Smart, rural banks ink deal on remittances
By Ted P. Torres
The Philippine Star 10/21/2005
Mobile phone leader Smart Communications Inc. has worked out a deal with the country’s rural banks for tie-ups in remittance and other electronic services.
Smart signed an agreement with service provider RuralNet, which earlier entered into a similar pact with the Rural Bankers Association of the Philippines (RBAP), to allow families of overseas Filipino workers (OFWs) to easily access remittances through rural banks.
Smart’s international and domestic roaming services as well as its e-commerce – SmartMoney and SmartPadala services – will be linked to the network of RuralNet as its dealer or reseller for cellphone loads.
Also through RuralNet, rural banks can offer loads and encashments for rural bank clients, particularly OFW families.
Smart vice president Ramon Isberto said the arrangement would allow the RBAP to offer remittance services through Smart Padala or its other electronic services.
"Through RuralNet as our electronic partner and RBAP members as the base of rural transactions, we can provide the convenience for the OFWs in both communications and remittance collections," Isberto said during RBAP’s 48th charter anniversary symposium yesterday.
Among these services is Smart Padala, an electronic platform for Smart Money, oftentimes called the electronic ATM and debit card.
Isberto said that they have more services not only for the remittance business but for other financial and non-financial services. "We are just waiting for RuralNet to roll out its network to the rural banks."
The Smart official assured that this electronic arrangement transaction is in compliance with the anti-money laundering regulations of the Bangko Sentral ng Pilipinas since it takes place over the banking system through Banco de Oro that handles the settlements.
Meanwhile, RuralNet chief executive officer Daniel Arcenas revealed that it targets to service exclusively all rural banks within the next two years. Rural bank clients could make payments and repayments or deal with government or private sector institutions through the network.
"We will be signing an agreement with the Philippine Overseas Employment Agency (POEA) and PhilHealth for the convenience of the bank clients of rural banks," Arcenas said.
Friday, March 31, 2006
Smart, rural banks ink deal on remittances
A culture of savings
This story was taken from www.inq7.net
http://news.inq7.net/opinion/index.php?index=2&story_id=24162
A culture of savings
First posted 11:37pm (Mla time) Jan 13, 2005
By Michael Tan
Inquirer News Service
SOME of you may have caught the "Probe" special on Channel 5 last week entitled "Pera," focusing on Filipino problems with financial management at the individual and household levels. One of the most dramatic examples featured in the documentary was a man working as a messenger with a monthly salary of about P7,800 who had run up P80,000 in credit card debts.
On a national level, the
I was interviewed for that "Probe" documentary, and I shared several insights on why we have this problem, which I thought of recapping in today's column, together with some additional insights.
Nothing to save?
The usual answer to why we save so little is that, given the level of poverty in the country, most households have nothing to save. So many of our people live hand-to-mouth, their earnings not even enough to cover basic expenses.
And yet, people will point out, too, that those with very low incomes still spend on non-essential items, like buying a DVD player and TV set, or cigarettes and alcohol, or as in the case of the messenger featured in the special, P20,000 for a party to celebrate his child's first birthday!
How do we explain this? That's where we get a host of other explanations, many of which cluster around the "culture of poverty" thesis. One variation on this thesis is that when you're poor, you live for today. Without hope of a better future, you spend whatever comes your way.
One of my friends calls this the "one-day millionaire" syndrome. I've seen it so many times, the most heartbreaking examples coming with many of our overseas workers, especially those who come home after working as entertainers in
Sharing our blessings?
Ironically, such behavior may actually come from our norm of sharing good fortune. Even the idea of the “pasalubong,” gifts you bring back from a trip, is a way of sharing your blessings. I recently had some debates with relatives over the lavish parties thrown for a one-year-old child and the explanation is that a child is God's blessing and we need to celebrate and share this blessing by hosting a grand affair.
I don't buy that argument completely. We all know these birthday parties are often intended more for the adults than for the child, a way of building alliances. In fact, lavish parties are the general norm, for children and for adults, and these are done more for social reasons than for anything else. We host the parties to build business and social links.
There's also something tribal in all this. In many societies, there is the "big man syndrome": a tribal leader is expected to sponsor big feasts from time to time as a way of redistributing his wealth as well as asserting his authority and influence. As cultural practices go, the "big man" and the elite get imitated by the lower strata of society and in the end, you have even the poor trying to outdo each other with extravagance. I've heard it time and time again, the concern that neighbors will talk if you hold too small a baptismal party for Junior.
