PHILDEVFINANCE (old news): March 2011

Wednesday, March 30, 2011

PNB, Bank of China tie up in handling remittances

PNB, Bank of China tie up in handling remittances

Philippine National Bank (PNB), the country’s seventh largest bank in terms of assets, has signed an agreement with the Bank of China (BOC) in handling remittances of Chinese nationals who are based in Italy. PNB’s tie-up with BOC expands the market coverage PNB Italy SpA, which was established primarily to facilitate remittances of Filipinos who are in Italy.

PNB, acknowledging the significance of the signed deal, said that there are about 745,000 Chinese overseas contract workers in Italy at present and therefore the agreement a real expansion in their market. 2008 remittances to China reached $24 billion, according to data from World Bank.

In their agreement, remittances of Chinese nationals could be coursed through PNB who will in turn transfer the money to a BOC account, through the latter’s Manila office or any other bank accounts of the remitters’ beneficiaries.

Aside from its tie-up with BOC, PNB said it is still looking to establish more strategic partnership to expand its non-Filipino remittance business, particularly in Europe.

PNB claims to have the widest international footprint among local banks. It has a network comprising 110 branches, offices and subsidiaries spread across the Asia-Pacific region, North America, Europe and the Middle East.

Its remittances for 2008 reached about $2.6 billion, which accounts for 16 percent of total remittances handled by local banks. PNB ranked third in terms of remittance volume, competing aggressively with Banco de Oro and Bank of the Philippine Islands.

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Tuesday, March 29, 2011

BSP: Only certified banks can engage in microfinance

BSP: Only certified banks can engage in microfinance

MONDAY, 28 MARCH 2011 20:13 JUN VALLECERA / REPORTER

NOT just any bank may engage in the business of extending so-called micro loans to small borrowers as the privilege is and shall remain a regulated activity, the Bangko Sentral ng Pilipinas said on Monday.

Deputy BSP Gov. Nestor Espenilla Jr. stressed this point in the BSP’s latest communications to the banks in which he emphasized only those properly trained and documented may engage in it.

“This is to remind that only authorized banks are allowed to engage in the presentation, marketing, sale and servicing of microinsurance products,” Espenilla said.

According to him, banks may act as a microinsurance agent only from authorized insurance providers duly recognized by the Insurance Commission.

As agent, only those banks passing a qualifying exam and prescribed training course may engage in the business and the bank’s articles of incorporation must be amended to reflect this fact.

“In view of the latter requirement, applicant banks shall amend their articles of incorporation by including a secondary purpose of acting as a microinsurance agent and shall submit simultaneously the amended AOI to the appropriate BSP office and the Insurance Commission,” he said.

Only after the requirements have been complied with in full will the BSP issue its approval in the form of a “No Objection” notice.

“This ‘No Objection’ notice, together with other requirements, shall serve as the basis for the IC to issue the appropriate license to the applicant bank. However, the licensed bank shall submit the approved amended AOI on or before June 30, 2012; otherwise, the license shall no longer be renewed,” Espenilla stressed.

He also said the “unauthorized conduct of microinsurance as well as other insurance-related activities shall subject a bank and/or the responsible directors and/or officers of the bank to the applicable sanctions and/or penalties under existing banking laws, rules and regulations.”

The microinsurance program, which involves loans as small as P5,000 per borrower, is an important advocacy program started by then BSP Gov. Rafael Buenaventura that current BSP Gov. Amando M. Tetangco Jr. has conscientiously pursued.

It is a highly regulated activity mainly because it affects the financial welfare of small borrowers whose trust and confidence in the system forms the bedrock of banking, especially in the countryside.

GM Bank, Globe promote growth of SME sector

GM Bank, Globe promote growth of SME sector

Friday, March 25, 2011

AS IT continues to push its expansion this year, GM Bank is looking for ways to enhance the small and medium-sized enterprises' (SME) access to financing to support their growth.

Tomas S. Gomez IV, GM Bank president and chief executive officer, said access to investment funds is a critical challenge for SMEs anywhere in the world, most especially in the Philippines.

"Typically, collateral is a barrier. So we are investing in time and effort and resources in changing the way we provide financial resources or loan resources to SMEs. Such that by understanding them better, their strengths, the challenges that they face, we are able to provide superior financing products for their needs," Gomez said.

GM Bank is raising P40 million worth of Tier 1 capital and is increasing its branches this year. It has 35 branches today and operates in five provinces. It employs 700 people and GM Bank will continue to grow this year.

