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Behavioral finance bias is either based on faulty reasoning or emotions. Faulty reasoning is cured through better information and education. However, biases arising from emotions or feelings are hard to correct because they stem from the unconscious level such as impulses and intuitions. The following are few of the behavioral finance biases that need to be recognized and managed.

There is no doubt that Omicron has impeded most economic recovery efforts. Just in the past month alone, news agencies have reported that the COVID-19 variant has slowed business growth in the United Kingdom to its most glacial pace in a year and the International Monetary Fund has adjusted its global growth forecast to a modest 4.4 percent amidst higher inflation rates and positive case numbers worldwide. Here at home, the Philippine Statistics Authority has likewise downgraded its third-quarter gross domestic product (GDP) growth figure from 7.1 percent year-on-year to 6.9 percent.

Climate change, depletion of biodiversity, and waste management. All these have and continue to put a threat to human lives. These issues, more commonly referred to as environmental problems, bring global economies to come together and find the most appropriate course of action to combat or at least reverse the damage brought by these risks. To add, these risks and their adverse effects to the quality of human life today and in the future have given rise to the concept of intergenerational ethics, a sense of moral obligation to preserve the environment for future generations.

The year 2022 has so far had a rocky start, with the new year seemingly introducing new trials just as business owners and corporate leaders were getting steady on their feet in the “post-pandemic” climate. Including the recent surge, the total number of COVID-19 positive cases in the country has reached the 3 million mark. As a result, the government has placed more areas under Alert Level 3 classification, thereby placing operating capacity restrictions on more businesses across the country.

NEW year, renewed optimism. This was the perspective of most businesses toward the end of the 2021, with most expressing confidence that they could start embracing hybrid work arrangements for their workforces come 2022. The rosy outlook came at the heels of mass inoculation programs initiated by the government. In a Collier's report released in November last year, several employers stated that they were expecting a big chunk of their workforces to return to the office this year while others said they were set to adopt a mix of remote and on-site work setups.

The start of the year sees us at a rather confusing impasse regarding the COVID-19 situation. We find ourselves caught between Metro Manila’s return to stricter Alert Level 3 conditions, wherein businesses are only allowed to operate at 30% capacity, and surges brought about by the Omicron variant of the coronavirus and easing of restrictions over the holidays. These come on the heels of economists’ positive outlook of steady growth across Asia during the latter half of 2021 due to high vaccination rates, and business optimism recorded in the International Business Report (IBR), a survey conducted by Grant Thornton. It found that 80% of mid-market firms in the Philippines were optimistic about the country’s economic outlook for 2022. But with health experts cautioning that we might see peak positivity rates in the coming weeks, it is hard to say for sure where businesses will land this year.

They say seasons change, and so do we. This adage speaks volumes about turning over a new leaf, of seizing the right opportunity to improve and spur growth. In corporate talk, this means that as businesses prepare to wrap up the year on a positive note, it is but proper to look back, not just on the gains but also on hits and misses to harness lessons and be able to apply them in the coming year.

Most economic models have always used the assumption that businesses’ ultimate purpose is profit maximization. At the onset, these models have not considered that the purpose of a business was conceived out of an entrepreneur’s passion; hence, making profits a byproduct. Profit is an output and not the purpose of a business. Think of it this way, engineers make money, but their objective is to build economical yet safe infrastructures; doctors make money, but their pursuit is to heal; lawyers make money, but their mission is to serve justice; and, accountants make money, but their role is to ensure fair presentation of financial information and in the process, they protect business stakeholders’ interests.