Minimax and maximin of the minimum wage
Everybody wants a wage increase. Who wouldn't want more money to buy food, spend on education, travel to interesting places, and purchase gadgets, homes, and cars?
More is better.
However, when it comes to the minimum wage for the lowliest of workers, not everybody agrees.
In decision theory, which is used in game theory and even artificial intelligence, minimax is a rule for minimizing the maximum potential loss, while maximin is a rule for maximizing the minimum potential gain.
That's what our legislators and economic managers are doing right now -- looking for the minimax and maximin of the proposed minimum wage hike. In our article, "Can a minimum wage hike raise Filipinos' standard of living", we explore the ramifications of a proposal that will affect all of us and not just minimum wage earners.
We also published the second part of our income generation strategy series titled "Income Generation Strategy: Creating a portfolio of income-generating assets". We give you the checklist and the process here.
The last story, "The Radar Report: Extend duration amid rate cut expectations", lists our trade ideas for Philippine government securities, other sovereign bonds, and investment-grade corporate bonds.
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Metrobank Wealth Insights Team
Can a minimum wage hike raise Filipinos’ standard of living??
Many of us lament the fact that we can now buy fewer things with the money we have. For the rich, that’s just a phase they have to go through. For the poor, the impact is much more dire.
Inflation increased by 5.8% in 2022 and by 6.0% in 2023. Despite a slowdown in inflation at the beginning of 2024, rice, which is a basic staple for Filipino families, continues to become more costly. In fact, the most recent rice inflation of 23.7% in February 2024 is the highest in 20 years!
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Income Generation Strategy: Creating a portfolio of income-generating assets
In my previous article, I talked about what assets can generate income for you. This time, I will talk about the next logical question: How can I create and construct an investment portfolio of income-generating assets??
There is a simple process for that. In investment management, we use a set of principles as a guide for constructing a client’s investment portfolio. We look at the HERO: Horizon, Experience (of the investor), Risk appetite, and investment Objectives.
The Radar Report: Extend duration amid rate cut expectations
The Philippines is leading the pack in terms of economic growth in Asia in 2023. Inflation may be elevated and economic output may have slowed, but certain areas are brimming with potential, especially those on the priority list of the current administration.?
We still see 100 basis points of rate cuts by the Bangko Sentral ng Pilipinas as the US Federal Reserve is expected to cut rates by June. Although markets are shifting from aggressive rate cuts to 3 to 4 incremental cuts, we still believe that going for longer-duration bonds is still a prudent thing to do for now.
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