Given its expansion, to optimize its operations and serve its clients better GM Bank utilizes business solutions that have been customized to its specific needs.

The bank communicates with its employees through TxtConnect, a text broadcast service that could send messages to thousands of pre-registered recipients.

TxtConnect can be used not only to employees but also to customers to announce a sale, market new products, or send info to employees and save costs on calls.

It also uses the GCash platform for mobile banking so clients can do remittance, payments, text a deposit, and text a withdrawal using their Globe phones. All GM Bank employees receive all or a part of their salaries through GCash as well.

"Challenges to our business are all related to how to manage growth. Because when you are growing at a very fast clip year on year, there are challenges on how you maintain growth. There are many products and services that we are offering today that we will not be able to offer if we did not have the benefit of making the right investments in technology. It's not just the hardware, it's not just the software, it's also the communication link, it's also the people," Gomez said.

Gomez said making the right investments in technology does not necessarily entail purchasing it.

He said the best way is to partner with a technology solutions provider with the capability, such as Globe Business.

Globe Business, the enterprise, corporate and SME client servicing unit of Globe Telecom, provides solutions especially designed for SMEs that they customize suited to their specific requirements.

Published in the Sun.Star Davao newspaper on March 26, 2011.

Banks capitalizing on microinsurance

Banks capitalizing on microinsurance

THREE BANKS have applied for licenses while others have signified interest after the central bank allowed cooperative, rural and thrift banks to sell microinsurance.
“So far, there have only been three applicants but many are preparing to apply,” Bangko Sentral ng Pilipinas (BSP) Deputy Gov. Nestor A. Espenilla, Jr. said in a text message yesterday.He declined to identify the three banks.

The BSP issued Circular 683 on February 23, 2010 that allowed cooperative, rural and thrift banks to either sell microinsurance or serve as collection and payment agents.

The circular noted that the sale of microinsurance will complement banks’ microfinance business, and as such, microinsurance is considered a “financial product of an allied undertaking” under Section 20 of the General Banking Law.

The big banks, on the other hand, must have a 5% stake in insurance firms in order to engage in bancassurance or the sale of insurance within bank premises.

Circular 683 complemented issuances in 2010 by the Insurance Commission (IC), which set the regulatory framework for microinsurance and ordered informal insurance or insurance-like schemes to close.

The IC has since then set the performance standards that microinsurance providers must comply with and the guidelines for training programs for microinsurance agents.

On March 18, the BSP came out with Memorandum No. 2011-15 to remind banks that only those authorized “are allowed to engage in the presentation, marketing, sale and servicing of microinsurance products.”

“The memo to all banks is for the purpose of reminding and informing the banks of the Insurance Commission requirements before a bank can act as an agent for microinsurance,” Mr. Espenilla said.

According to the memo, banks must choose insurance providers authorized by the IC. They themselves must also be licensed by the IC, and for this, they need to attend a microinsurance training course, pass the test at the end of the course and amend their articles of incorporation.The amended articles of incorporation should be submitted to both the IC and the BSP.

But since it takes the BSP a long time to evaluate amended articles of incorporation, it will issue a “No Objection” notice to banks in the meantime when it sees they have no “serious supervisory concerns.”

The “No Objection” notice shall serve as basis for the IC to issue banks their licenses.

“Unauthorized conduct of microinsurance as well as other insurance-related activities shall subject a bank and/or responsible directors and/or officers of the bank to the applicable sanctions and/or penalties under existing banking laws, rules and regulations,” the memo further read.

In a telephone interview yesterday, Deputy Insurance Commissioner Vida T. Chiong said banks are required to undergo training to ensure their future clients will be protected. “There should be at least one employee to be trained,” Ms. Chiong said.

“Moreover, it should be spelled out in (banks’) articles of incorporation they are a micro-insurance agency. It is part of their business, otherwise they cannot engage in micro-insurance activities,” she added. -- ASOA

Monday, March 28, 2011

GOVERNMENT HOUSING AGENCY OFFERS TO BUY RESIDENTIAL LOANS RECEIVABLES FROM COOPERATIVES

saturday, march 26, 2011

GOVERNMENT HOUSING AGENCY OFFERS TO BUY RESIDENTIAL LOANS RECEIVABLES FROM COOPERATIVES

Cooperatives that grant housing loans to its members can now sell these loan mortgages/receivables to the National Home Mortgage Finance Corporation (NHMFC), it was announced by the government home financing agency.

This way, the cooperative gets fully paid for the housing loan granted to its member/s and it is relieved of the risk for the said loan exposure.