Conspicuous consumption
The "big man feast" is only one of several historical hindrances that work against an ethic of saving in the
I've also wondered about the post-World War II era contributing to all this conspicuous consumption. Because we were wealthier that many other countries in the region, we were busy flying off to Hong Kong on weekends, holding lavish parties where champagne flowed from fountains (I am not kidding here), in other words, grand opulence. Other countries, in contrast, launched austerity campaigns, urging citizens to save and to patronize local products. We laughed at them, boasting of our imported goods.
Now, of course, those countries that practiced austerity are importing Filipinos to work for them and, in turn, our Filipino overseas workers spend their hard-earned money to buy other countries' goods.
We are now at an added disadvantage because not only did we skip an era of austerity, we leapfrogged into this 21st century of massive consumerism. We are told, "Buy! Buy! Buy!" and we are flooded with all kinds of goods, including fairly cheap ones with which to tempt the lower classes, from cell phones to DVD players. We also have liberal credit card policies, which allow even messengers to get one, and to rapidly rack up debts.
Reversing the trend
It's a dangerous situation we're in, and we better start thinking of strategies at home, in schools and in offices, to create what the Asian Development Bank calls a "culture of savings." (The ADB had a study noting how our overseas workers tend to spend their money on other countries' goods rather than plowing the money back into the
We have to start especially with children, the current crop being a generation exposed to a bewildering variety of consumer goods -- and advertising to push those goods. Schools can incorporate budgetary management into math classes. And we really should include credit card management in our college courses.
There's much we can do at home, with those children's parties, for example. I have nothing against celebrating birthdays, but let's reinvent these parties. My godchildren, Tess and Dennis Batangan, give birthday parties for their children but tell friends to bring toys to donate to indigent children.
When one of Doctors Delen and Boying de la Paz's sons asks why they can't get a newer cell phone model, they remind the kids: a cell phone is for communicating, do you really need the camera and the MP3 player?
Another couple working with me at the University of the
Last Christmas, many offices canceled their Christmas parties and donated the money instead to disaster relief. These are encouraging signs that we can build a culture of savings, linked as other important social values: compassion, foresight, mutual help.
We better move fast. Already I see dangerous new cultural beliefs emerging. On the "Probe" documentary, the messenger said he doesn't save because there's a belief now that by doing so, you actually invite financial emergencies like illnesses! The distorted reasoning: don't save, and you won't have the emergencies.
Why Are Filipinos Not Entrepreneurial?
Latest Philippines
5/5/2005
Why Are Filipinos Not Entrepreneurial?
I don’t like to play favorites, but from time to time I think Michael Tan is my favorite Inquirer columnist. His Pinoy Kasi articles are insightful and amusing, and really a pleasant break when you’re tired of hearing about politics.
Sometimes Mr. Tan writes about Filipino professional life. And one time, he made a reference to one of my posts in Offshoring Digest. I still have a bone to pick with Mr. Tan over something in that two-part article, but that might be something for another post.
Anyway Mr. Tan once talked about the Filipino tendency to mismanage budget, to blow our earnings in non-essential items. This trend is especially apparent among young BPO professionals, or our modern-day “yuppies.” Off the top of my head, I don’t think Starbucks ever enjoyed such a growth in loyal patronage before the call center boom.
A taxi driver recently shared a gripe with me over the lifestyle led by a lot of young BPO workers. He’d been in
What he said made me think of how so many young Filipino professionals take the high salary range offered by BPOs for granted, living like this sunshine industry will last forever. Much as I’d like to believe this really isn’t the case, since I know quite a few young people who help their families out by alloting part of their salaries to household expenses, I’ve also witnessed young people working in BPOs complaining about being penniless, so far off from the next payday.
Where does this spending attitude come from? Mr. Tan says it’s the cultural need to spend in order to build alliances, and to prove yourself the “big man.” But in the case of our BPO workers, I suspect there’s an additional factor. It’s the compulsion to strive for a quality life, the lure of a consumerist lifestyle. In school, the prevalent mindset is that if one wants to be able to buy expensive things (and one should want to buy expensive things, if only for the sake of tasting/experiencing them), one must strive to be a good worker: “When I have a job, I’ll work hard so I can buy what I want.” The end goal of working, then, is to be able to afford more non-essential things.
Saving to invest – or, even saving for the sake of saving – takes a backseat to saving for the sake of a short-term gratification. Putting up one’s own business is hardly a life goal; ask young BPO workers what they’d like to do later in life, and they might say they want to travel to a distant place, or they want to gain enough expertise to be able to work and reside in a developed nation.
First, I think we have to focus on creating a “culture of savings,” as Mr. Tan has said. Then, we can think about creating an entrepreneurial culture.
http://kalakalan.info/index.php?p=4
Wednesday, March 29, 2006
Faster remittances seen with thrift banks’ FCDUs
Manila Bulletin
March 26, 2006
Faster remittances seen with thrift banks’ FCDUs
By FIL C. SIONIL
The delivery of remittances to the beneficiaries of overseas Filipino workers (OFWs) in the countryside is expected to be fasttracked with the granting of FCDU (foreign currency deposit unit) license to rural bank, cooperative banks and thrift banks.
