Just before dawn tomorrow (December 16th), millions of Filipinos will flock to their local churches to celebrate Simbang Gabi, the official beginning of the Christmas season. The celebration will continue until the Feast of Three Kings, also known as the Feast of Epiphany, on January 6th. After the 4 am morning mass, folks flock to the many impromptu stalls (tienda) which cluster around the churches to snack on bibingka and puto bombong (sweet rice cakes) and drink salabat (a throat-soothing ginger tea).

Of course, the celebration is much longer in the secular world. Disk jockeys started playing "Jingle Bells" and "Merry Little Christmas" in September, and the department stores launched holiday sales right after All Soul's day at the end of October. Indeed, the Makati Starbucks where I am drafting this Pearl features an exclusively yuletide sound track, with Bing's original version of "White Christmas" playing as I write this paragraph. At least it beats the high-volume muzac carol assault in the malls.

This weekend has particular significance in that Christians and Muslims are celebrating major religious events simultaneously. While the Catholics are trooping off to their Misos de Gallo (the aforementioned early morning masses), Muslims are celebrating the end of Ramadan and the breaking of fast. President Arroyo just declared Monday a national holiday in honor of the occasion, a historic first (which means another three-day weekend hampering the nation's productivity, but that's another story altogether). This weekend will feature various conciliatory sermons delivered by both Catholic and Islamic holy men dwelling on the importance of forgiveness, family values, and charitable good works... all good things...

With that seasonal intro, why don't I segue into a few random reflections on and reactions to current events as the holiday season unfolds?

One of the fascinating melodramas playing out these days involves the delicate tap dance between the Philippine and Malaysian governments over the fate of Nur Misuari, long-time leader of the MNLF and until recently governor of the Autonomous Region in Muslim Mindanao (ARMM). He lost out politically as his support eroded and GMA endorsed a rival candidate in the recent elections, deservedly so given his penchant for looting the rather substantial funds earmarked for development in his neck of the woods.

Apparently unable to handle the loss of the perks and under-the-table revenues inherent in his position, he returned to his guerilla ways with a vengeance on November 19 by leading 300 MNLF partisans in a blood-drenched uprising in Zamboanga and nearby Jolo island. Not being one to hang around the scene of the crime, he promptly split, only to be picked up by Malaysian police in Sabah. He was detained for illegal entry, a relatively minor offense in Malaysia, especially as compared to the charges of sedition and rebellion he would face if brought to trial in the Philippines. Given the clear cut nature of the events, one would think the mechanics of extradition should be fairly straightforward and that Mr. Misuari would soon be standing trial in a Philippines court.

One would have another think coming. The administration has been dragging its feet and has exhibited mixed feelings about pushing for extradition. The Mahathir administration would no doubt just as soon get rid of the political hot potato, and has already served notice that they can only hold him until December 24. Talk around town now is that Malacañang would rather he go into exile somewhere else lest his return here forment yet more violence down south. The GMA administration appears schizophrenic, perhaps reflecting pressure being applied from various interested parties, both domestic and interational. For example, the rumor mill has it that the Organization of Isalmic Conferences has weighed in with lobbying efforts urging leniency.

One might also note that Misuari was given a major Islamic title a couple of years ago ("Datu Panglima", if I remember correctly), making him essentially an honorary member of the Malaysian royal family. And to pose just two relevant questions: When was the last time a Muslim country extradited a Muslim leader to a Christian country? And doesn't it seem a coincidence that it is just this year that the Philippine government is closing the banks and government offices for Ramadan? Hmmm...

Meanwhile, the global recession is very real and the Philippines has suffered along with the rest of the region. However, most experts feel that the country's economy is not quite in the dire straits faced by some of its neighbors. Philippine GDP for January-September 2001 grew at 3.1%, bettering the negative growth rates of Singapore (-0.5%), Malaysia (-1.3%), and Taiwan (-2.4%). The problem is that when the international economy begins to recover, those economies are likely to take off at rates of 5-6% or more, as they have done before. Is the Philippines doomed to play the role of laggard yet again?

For whatever reason, the Philippine economy has a certain resilient streak, as reflected in the fact that it weathered the Asian meltdown in better shape than other ASEAN countries. The problem is that the country never quite seems to accelerate economically when things start looking up. This was acknowledged explicitly by Trade Secretary Mar Roxas in an interview the other day: "Throughout periods in our history where there was difficulty and challenge, our economy has always maintained its ability to float. However, it is also true that our economy is possibly not built for speed." Looks to me like somebody should locate a higher-powered engine?

