Article from by David Penn

     JP Morgan’s performance in May and June has shown negative results as it slips into bear market territory. However, the company experiences a comeback this month, together with the entire U.S. stock market. This event would in turn be beneficial for the company as it increases the potentials of JP Morgan as a major industry player.

     In the Philippines, JP Morgan is one of the leading KPO companies in terms of finance and accounting. It is projected that the KPO industry is moving up to put up high-value services in outsourcing. With this, JP Morgan may lead in this effort to expand the industry especially in locations other than Metro Manila such as Cebu, which is now being considered as one of the top five outsourcing destinations in the world. Even though this would be a risky investment on the part of the company, the returns will be high if the necessary measures are implemented.

     As of 2010, the contribution of the entire BPO industry to the GDP of the Philippines is around 49%. If JP Morgan continues to have higher levels of productivity, through new investments, the company would possibly yield higher gross value added to the industry, therefore, significantly contributing to the growth rate of the country.

     Furthermore, when JP Morgan expands, it would demand for more labor force, therefore, giving more jobs to Filipinos and hopefully reducing the unemployment rate of 6.9% as of April 2012. In effect, this would spur the increase in private consumption spending that constitutes 54.3% of the GDP of the country as of the fourth quarter of 2011.

Candelaria, Crista Abegail
Gonzales, Leonard
Nepomuceno, Gian Josel
Parale, Veronica
Erica Yap
7/19/2012 10:05:15 pm

Hello there. I have read your news analysis and would like to share some of my comments.

In paragraph one, just because the stocks make a comeback it does not mean that it is immediately good or a turnaround for the company. The rally that led to an uptick may possibly be due to speculation or some other factors that may immediately be taken back later on. Do find out what caused the stock price to fall. (Hint: JP Morgan is currently under scrutiny over the Libor scandal).

Try to search for annual reports or letters to shareholders available from the firm's website or just google for news of expansion plans by the firm to support your comments in par. 2. Moreover, please clarify by what do you mean by 'risky investment'. In what way is it risky? There are different types of risks associated to investments. And as a risky investment, what does the firm stand to lose or gain.

In 3rd paragraph, are you sure the BPO contributes 49% of the country's GDP? Your data refers to the 2010 levels.The 2011/2012 data/estimates are already available.

For your last paragraph, I would appreciate some backing statistics such as their hiring rate in the Philippines over the years and some news about their expansion plans (if any) in the Philippines.

Good effort overall. One thing I learned when I did these news analysis as well is that just because the reporter wrote the article as such, it does not mean that everything should be taken as is. The writers are reporters, not economists.


Rachel Belandres
7/19/2012 10:49:34 pm

One important aspect of news analysis is the context. Statistics and data are essential in backing up your context and analysis. In building up your context, I suggest you should be familiar why a certain news is important. For example, why do you want to comment about finance and accounting KPOs? Do KPOs have a big percentage share in the whole BPO industry or is the industry growing at a fast pace? You are correct that the BPO industry in the Philippines should move into high value services, but why? You may answer this by comparing the BPO industries of India and Philippines. Also, why do you think JP Morgan is very important in the KPO industry? Does JP Morgan have a big percentage share of the total KPO industry? Also, why will JP Morgan expand to other provinces? To answer this, you may check the next wave cities for BPO. Also, how high would be the returns of JP Morgan in their investment? These questions of mine should answered with the support of data and statistics. Also, answering these questions would make the readers understand why is the news important.

For the third paragraph, I do not think BPO contributes to GDP at around 49% (it may be a typo, since it should be 4.9% as of 2010) For 2011, i think BPO comprises about 5-6% of GDP, since in 2010, revenues of BPO are about $9 billion and it surged to $11 billion in 2011.

For the fourth paragraph, I think you should first know by what percentage of the labor force does the whole BPO industry employ. You should take into consideration that the BPO industry hires only college graduates and hiring rate in the industry is only about 2%, which implies that only 2 out of 100 job applicants in the industry are hired. It is good that you presented unemployment data for the Philippines, but you need to determine the profile of those who are unemployed. Majority of the unemployed might be low-skilled workers, who might not be fit to be part of the BPO Industry.

Things you need to take into consideration in doing news analysis:
1.) Back up your statements with statistics and data
2.) Differentiate your opinions from that of the reporter. Refrain from repeating what the reporter has mentioned in the news. Just make a 1-2 sentence summary of the news and the rest of the analysis should be your own thoughts. This can help you apply the things you have learned from your economics subjects. :)

Good luck with your Research Seminar Class! :)

Rachel Belandres
7/19/2012 11:05:37 pm

Sorry kung mahaba yung comment ko. Haha! :)

Rachel Belandres
7/19/2012 11:17:52 pm

Sorry also for the typos and wrong tenses in my comment. :)

12/10/2013 12:03:26 pm

Thanks David Penn for created wonderful web blog on amazing subject.your article is so nice in reading.

4/15/2014 06:54:26 pm

very nice and informative blog ..thanx


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