Chamber of Thrift Banks (CTB) Executive Director Suzanne Felix said the easing of the regulation in handling FCDU accounts by thrift banks through the reduction in capital base will allow member-banks in the countryside to channel resources to improve the quality of service.
This as market players believed that the relaxation is another one of those steps the monetary authorities are adopting to closely monitor the inflow and outflow of dollars in the country.
"This (referring to the relaxation of rules on FCDU) is a welcome move for the members," Felix commented.
Foreign currency dealers, on the other hand, foresaw the decision as "part of the monitoring process" of the Bangko Sentral ng Pilipinas (BSP), plug any loopholes in dollar inflow and outflow.
"It could, also, mean an improvement in the balance of payments position as net income receipts increase with the capture of dollar inflows in the countryside," a currency market player said.
The Monetary Board, the policy-making body of the BSP, last week relaxed the granting of FCDU license to rural banks and cooperative banks as well as brought down the capital requirements for thrift banks with FCDU operations to, among others, encourage the flow of foreign exchange into the banking system which can be channeled into productive economic activities.
For thrift banks, in particular, the authorities reduced the capital requirements for FCDU operations from P650 million and P150 million, to P325 million and P52 million for thrift banks with head offices in Metro Manila and those with head offices located outside Metro Manila, respectively.
Felix said the new regulation will not only ease the servicing of remittance, but, will, more Importantly, remove the financial burden for CTB-members to capital build-up their capital as earlier required by the regulators.
The BSP eased the capital requirement for an FCDU license, saying that capital adequacy ratio (CAR) of 12 percent, which is two percentage points higher than the 10 mandated, is considered equally effective in measuring the financial soundness of a bank-applicant.
It, too, is four percentage points more compared to the eight percent CAR required by the Bank for International Settlement.
With this Felix explained CTB-member banks wanting to have an FCDU license "will no longer worry about the capital build-up."
Prior to this, the authorities consider FCDU applications, on condition that banks must beef-up their capital base, though, on a staggered basis. "This will no longer be a concern," pointed out Felix.
According to the CTB director, member-banks that have started to build-up their capital, such as in the case of
Other requirement is a CAMELS rating of three. CAMELS is another barometer used by the authorities to gauge the financial soundness of a bank. It refers to capital adequacy asset qualitymanagement quality-earnings- liquidity-sensitivity to market risk. The highest CAMELS rating is five.
The regulators have agreed to give FCDU license to members of the Rural Bankers Association of the Philippines (RBAP) and co-op banks on condition that these institutions have a minimum networth of, at least, P20 million.
Also, the authorities will only consider giving an FCDU license to rural banks and thrift banks for as long as these institutions have no outstanding major supervisory concerns on safety and soundness from the last BSP annual examination.
The relaxation of the regulations on FCDU license for rural and thrift banks will give flexibility to OFWs and their beneficiaries an alternative to maintain a foreign currency deposit or exchange remittance proceeds through the banking system into a local currency.
More Pag-IBIG housing funds at lower rates
Manila Bulletin
March 26, 2006
More Pag-IBIG housing funds at lower rates
The Pag-IBIG Fund is earmarking more funds for housing financing this year and plans to lower interest rates on its enduser housing loan program.
This was revealed by Vice President Noli de Castro, concurrent chairman of the Housing and Urban Development Coordinating Council (HUDCC) and the Pag-IBIG Fund Board of Trustees, in his address during the 21st Oath-Taking Ceremony of the Realty Service Council of the Philippines (RESCOP).
According to De Castro, the Pag-IBIG Fund granted a total of R15.11 billion in end-user housing loans in 2005, "the highest retail lending disbursement in its history."
He added that the Fund was able to make this accomplishment even as it registered a net income of R7.4 billion, also a record for the 25-year-old government corporation.
This year, in anticipation of a boom in the real estate sector predicted by experts, Pag-IBIG is allocating R22.082 billion for its shelter finance program.
"In addition, Pag-IBIG is also seriously considering the lowering of interest rates for housing loans for the lower and middle income groups," De Castro disclosed.
Under the proposed scheme, Pag-IBIG intends to lower the interest rate from 10 percent to 9 percent for the R300,000 package.
The interest rate for the R180,000 package will be reduced from the current rate of 9 percent to 7 percent, while a new bracket will be created to cover housing packages priced between R500,000 to R750,000 with an interest rate of 11 percent.