One apparent bright spot is the just-announced deal involving Kirin Brewery Company Ltd.'s substantial buy-in to San Miguel Corporation (SMC). Specifically, half a billion dollars worth, representing 15% of the company. The Phisix (the Philippine Stock Exchange index) surged in response to the news as Chairman and CEO Danding Cojuangco posed for enthusiastic handshakes with Kirin President Koichiro Aramaki.

Some however, including insiders at Malacañang, see the whole thing as a blatant power grab by Danding to wrest control of SMC from the administration (the transaction will dilute the government's holdings to 37%). Cojuangco, who also controls the SMC Retirement Fund (which holds 6%), is obviously angling for leverage at the upcoming stockholders meeting early next year. The deal also happens to include a 5-year lock-up clause and gives Cojuango first option to buy the Kirin shares should they opt out at that time.

What else is new? It is the Philippines, after all. Anyway, half a billion is half a billion and, according to GMA, this is a major "shot in the arm" for the economy. We shall see.

As mentioned in recent Pearls (see Globalization Revisited and The Philippines Economy at Year-End 2001), my own evolving consulting business has led to an active involvement in the growing IT outsourcing industry, both on the ASP and call center side. No question about it - call centers are popping up like mushrooms all over the Philippines.

The rapid growth of the industry here is not at all surprising given the escalating global trend for companies to focus on their core competencies and outsource everything else, not to mention moving factors of production (which includes service) to lower cost locations. The Philippines has an excellent, English-speaking labor force and, according to some telecoms guru friends of mine, the broadband infrastructure here is now "rapidly approaching international standards." The country is poised to become a world leader in the customer service industry, aided and abetted by today's technology that makes geographical distance irrelevant.

Recognizing the value of the Philippine contact center proposition, fact-finding teams from major American firms are trooping through almost every week. Most of them are given a dog and pony here, to be followed by a similar show at their next stop, that being India. I plead guilty to having participated in a few such events (usually breakfast meets sponsored by AmCham), but am not sure if I am a dog or pony...

The other day I attended the coming out party of Contact Federation Philippines, an umbrella group that brings together most of the players in the rapidly growing industry. Known as Contact Philippines for short, you can check out their just-launched web site at www.contactph.org. The turnout for the first plenary session was huge, with most of the major call centers and many consultants, vendors, and government folks on hand. Although many of the participants are in direct or indirect competition with one another, they also have a shared interest in upgrading the industry and promoting the Philippines on the global stage. The window of opportunity is narrow and timing is everything. Hopefully, Contact Philippines will play a leading role in attracting investment and creating jobs for the country in the years to come.

BTW, the venue for the meeting was the brand spanking new HatchAsia Global City Center, a state-of-the-art IT building with high-end fiber optic facilities. e-PLDT has just signed a 10-year service contract with Teletech Holdings to set up a 500-seat facility in the building, and HatchAsia's CFO Dickson Co tells me they have prime space available with good broadband at reasonable rates. The location, in Fort Bonifacio, is convenient to both the Makati and Ortigas commercial business districts, but with a much more relaxed ambiance. (Interested parties can check it out at http://www.hatchasia.com/about/location_01.html).

Intriguing gossip item in the rags this morning about a big wedding last week hooking up Senator Tito Sotto's daughter with the scion of a rich Nueva Ecija clan at Forbes Park. There were no fewer than 17 ninongs and ninangs (sponsors, godparents) in attendance, including GMA and numerous politicians from both sides of the fence. GMA herself waltzed down the aisle arm-in-arm with Minority Leader Pimentel (who only last week was angrily calling for her to present herself before the Senate to answer concocted accusations of malfeasance). Most amazingly, there was Joker Arroyo escorting Senator Loi Ejercito, both parties of course smiling and ultra-courteous. One would never in a million years guess that Arroyo played such a key role in engineering the end of the Estrada administration.

Amazing country, you've got to admit.

Well, that's about all the Manila tsismis I have for now. Thanks to the growing band of loyal Pearl readers around the globe, and may you all have a peaceful and joyous holiday season and prosperous New Year to come.

Maligayang Pasko!