"The NHMFC has a 'Housing Loan Receivables Purchase Program' (HLRPP), wherein NHMFC buys loans/mortgages/receivables from originating institutions, such as housing developers; government financing institutions; banks; COOPERATIVES, and corporate employers, who have a housing program," according to the NHMFC's published notice.

The types of loans that can be purchased by NHMFC are Contracts to Sell (CTS), and real estate mortgages (REM).

"These financing institutions can take advantage of the existing services of NHMFC and minimize the risk that they incur in issuing loans.

"At the same time, the government can provide the adequate support in ensuring that there is security in the flow of funds in the economy. Hence, we can expect that there will be affordable financing support for housing to Filipinos given this setup," the NHMFC emphasized.

An institution engaged in secondary mortgage market operations, NHMFC , buys residential mortgages from the primary mortgage market, comprising of public or private institutions that grants residential loans.

By buying these mortgages or housing loan receivables from these institutions, NHMFC assumes the risk on these assets. It then issues bonds and other securities against the real estate mortgages and loan receivables that NHMFC bought and holds.

The 'Fast Facts', including the entire 'Guidelines on NHMFC's Housing Loan Receivables Purchase Program' may be viewed/downloaded at http://www.nhmfc.gov.ph (END)

Thrift banks post high growth

Thrift banks post high growth

WHILE THRIFT banks grew robustly in the past five years, the central bank said reforms are needed to make them stronger institutions.

“Deposits and loans of the thrift banking industry are at historic high levels,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said during his speech at the national convention of the Chamber of Thrift Banks (CTB) yesterday.

Consolidated deposits rose by 88% to P491 billion as of Dec. 2010 compared to Dec. 2005 while net loans increased by 87% to P345 billion during the same period.

Assets grew by 75% to a record-high P606 billion, while the industry’s capital rose by 47% to P66.8 billion, also a record-high.

“[These] figures are well and good,” Mr. Tetangco remarked.

“I believe the Philippine thrift banking industry will continue to contribute in keeping our economy on the growth track. I say this on the basis of its track record [for the past five years],” he added.

Mr. Tetangco, however, stressed that thrift banks need to continue pursuing reforms so they become better and stronger institutions.

He emphasized “total customer care commitment,” which is achieved through good governance and operating in a “safe and sound manner.”

“While our banking sector remains sound and stable, we should not be complacent. The market landscape continues to shift and change and so should we. And at all times, good governance will be the key to long-term sustainable growth,” Mr. Tetangco said.

In a bid to create stronger institutions, the central bank issued new rules on March 1 that raised the capital requirement for new thrift banks.

Thrift banks that locate their head offices in Metro Manila, for instance, must have a minimum capital requirement of P1 billion instead of P325 million while those in Cebu and Davao, are required to have P500 million instead of P52 million.

In response, CTB and HSBC Savings Bank (Philippines), Inc. President Patrick D. Cheng, in an interview with BusinessWorld said, “we want to maintain our growth path for the past five years.”

He said a “high” single-digit growth is achievable as a double-digit growth will be “difficult.”

Mr. Cheng said new thrift banks might find it hard to comply with the central banks’ new capitalization rules but the “CTB supports the new requirements as capital is the foundation of banks.”

CTB groups 54 of the country’s thrift banks. -- Ann Rozainne R. Gregorio

‘Unsound’ banking practices doomed BF—BSP

'Unsound' banking practices doomed BF—BSP

By Michelle Remo
Philippine Daily Inquirer

First Posted 16:03:00 03/27/2011

Filed Under: business, Banking, Central Banks
Most Read
MANILA, Philippines—The Bangko Sentral ng Pilipinas has accused officers of Banco Filipino Savings and Mortgage Bank (BF), which was recently placed under receivership, of mismanaging deposits of the public by using the money for unsound lending.

The BSP specifically said that more than half, or P2.2 billion, of its outstanding loans of P4 billion were those extended to its directors, officers, stockholders and related interests (DOSRI). "Related interests" are companies related to a bank.

The BSP also said that 91 percent of its outstanding loans had been past due as of September 2010.

Moreover, the central bank said spending by BF on salaries, benefits, and professional fees from 2000 to 2009 averaged at P597 million a year, more than twice its gross income of only P242.5 million.

Regulators said the "unsound" practices by the bank led to its failure.

"...BF mismanaged money entrusted to them by their depositors by its lavish spending and allowing loans to remain unpaid, including billions in overdue loans granted to its stockholders, officers and related companies," the central bank said in a statement issued Friday.