Pag-IBIG President and CEO Romero S. Quimbo said that the planned adjustment in interest rates aims to encourage more members to avail of housing loans, and more developers to undertake projects for the low- to middle-income earners.
"Pag-IBIG Fund was created precisely to give its members the means to afford buying their own home. The Fund has been getting stronger and stronger in the last five years, and it only stands to reason that its growth should lead to greater benefits for our members. Having more affordable loans will surely be a big plus for them," Quimbo said.
Saturday, March 25, 2006
Gov't banks to float bonds overseas
this story was taken from www.inq7money.net
URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=03&dd=22&file=4
Gov't banks to float bonds overseas
Posted: 4:32 AM | Mar. 22, 2006
Doris C. Dumlao
Inquirer
STATE-OWNED Development Bank of the Philippines (DBP) and Land Bank of the
DBP intends to sell in April or May $130 million in hybrid instruments eligible as core, or tier 1, capital in the computation of capital adequacy ratios. This is the first time DBP will venture into the foreign capital market.
Land Bank plans to issue $100 million to $150 million worth of bonds for its supplementary, or tier 2, capital during the same period. This will be its first attempt in nine years to borrow from overseas markets.
Their charters restrict two government banks' capital-raising activities. The overseas bond sales would let them meet stricter requirements under the new International Accounting Standards and
DBP president Reynaldo David said US-based global rating agency Standard & Poor's was doing a due-diligence audit on the bank to rate its proposed hybrid bond float.
The offering, to be arranged by Barclays and Deutsche Bank, is still awaiting approval of the central bank and Department of Finance, he said.
Hybrid tier 1 capital instruments have equity-like features that make them acceptable as tier 1 capital. They may be in the form of unsecured subordinated debt or preferred shares with step-up feature.
This and its planned domestic fund-raising activity would raise DBP's capital adequacy ratio to 38 percent from 25 percent, David said.
The Department of Finance has approved Land Bank's plan to issue up to $150 million worth of subordinated debt maturing in five years.
"They removed the guarantees, and we want it that way because we want it as tier 2 capital," Land Bank president Gilda Pico said.
The bond issue will raise Land Bank's capital adequacy ratio to 17 percent from the present 12.8 percent.
Land Bank has mandated Deutsche Bank to manage its tier-2 issue.
Land Bank is the country's third biggest bank in assets (P310.45 billion) as of end-2005. DBP ranks seventh with assets of P210.6 billion. With INQ7.net
Wednesday, March 22, 2006
Gov't sets roadshows in US, Europe
Gov’t sets roadshows in US, Europe
Manila Bulletin
March 18, 2006
By DITAS LOPEZ
The Philippine government will hold investor meetings in the US and Europe next month to draw attention to the country’s improved economic and fiscal situation, a finance ministry official said Thursday.
The official, who is involved in the planned nondeal roadshow, told Dow Jones Newswires that the government won’t be marketing a global bond during the visit.
The roadshow will be held in
UBS will coordinate the European leg of the trip, while Citigroup will organize the
The roadshow provides a venue for the government to present developments on the fiscal and economic fronts. But it remains to be seen whether it will be a prelude to the sovereign’s next foray into international bond markets.
The Philippine government, one of the most prolific Asian issuers of US dollar bonds, raised .5 billion in 25-year bonds and EUR500 million in 10year bonds in January. It still needs to raise another 0 million to complete its planned borrowing of .1 billion from foreign commercial sources for the whole of 2006.
Last year, it raised .25 billion through three international bond sales.
On top of the central government’s requirements, state-owned National Power Corp. (NAP.YY), the Philippines’ main electricity producer, plans to raise at least 0 million for its financing need for this year.
The government held a non-deal roadshow in
Key officials on the US and European visit, to be led by Finance Secretary Margarito Teves, will update investors on the latest developments, including the full implementation of the expanded value added tax — the biggest revenuegenerating measure in a package of fiscal reforms intended to reduce the government’s budget deficit.
The government broadened the coverage of the VAT Nov. 1, and then raised the VAT rate to 12 percent Feb. 1 from 10 percent. The VAT reforms and other fiscal moves are expected to help the government narrow the budget deficit to a target P125 billion, or 2.1 percent of gross domestic product, this year. The government hopes to eventually balance the budget as early as 2008.
Ratings agencies Standard & Poor’s Corp. and Fitch Ratings revised their outlook on the country’s credit ratings to stable from negative following the VAT rate hike. S&P rates the Philippines BB- and Fitch BB.
