Not so fast. Before that, let us give you the background of our contest.
FinanceAsia.com posted a web-based survey predicting the Philippine peso’s closing price for November 30, 2000. We received 117 entries with 43% coming from Hong Kong, 33% from the Philippines, and 21% from Singapore. A few were from other Asian cities. Three percent were from Europe and 2% from the US.
The voting closed on November 10, 2000. At the time, the closing price of the peso at the Philippine Dealing System (PDS) was Ps50.200 to the US dollar. The weighted average was Ps49.661 as confirmed by Maximo Quinto of the Bankers Association of the Philippines.
The PDS is the country’s interbank currency dealing system.
We are all aware of the peso volatility due to Estrada’s impeachment articles, which was transmitted by the House of Representatives to the Philippine Senate on November 13, 2000, a colorful account of which was written by FinanceAsia on the same day.
The participants came from all walks of financial life: an associate from Allen & Overy in Hong Kong, a private banker from AIG in Switzerland, and for the fun of it, two senior officers from the Department of Finance of the Philippines.
Crazy bunch
But before taking the predictions of these people seriously, this is the same statistical universe which voted 33.33% for Britney Spears, 25.93% for Christina Aguillera, and 11.11% for Mandy Moore. Remember the question? We asked 'In the interest of reader psychographics, we ask this additional question. Who dances better (not singing)?'
Madonna, Jennifer Lopez, and Kylie Minogue got three votes each. Grace of Firehouse got two, and Demi Moore dancing in the movie Striptease got one. A smart aleck from DST International Hong Kong wrote his answer as “The girl I saw in the bar last night.”
Obstinate or illiterate?
While we wrote “Warning: Three decimal points please. Do not write the peso symbol. Just write numbers such as ‘51.350’ or ‘43.650’” there were still a few obstinate readers who insisted on inputting only two decimal places.
We use the term “obstinate” because to call this elite group “illiterate” would bring about absurd consequences given their current positions within their respective companies. This obstinate group of 14 included participants from Bank of America in Hong Kong, ABN Amro of London, Perennial Investments of Sydney, and JP Morgan of Singapore.
The reason for the three-decimal-places requirement, of course, is that the Philippine Dealing System against which our contest is referenced, officially reports currency transactions to three decimal places.
Predictions
The lowest guess was from a woman in Kuala Lumpur who ventured a guess of Ps27.925 to the US dollar. She probably meant Ps47.925; otherwise, she wins the award for the most optimistic person on the planet. But, of course, we need curative legislation to accept the latter interpretation.
Otherwise, the lowest guess was from a Deutsche Bank treasury marketing executive who wrote in Ps44.259.
The highest guess was from a treasury executive at Telstra in Sydney with a very pessimistic view of Ps63.715.
The mean guess was Ps50.853 while the median guess was Ps50.900. The standard deviation was 3.508. The confidence interval (with a 95% confidence) is from Ps50.209 to Ps51.497. Comparing this statistical summary to the actual closing price of the peso on November 30, 2000 should tell you how upwardly skewed the entire universe is.
Rules of court
Which brings us back to the contest at hand: What was the closing price of the peso at the PDS on November 30, 2000?
We at FinanceAsia pride ourselves in our resident expertise on the peso and the Philippines. We had the most comprehensive account of the biggest ever Manila bank failure in our July 2000 issue, and the most legally comprehensive account of Manila’s biggest ever tax evasion case in our October 2000 issue.
Given this expertise, we of course, realized early on that there can be no such closing price of the peso because November 30, 2000 was an official public holiday. That’s right. It was a holiday –Bonifacio Day – after the Filipino leader of the masses who led the revolution against the Spaniards sometime in 1890s.
We actually wanted to illustrate how commercial transactions that fall on holidays are handled in the Philippines. In this case, jurisprudence takes over.
Article 13 of the new Civil Code of the Philippines governs the interpretation of time. In the case of Gonzaga v. de David L-14858 December 29, 1960, if the obligation falls on a “Sunday or a legal holiday, it is understood that it should really be the next day, provided said day is neither Sunday or a legal holiday.”
Furthermore, the 1987 Rules of Court of the Philippines, Rule 22, Section 1 says: “How to compute time ... If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day.”
Alright, alright – we bungled it big time. Despite our Philippine expertise, we totally overlooked Bonifacio Day when devising the survey. We are expecting the courtesy resignation letter from our Philippine expert any day now.
The winners
So here we are using the next business day’s closing price: On December 1, 2000, the closing price of the US dollar at the PDS was Ps49.560. The weighted average was Ps49.590. This figure does not even fall within the 95% confidence interval band. The sample universe was too pessimistic. Again, the November 10 closing price was Ps50.200.
The closest predictions come from:
Third place: Hans Sicat, Director, Salomon Smith Barney, Philippines who thinks that Christina Aguillera is a superb dancer in addition to her singing talent. His prediction was Ps49.675 or a deviation of only 0.115 from the actual closing price.
Second place: Maria Esperanza Joven of All Asia Securities Management Corporation, Philippines who idolizes Britney Spears’ dancing skills. Her prediction was Ps49.567, which deviates by only 0.007 from the closing price.
And the winner is…
Just a moment. Unfortunately, we only give the award to the first place winner. Aside from having their companies and their names appear in a popular financial website – FinanceAsia.com – the two runners up will get free copies of our December 2000 issue. Note that the runners up are from the Philippines.
Before you turn these people into demigods, please remember they are part of the same group who spend their leisure hours watching Britney or Christina.
There were two guys who put in a guess of Ps49.55 (only two decimal places) and they get special mention as the two most obstinate guys: one is an analyst from Salomon Smith Barney in Hong Kong and the other is from Melbourne University.
By the way, our FinanceAsia peso guy took the plunge with a Ps50.875 prediction, off the mark by Ps1.315. The two Philippine Department of Finance executives predicted Ps51.361 and Ps51.115, respectively.
Finally, the winner of the Dom Perignon is: Jose Marcelo, Senior Vice President of First Metro Investment Corp, Philippines (a division of Metrobank, one the largest banks in the country), who likewise loves the dancing talent of Britney Spears. His prediction was Ps49.555 with a deviation of only 0.005.
Salud!
