study to accurately depict consumer response to the brands. Using market reports and in-depth interviews, the study described the key service attributes that consumers consider and evaluate, compared against the core service features of these transport options. A comprehensive industry analysis was done to compare and contrast the brands objectively. The fundamental service attributes were broadly defined as ride completion, safety, value for money, convenience, and ride experience, each composed of subattributes or features that all lead to customer satisfaction. The study concludes that multiattribute variable comparison through conjoint analysis will be more suitable than a UAI study to depict consumer acceptability and preference for TNVS brands.