But Moody’s Investors Service Inc. kept its negative outlook in place and said more reform is needed to bring down very high public-sector debt to a level that would prompt a change in outlook on the government’s B1 rating. (Dow Jones)
http://www.mb.com.ph/BSNS2006031858995.html
Saturday, March 18, 2006
The Philippines is not an agricultural economy
The
Posted: 2:57 AM | Jul. 01, 2005
Ernesto M. Ordoñez
Inquirer News Service
Published on page B6 of the July 01, 2005 issue of the Philippine Daily Inquirer
"ALTHOUGH many still think of the
This was according to former socioeconomic planning secretary Cielito Habito and Ateneo de Manila University economics professor Roehlano M. Briones, in a paper presented on June 27 at the "Workshop on Policies to Strengthen Productivity in the Philippines" at the Asian Institute of Management Conference Center in Makati City.
According to the paper, agriculture, fishery and forestry account for just 20 percent of the economy's gross domestic product (GDP).
Since services accounts for 45 percent of the GDP, and industry accounts for 35 percent, it is argued that we really have a services -- not an agricultural -- economy.
The importance of agriculture
However, we do have an agriculture-based economy. If we consider agro processing and agricultural inputs manufacturing, in addition to basic agricultural production, 70 percent of our jobs and 40 percent of our GDP come from agriculture, Dr. Bruce Tolentino said.
Habito and Briones cited the importance of agriculture in our overall economic development: "First, it provides food and vital raw materials for the rest of the economy; second, it provides a significant market for the non agricultural economy, as buyer of farm inputs as well as consumer goods and services produced in the non agricultural economy; and third, it releases surplus labor to the industry and the services sector."
Decreasing labor productivity
Yet in spite of agriculture's importance, our agricultural labor productivity is dismal compared to our neighboring countries.
In the same workshop, Professor Rolando Dy of the University of Asia and the Pacific presented the comparative labor productivity growth rates of five Asian countries as reported in the World Bank-World Development Report 2004.
Comparing the periods 1979-81 and 2000-02, the following were the growth rates:
We end up being the laggards with our growth not even reaching six percent.
There is some good news. In selected areas like bananas and pineapples, which are characterized through an agribusiness strategic approach using economies of scale, we are the leaders.
However, where there is a piecemeal approach with inadequate economies of scale such as in mangoes, we lag behind.
The table below shows information culled from the Food Agricultural Organization.
Agribusiness strategy
Comparing the banana and pineapple sectors with the mango sector, two significant differences are observed: an agribusiness strategy and economies of scale.
Ibarra Malonzo, president of the Kasanyangan Mindanao Foundation and a leader of the Alyansa Agrikultura [Agricultural Alliance], defined agribusiness strategy this way:
"It is applying science and technology to farming, and market solutions to agriculture. It involves organizing and managing the supply chain from production (farm machinery, seeds, breeds, technology, credit), to post harvest (dryers, silos, slaughterhouses, refrigerated vans), to manufacture (flour and feed mill, corn flake factories), to transport (ships, ports, trucks, and roll-on, roll-off vessels), and finally, marketing to deliver the goods to end-users or customers."
This agribusiness strategy is contained in the mango master plan developed in 2002 by the mango industry association and the Department of Agriculture.
But Renato Florencio, a mango industry leader who spearheaded the plan's formulation, says that much more government support is needed.
Economies of scale
Some argue that land reform will automatically decrease agricultural productivity. This is because economies of scale will be lost.
However, the banana and the pineapple lands were subjected to land reform, and their productivity further increased. This is because economies of scale can still be captured by consolidating the lands and having unified management. The same can also be done for mangoes and other agricultural products.
While several studies show land reform benefiting small farmers, there are several experiences where they are worse, rather than better, off. This is when the support services, previously provided by their former landowners, are withdrawn and not replaced by the government.
This is why the Alyansa Agrikultura, in a common agro-fishery agenda adopted by 39 national and local federations, advocates that land reform must always be accompanied by adequate support services. This will also make possible economies of scale.
More support
Though we do not have an agriculture economy in the strict sense, the fact that 70 percent of our labor force is directly dependent on agriculture should motivate us to give this sector the most importance in our economy. But the reverse has happened.
It is now critical that significantly more support be given to the twin thrusts of agribusiness strategy and economies of scale. Only then can we catch up with our Asian neighbors and regain our agricultural leadership in the region.
The author is chairman of Agriwatch, a private sector initiative; former Cabinet secretary for Presidential Flagship Programs and Projects, former undersecretary of agriculture, and former undersecretary of trade and industry. For inquiries and suggestions, e-mail agriwatchphil @ yahoo.com or call or fax +632 8516635.
