Value Orientations of Filipinos

Jasmin E. Acuña and Rafael Rodriguez

The study sought to validate Hofstede’s findings in 1980 on Filipino value orientations with respect to power distance, individualism, uncertainty avoidance and masculinity-femininity using 3,418 respondents from 30 communities and 25 firms.

The study found support for Hofstede’s characterization of Philippine value orientations in so far as power distance, masculinity and collectivism are concerned.  The Filipinos are very high on power distance; masculine and collectivist in orientation.

The study’s findings on uncertainty avoidance, however, suggests that the Philippines is stronger in this value orientation than what Hofstede found.  The study also provides empirical evidence of significant intra-cultural differences in these value orientations.  Education is among the factors that explain these differences.  In other words, it is not surprising to find the relatively more individualistic, masculine, anti-authoritarian and uncertainty tolerant orientations associated with longer exposures to formal education particularly when it includes the collegiate and post graduate levels.

Dividend and Capital Structure Policy in Indonesia and the Philippines: The Views of Executives of Listed Firms

Erlinda S. Echanis, G.W. Kester, R.P. Chang and S.Soedigno

This paper reports the results of surveys of the chief executive officers of firms listed on the Jakarta Stock Exchange and the Philippine Stock Exchange regarding dividends and capital structure.

The survey responses on dividend policy indicate that Indonesian and Philippines executives believe that dividend policy affects share prices.  Further, they believe that firms should have target payout ratios and strive for uninterrupted dividend payments.  Indonesian and Philippine executives seem to be aware of signaling and clientele effects.

The survey responses on capital structure policy indicate a preference for following a financing hierarchy rather than adhering to a target capital structure.  Both Indonesian and Philippine executives ranked internal equity as their first choice for long-term financing.  However, whereas Indonesian executives expressed an aversion to debt, ranking new common stock higher than debt, Philippine executives ranked bank loans ahead of common stock.

Both Indonesian and Philippine executives believe that long-term survival and maintaining flexibility are important considerations affecting a firm’s financing decisions.  They also believe that a firm’s investment and dividend decisions are more binding than capital structure decisions.

An Application of Two Binary Choice Models as Credit Scoring

Tools for Philippine LGU-Borrowers

Winona S. Pasimio

This paper presents the empirical results of applying two binary choice models as credit scoring tools for evaluating the creditworthiness of local government units (LGUs) in the Philippines.  Credit scoring is a quick and economical way of evaluating risk especially when there is a large number of potential borrowers.  The study’s findings suggest that good LGU payors exhibit quite distinct financial characteristics from poor LGU payors.  Both models reveal that the percentage rate of change of total revenue is the single most important factor associated with credit-servicing performance.  The findings indicate that quantitative credit scoring models can be employed to assess the creditworthiness of Philippine LGUs.

The Stock Price Adjustments to Stock Dividends on Ex-Date

Roy C. Ybañez

This paper provides empirical evidence of expected price adjustments on and around the ex-date of stock dividends.  Since the ex-date normally occurs weeks after the announcement date, ex-date price adjustments in an efficient market should be wealth-preserving, i.e., stock prices decline in proportion to the higher number of shares corresponding to the stock dividend.  Price adjustments that result in abnormal returns are generally attributed to some form of market friction or inefficiency.  The possible factors in the Philippine case are odd lot costs, the trading rule that limits price movements to discrete increments, the illiquidity due to delayed issuance of the corresponding shares, and transactions costs.  The study finds that other than a reasonable allowance for transactions costs, there is no unusual price pattern on the ex-date of stock dividends, and for the period immediately surrounding the ex-date.  This is generally consistent with efficient market expectations.  These findings are based on a market-adjusted-return model applied to a sample of 58 stock dividend declarations in 1995-1996 involving 44 different companies.

A Mixed-Binary Linear Model for Fleet Routing

and Multiple Product-Types Distribution

Cesar G. Tapia

This paper presents a mathematical programming approach to solving the problem of routing a fleet of vehicles for the distribution of a number of product-types in a network where each node represents a client with specific demands.  The proposed mathematical model utilizes binary and real valued decision variables and linear formulations of the objective function and the constraints.