CHAIRMAN HANS B.

SICAT
Keynote Address
Linkage Summit
March 11, 2010

[MENTION VIPs]

Ladies and gentlemen;

Good morning.

I am pleased to be a part of this summit which brings together the academe

and the industry in a joint campaign to continuously improve business

education. Such an impressive gathering of industry professionals and

business education teachers from all over the Philippines is a significant

effort in helping keep college curriculum relevant and responsive to the

current needs of the domestic and global society, which I understand is the

core aspiration of the Business Education Industry Linkage. The Philippine

Stock Exchange is a proud partner of the BEIL.

The Philippine Stock Exchange (PSE) shares this year's theme, “Beyond the

Bottom Line: Our Social Responsibility and Commitment,” in its pursuit of

reforms that will enhance investor education and foster an environment for

nation building.
Indeed, the challenges to business education in the Philippines are numerous

and well-known. When we overlay the necessity to operate, compete and

interact in the global economy, the constraints are more limiting, and

possibly result in greater negative impact.

The reality is, in a fast-moving world, educational limitations that start from

the primary and secondary levels have a cumulative effect at the university

level.

We can surmise that the average university graduate from the Philippines

has had less training or opportunities during his student years when

compared with the average graduate of other more developed economies.

Limited resources are always the bane of any educational institution, as they

are any firm or even individuals. It goes without saying that institutions with

better access to funding and academic career opportunities tend to attract

better professors, which helps increase the number of successful students.

This in turn, creates a proud alumni cadre which help promote and fund their

institution. This envious, virtuous cycle may also be a product of direct

government subsidies or huge endowment funds built up over time, as we

see in examples from Singapore, China or in the latter case, the U.S. Ivy

League schools.
Secondly, professionals in the economics and business fields who went to

graduate school around the time I did and became practitioners were living

examples who breathed, lived and worked under the free market model. In

particular, the model-- that a global financial model predicated on frictionless

movement of capital would create unprecedented global and individual

wealth-- came to a crashing halt with the recent global financial crisis. The

question now is – what model should be taught in schools?

And finally, one of the education debates centers on how much focus should

be given to educating knowledge workers versus providing practical skills for

the population. Yet it is clear that with the increase in the value of services

in the global economy, the demand for knowledge workers continues to

increase. Singapore’s focused and aggressive drive to produce a knowledge-

based economy suggests that they truly believe the survival of the nation-

state rests in this comparative advantage.

As the challenges are daunting, the main constraints that hinder the delivery

of quality education remain. The dream that extra funding can suddenly

appear from a white night is likely to remain, that – a wish. It’s possible, but

more likely, improbable. So we are left with our devices to deal with the

realities.
I posit that there are a few steps where we, as a community, can be helpful.

The first idea, of leveraging partnerships and cooperation models, is nothing

new but very powerful. The example of the Business Education Industry

Linkage is a perfect one. David Ricardo’s classic trade model of comparative

advantage is at play here. Individually, various institutions have fields of

expertise and strength, and by sharing across a wide range of other

institutions, there is no need to re-create the wheel at every instance.

Instead, those firms which have limitations can still benefit from the

collective, while contributing their own expertise to the pool.

Second, a regular and thoughtful re-evaluation process needs to be

undertaken when developing what courses need to be taught. Of course, a

binding theme over time is necessary, and here is where the strategic vision

of the country, institution or firm needs to be laid out. For example, two

sectors (amongst a few) have been identified by our policy makers as critical

to the development of the country – the Health Care Services industry and

Business Process Outsourcing field. These sectors require the direct talent,

as well as the ancilliary skills surrounding the development of the

businesses. For example, while we may be training enough nurses on one

hand, are we providing enough focus for those medical professionals who

will need help from the tourism, travel and real estate industries to promote
medical tourism within our shores? In the BPO industry, we may be training

enough finance, accounting and administration personnel in addition to call

center agents, but have we focused on educating the key engineering, IT

and security personnel required to ensure the growth and competitive

abilities of these firms?

One of the interesting shifts in MBA curricula amongst top U.S. schools is the

attempt to balance the usual corporate management and finance offerings

with classes in ethics. The recent financial scandals may not yet reflect that

change, but being thoughtful about the curriculum content demonstrates a

pro-activeness in aligning with new realities.

We know that education is a life-long process. Mitigating various constraints

means that every individual, firm and institution needs to do their part.

Families should provide appropriate role models for children. Primary and

secondary schools should educate students to the standard that they are

mandated to do so. And institutions and firms should play an active role in

continuing education to employees and management and their stakeholders.

These words, are of course, easier said than done. So I would like to spend

the next few minutes detailing how the PSE is trying to assist in the

educational arena.
We recognize that tertiary and secondary schools in the Philippines today are

provided strategic direction by the Commission on Higher Education (CHED)

and the Department of Education and I am happy to note that we are on the

right track.