Annual Productivity Growth from 1995-2004
| COUNTRY | Bananas | Pineapples | Mangoes |
| | 4.1 | (1.4) | 3.2 |
| | 1.2 | (3.7) | 4.3 |
| | 2.2 | 1.9 | (2.6) |
| | 3.2 | 7.8 | (0.1) |
| | (0.0) | (0.8) | 0.2 |
| | (1.3) | 2.0 | (4.4) |
Dollar falls sharply against euro
this story was taken from www.inq7money.net
URL: http://money.inq7.net/breakingnews/view_breakingnews.php?yyyy=2005&mon=09&dd=03&file=2
Dollar falls sharply against euro
Posted: 5:09 AM | Sept. 03, 2005
Agence France-Presse
The single European currency in late trade was at 1.2540 dollars against 1.2500 late Thursday in
The dollar was meanwhile trading at 109.71 yen after 109.78 on Thursday.
"A solid employment report that shows no sign of a retrenchment in hiring," was how Drew Matus, financial economist at Lehman Brothers, described an announcement of the Department of Labor.
Official figures from the department showed that non-farm payrolls increased by a seasonally adjusted 169,000 in August. Analysts had foreseen 190,000 new jobs in August.
The non-farms payroll figures showed the slowest rate of employment creation since May. But the Labor Department revised up the July figure strongly to 242,000 from 207,000 given previously.
Employment is up 1.43 million so far in 2005, an average of 178,000 per month.
Further details in the report showed that average hourly earnings increased by two cents or 0.1 percent to 16.16 dollars an hour.
That overall picture proved enough to persuade currency traders to pocket some of the gains made in their euro and pound trades against the dollar this week.
But analysts said sentiment remained against the
An emergency meeting between President George Bush and US Federal Reserve Chairman Alan Greenspan on Thursday fuelled market speculation that the central bank could halt its rate-rise campaign much sooner than expected.
Going by the Fed funds futures rate, there is only a 70 percent chance of a quarter point rate hike in the
Players are also starting to bet that US rates will go no higher than 3.75 percent. Previously hikes up to 4.00 percent or 4.25 percent had been expected.
The dollar was in the doldrums for much of the last couple of years, due to concerns over the financing of the
"There is plenty of speculation that the economic fallout from Katrina and more importantly, the coming oil price shock, will keep (Federal Reserve policymakers) from tightening when (they) meet on September 20," said Mark Austin, global head of Forex strategy at HSBC.
The euro was changing hands at 1.2540 dollars against 1.2500 late on Thursday in New York, 137.54 yen (137.25), 0.6815 pounds (0.6811) and 1.5406 Swiss francs (1.5422).
The dollar stood at 109.71 yen (109.78) and 1.2287 Swiss francs (1.2326).
The pound was being traded at 1.8402 dollars (1.8348), 201.81 yen (201.42) and 2.2607 Swiss francs (2.2639).
On the London Bullion Market, the price of an ounce of gold rose to 443.60 dollars from 439.60 late on Thursday.
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Save Yourself
Save Yourself
By: George S. Chua
January 13, 2005
Over the recent holiday season, I had a chance to attend a lot of parties meeting up with all sorts of people – relatives, friends, officemates, business associates, acquaintances and even strangers.
While everyone was politely in good disposition, practically everyone had some financial concern. I was quite surprised, actualy more disappointed, to find out that a lot of the people I meet hardly have any savings and worse, a significant number had no savings whatsoever and were actually in debt with their company, the SSS, PAG-IBIG, credit card companies, loan sharks, anyone that would be willing to lend them money and sometimes all of the above.
I am certainly not in the position to pass judgement on these people or how and why they got into their current predicament. However, I do not know that everyone needs to save up for their retirement if they want to stop working at some point in their lives, to provide a future for their children and cover emergencies. There are already enough private bankers around taking care of people making the big bucks so I wantto focus on the vast majority of Filipinos who are at the minimum wage range.
Most of you probably think that someone making the minimum wage could not possibly have anything left to save or even get out of debt. I would like to point out that this is not the case and the current 33 million Filipinos with cell phones will support my position. Fully 36% of our population has a cell phone and that would include maids and other household help that does not even make the official minimum wage.
Even if you are a minimum wage earner but you have the will to restrain yourself from the peer pressure of spending and you have the genuine desire to sacrifice now for a better future, there is no doubt in my mind that you can save yourself. If you have a cell phone, chances are that you are spending at least 10 pesos a day on it. Think of your life before you had a cell phone, you were able to manage. You can do it again.
Just imagine putting aside that 10 pesos daily cellphone money for a rainy day or saving 300 pesos a month. Assuming that you put the money in a time deposit with a bank earning a modest net interest of just 5% and just on rolling over the principal and interest, from the time you start working at say 20 years to the time you retire by 65, or working for 45 years, you would end up with 607,931.19 pesos.
Another tip is that whatever you save, you should pay off your loans with the highest interest rates first. It certainly does not make sense to keep saving in a time deposit 5% per annum while paying the interest on your credit card loan at 3.5% a month or 42% per annum, and that is without any penalties.
While 607,931.19 pesos may not seem to be much to show for 45 years of working in the salt mines, this is very conservative estmate. Chances are that if you are really serious about cutting down on non-essential expenses, and I mean just spending on those things that will keep you alive and your kids in school, you should be able to save more than 10 pesos a day, Of course you should limit the number of children you have to what your finances can afford, and I cannot over emphasize that this must be done at all costs! The good news is that as you have more money, there are more investment alternatives that wil provide a higher rate of return for the same amount of risk. I guess this is where the saying "the rich get richer and the poor get poorer" comes from. Given the choice, I would always choose rich, and I a sure you would too, even if you are too proud to admit it.
As an example, if you are able to set aside 20 pesos a day instead of just 10 pesos, and the net interest rate on your placement is 10% instead of 5% per annum, at the end of 45 yers you would have a whopping 6,289,501.03 pesos! Now we're talking! Alternatively, at this savings rate, it would only take you 22.58 years to rase 607,931.19 pesos, instead of 45 yrears. The critical thing in all of this is the consistency in setting aside that fixed amount and letting your money help you out by allowing it to earn interest on a compounded basis.
When should you start? You should have started the day you earned your first peso, but if you did not, all is not lost. You should just set aside more to allow you to catch up. Remember, a small amount may be too insignificant to save, but as we have shown, it does add up. If I am able to convince just one soul to save 10 pesos a day, all the time and effort it took to write this column is worth it. Then its up to you to save yourself.
EU okays P240m grant for exporters
Manila Standard Today
May 26, 2005
EU okays P240m grant for exporters
Watch out
The European
European Commission Ambassador Jan de Kok said the project, called Trade Related Technical Assistance, will greatly enhance the entry of Philippine products to the 25-nation bloc as well as help the
“This is really to help the
The technical assistance comes on the heels of the country’s failure to meet the May 31 deadline set by the World Trade Organization for a revised market access list under the Doha Development Agenda framework.
Aside from increasing the compliance of the Philippine government in meeting technical barriers to trade and sanitary phytosanitary controls set by the WTO, the multimillion project also aims to assist the country in its economic governance reforms.
“There was a request for this from the Department of Trade and Industry and Neda and we gladly responded to them because we also like the
The Philippine government will also give a counterpart amount of 420,000 euros (P28.8 million) for the project. Joyce Pangco Pañares
Roadshow plays up improvement in gov't finances
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Roadshow plays up improvement in gov't finances
Posted: 2:45 AM | Mar. 08, 2006
Michelle V. Remo
Inquirer
ECONOMIC officials left for
The officials will make the government's improving finances as their key selling point, Finance Secretary Margarito Teves said.
The roadshow followed the lifting last Friday of a state of national emergency that President Macapagal-Arroyo had declared exactly a week earlier to foil what it called a plot to topple her administration.
On Monday, the government announced that its budget deficit in January amounted to 15.4 billion, compared with the target maximum of P20.9 billion, with increased revenues and prudent spending.
The below-ceiling deficit kept the government on track of its goal of trimming down its full-year budget deficit to P125 billion from P146.5 billion in 2005. The government said the medium-term goal of a zero deficit in 2008 was within reach.
Teves said the roadshow would update potential investors on economic developments in the
Teves will do the roadshow with Trade and Industry Secretary Peter Favila and Deputy Governor Nestor Espenilla of the central bank.
The road show in
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Inflation rises to 7.6% in Feb
Inflation rises to 7.6% in Feb
By Des Ferriols
The Philippine Star 03/08/2006
The average inflation rate rose to 7.6 percent year-on-year in February, higher than the 6.7-percent level last January but still within the projected range for the period.
The National Statistics Office (NSO) pointed out that the increase in the value-added tax (VAT) had a relatively small impact on domestic prices as the surge was caused mainly by the rising prices of VAT-exempt goods such as food.
The Bangko Sentral ng Pilipinas (BSP) had originally projected the February inflation rate to be within the 7.6- to 7.9-percent range, factoring in what monetary officials called the "one-time" adjustment in prices due to the VAT.
The VAT adjustment became effective on Feb. 1, raising the tax on value added to all goods and services from 10 percent to 12 percent.
The BSP said that, as in previous months, pressures on inflation in February were linked mainly to movements in the prices of food and energy-related items.
"The inflation rate is well within our projected range, in fact it’s the low end," said BSP Governor Amando M. Tetangco Jr. "We don’t expect inflation rate to start decelerating until the second half of the year anyway."