To say the least, these government institutions have provided organizational

structures which allow active collaboration between the academe and

industry. CHED for example has organized technical committees and panels

composed primarily of industry practitioners to undertake the task of

continuously reviewing and updating various curricula. One specific

indication of positive change in business education today is the fact that

curricula are now focused on core competencies required by today’s

industries. In other words, our business administration courses can now

produce specialists not just generalists.

The Philippine Stock Exchange, being a pioneer of the Linkage, has actively

participated in these strategic undertakings. We have enthusiastically played

a lead role in the Technical Committee on Business Administration and have

worked closely with the Technical Panel for Business, Management &

Entrepreneurship in pushing for business education reforms.

It is necessary for the Exchange to take on such reforms as we are aware of

our limitations in the geographical investment landscape despite our

reputation as among the oldest bourses in Asia. In the Philippines this

landscape translates to less than 1% of the Philippine population as active

investors. This has compelled the PSE to refine its marketing strategy into

short term “awareness” campaigns; medium term “impact” activities; and

long-term “core” programs.

Of the three, I will focus on our long-term core programs which run parallel

to our business education reforms.

Very few exchanges can implement a market education program through the

national educational system without having their fair share of political and

bureaucratic hindrances. In the Philippines, we are fortunate to be able to

establish a strong partnership with government to aid in our long-term

academe-based projects.

For one, we have successfully integrated a capital markets subject in the

high school curriculum by introducing the capital markets in the fourth year

economics subject. Our initial pilot-test of this program was in Rizal High

School in Pasig City, the biggest public high school in the country. We intend

to follow this up with pilot-testing in both public and private high schools

nationwide. The integration program is expected to cover over 10,000 public

and private high schools all over the Philippines or an estimated 6.76 million

students.

Secondly, we are working on a proposed “Savings & Investments” college

subject jointly with the Bangko Sentral ng Pilipinas (BSP) and the Bankers’

Association of the Philippines (BAP). Our consortium is currently drafting a

syllabus which will be presented eventually to the Commission on Higher

Education (CHED) for approval as a required subject in tertiary general

education.

If successfully institutionalized, this program is expected to cover 2,112

higher education campuses nationwide with an estimated enrolment of 3 to

4 million students.

Another key undertaking of Linkage and CHED is the monitoring of the

implementation of CHED Memorandum Order 39 or “CMO 39”, which includes

among others the institutionalization of a 3 unit stand-alone capital markets

subject in business administration courses.

Faculty development is also a big component of this program. A summit

conference, such as what we have today, has become an annual endeavor.

We do this for the purpose of gathering essential feedback, distributing

instructional materials and providing useful information relative to the

instruction of the capital markets and other business subjects.

We have the PSE Certified Securities Specialist Course, an intensive 124

hour program intended for traders, analysts and business faculty who want

to improve their knowledge about the capital markets.

The PSE is also currently producing instructional materials to support the

programs I mentioned. Examples of which are video books or a compilation

of TV show segments featuring the stock market; a stock market fun board

game; and the PSE primer. A reference textbook is also being developed in

cooperation with the UP College of Business Administration. All of these will

be made available to you as soon as possible. We have also designed

learning and competitive activities which you can now participate in. Such

are the Stock Trading Game, Best Thesis Competition, the National

Economics and Capital Markets Quiz Bee.

As we shared with you earlier, we hope to address the challenge of

expanding and educating our investor base from different points. By doing

our short term campaigns, we hope to be encouraged with an immediate

and perceivable increase in market participation. While this is happening, we

also wish to breed prudent and diligent investors for the near future through
our medium term learning programs. And at length, we wish to instill a

culture of saving and investing amongst a greater number of our

countrymen through our longer term programs.

In the bigger picture, I think we have already started taking the necessary

steps towards a much needed overhaul of our educational system. In fact,

today, I think that I am already looking at a manifestation of our one of our

successes-- or the whole industry and the academe coming together from

different places to push for a competitive, responsive and relevant business

education.

Historian Daniel J. Boorstin appropriately wrote “Education is learning what

you didn't even know you didn't know”. Clearly, discovering what you didn’t

know takes a lot of time, work and resources.

So, as you mingle with your peers in this gathering, and talk about what

needs to be done, what can be done or what goals need to be achieved, I

think it would be helpful if we keep a number of things in the back of our

heads for perspective:

Are we leveraging institutional relationships to overcome resource

constraints?
Are we being thoughtful in determining content and curricula?

Are we playing our roles and doing enough in our own spheres?

Perhaps, if we can all collectively answer “Yes” with our actions, then we can

help achieve the educational level that Prof. Boorstin aspires to.

I congratulate everyone for participating in this gathering today.

A good morning to all.