According to the BSP, the rise in food prices accounted for 3.2 percentage points of the 7.6-percent inflation rate while transportation and communication services accounted for 1.4 percentage points. Fuel, light and water added another 1.2 percentage points.
Meanwhile, BSP officer-in-charge Diwa Guinigundo said year-on-year core inflation rose to 6.3 percent in February after continued deceleration over the past eleven months.
Core inflation reflects the movement of the prices in basic commodities excluding those with volatile prices such as food and energy-related items. The BSP uses this indicator to determine if second-round effects are beginning to be detectable enough to necessitate monetary action.
"But at this point, the BSP remains of the view that the two-percentage point increase in the VAT rate is not likely to lead to a sustained rise in inflation," Guinigundo said. "The impact consists mainly of a one-time increase in prices, rather than a long series of price increases."
Guinigundo said mitigating measures are in place against the impact of the VAT increase and this should prevent spiraling prices. These measures include the duty-free importation of basic commodities such as sugar and rice to regulate supply.
Other factors also point to an easing of price conditions in the near term, Guinigundo said, particularly the recent easing in international and local oil prices.
"Demand and credit indicators also continue to suggest limited demand-side pressures on prices, while domestic liquidity growth has been steadily slowing down," he added. The peso has also continued to strengthen against the US dollar, thus providing stability to import prices.
Guinigundo said the BSP still expects inflation to decelerate in the second half of the year as the impact of cost-side pressures tapers off. "Nevertheless, average inflation rate in 2006 may still exceed the government target of 4-5 percent," he said.
The BSP said it would watch out for potential risks to the inflation outlook, particularly the risk associated with imported oil prices given limited global surplus capacity.
Potential second-round effects and adverse shifts in inflation expectations continue to be key policy concerns, particularly adverse changes in wage- and price-setting behavior, the BSP said.
http://www.philstar.com/philstar/news200603080701.htm
Expenditure tracking surveys can fight corruption
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URL: http://money.inq7.net/features/view_features.php?yyyy=2005&mon=04&dd=11&file=2
Expenditure tracking surveys can fight corruption
Posted: 1:19 AM | Apr. 11, 2005
Dennis M. Arroyo
Inquirer News Service
A FEW years ago corruption in public education was so bad that school children gravely lacked textbooks. The ratio was one textbook shared by every four kids. So the teacher would have to waste time copying the pages from her textbook to the blackboard. Today there are various reforms in place, and textbooks are closely monitored by civic groups.
Learning from others
But the
The public system there lacked the basics and families were paying too much for tuition. So during the early 90s the government invested heavily on elementary education. Despite a three-fold increase in spending, the
Exposing leaks
To track the money, the government ran a survey, supported by the World Bank, over 250 schools. It was called the Public Expenditure Tracking Survey (PETS). The poll was meant to determine just how much public funds actually reached the public schools over 1991 to 1995. That way, the state could uncover bottlenecks, expose leaks, and measure the extent of the problem.
What did the survey reveal? In 1991, only a tiny two percent of the grant money for school kids actually reached the schools! In fact most schools got literally nothing. The government likewise found out that the schools and districts had gained financially by underreporting their enrollment.
Officials took action by arming the people with information. Budget allocation had to be made transparent.
Making fund data transparent
The state published every month the exact amounts of the funds transferred. These numbers were broadcast over radio and newspapers. It also required schools to post the funds they received on their bulletin boards.
Law makers enacted bills that protected accountability and the flow of information. Districts were ordered to deposit all their grants to school bank accounts. The authority to procure goods was delegated from the districts to the schools themselves.
Soaring to 90 percent
Results were dramatic. The grants per school child that actually reached the schools rose steeply: from 2 percent in 1991 to 26 percent in 1995, then to 90 percent in 1999. Ghost employees were slashed from the payroll: these 20,000 names accounted for 20 percent of the total number of teachers. Leakages were also plugged: in 1991, fully 97 percent of non-wage funds were lost. By 2001 this ratio fell to only 18 percent.
The reforms in accountability shaped policy at the highest levels of government. The President of Uganda decided to make universal primary education among his top priorities. So in 1996 he eliminated public school fees for up to four grade school children per family (two of the beneficiaries must be girls).
The striking moves done in education there can be replicated here in the
Copying the mechanism
First, use a public expenditure tracking survey to find out the extent of the fund leakages, the bottlenecks, and how they occur. Second, share the survey findings with the public via the media. That will slash the veil of secrecy. It's interesting that the Ugandan schools that had newspapers ended up getting more money than those with no access to the media.
Third, implement reforms that uphold transparency. For example, the funds allotted to the public schools should be published every month. The data should also be posted in bulletin boards. Fourth, set into place reforms in fund flows. In
Surveys that expose the flow of funds to the public glare will help plug the leakages from corruption.
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