BF owes the central bank P4.4 billion in past due loans as of September 2010, according to the BSP. The loans were used to address its liquidity problems.

Prior to the release of the statement, BSP Deputy Governor Nestor Espenilla Jr. said the central bank was looking at potential cases it might file against officers of BF.

He said the central bank's legal team had been reviewing records of the bank to determine legal liabilities of its officers.

On March 17, the central bank placed BF under the receivership of Philippine Deposit Insurance Corp., three days after BF failed to service withdrawals of its clients.

Since then, PDIC has taken over BF's assets and liabilities, including deposit liabilities. PDIC said it has been expediting the process of validating deposit accounts so that valid deposit insurance claims would be settled soon.

Perfecto Yasay Jr., vice chairman of the BF, earlier protested the placement of the bank under receivership. He said the BSP was wrong in closing the bank, stressing that BF was not insolvent.

He said the bank had sufficient assets, which could very well serve the withdrawals of its clients if turned into cash.

Yasay blamed the BSP for not granting it an emergency loan, which could have temporarily addressed the lack of cash to service withdrawals of clients on the days prior to its placement under receivership.

Banco Filipino officers mismanaged P15-billion deposits - BSP

Banco Filipino officers mismanaged P15-billion deposits - BSP

By Lawrence Agcaoili (The Philippine Star)
Updated March 28, 2011 12:00 AM Comments (2)

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said officers of Banco Filipino Savings and Mortgage Bank mismanaged P15 billion worth of deposits resulting anew in the collapse and closure of the erstwhile biggest savings bank in the country.

The BSP said in a statement release over the weekend that officers of Banco Filipino engaged in unsafe and unsound banking practices by offering high interest rates, continued lavish spending, and leaving loans extended to stockholders, officers and related entities unpaid.

The central bank said Banco Filipino lured depositors with interest rates way above prevailing market rates by offering six percent to 13.9 percent for special savings deposits instead of the one percent to two percent offered by other banks.

This resulted in an average negative interest margin of P1 billion a year between 2007 and 2009 and Banco Filipino’s interest expense was higher than its interest income.

Banco Filipino managed to lure 177,652 depositors, more than half or 53 percent of whom have accounts with deposits below P5,000 each.

The BSP added that officers of Banco Filipino mismanaged the money entrusted to them by their depositors through continued lavish spending by paying an average P597 million a year between 2007 and 2009 for salaries, benefits, and professional fees or 2.5 times more than its average gross income of P242.5 million.

Furthermore, the BSP said Banco Filipino paid P245 million in legal fees last year of which P131 million was spent in the fourth quarter of 2010.

Both the BSP and Banco Filipino are embroiled in legal both in the lower courts as well as the Court of Appeals and even the Supreme Court. Banco Filipino has questioned the closure order issued by the old central bank against the bank in 1985.

Another unsafe and unsound banking practice of the bank, the BSP said involved the uncollected overdue loans to Banco Filipino directors, officers, stockholders, and their related interests (DOSRI) reaching P2.2 billion or more than half of the bank’s total loan portfolio.

The BSP added that 91 percent of the loans the bank granted were past due as of Sept. 10 last year.

The central bank also revealed that Banco Filipino owes the BSP about P4.4 billion in past due loans as of September last year as chunk of the beleaguered bank’s assets are losses that have been capitalized.

It added that Banco Filipino was no longer able to settle its obligations as they fall due prompting the BSP’s Monetary Board to order its closure and placed it under the receivership of the state-run Philippine Deposit Insurance Corp. (PDIC) last March 17.

As of March 15, the BSP said the Philippine Clearing House Corp. (PCHC) returned about P798 million worth of checks to Banco Filipino as it had insufficient balanced in its demand deposit account with the central bank.

The rising number of complaints from depositors due to the failure of Banco Filipino to open its 32 branches in Metro Manila and 30 branches in the provinces last March 15 prompted the BSP to order its closure last March 17.

BSP Deputy Governor Nestor Espenilla Jr. said earlier that the central bank decided to order the closure anew of Banco Filipino after its liabilities exceeded its assets by P8.4 billion.

The bank with a popular slogan “Subok na Matibay, Subok na Matatag” was founded in 1964 by Don Tomas Aguirre.

In its website, Banco Filipino claimed that it was ordered closed by the Central Bank in 1985 due to alleged insolvency despite the bank’s outstanding performance. As early as 1966, Banco Filipino emerged as the biggest savings bank in the country with 92 branches prior to its closure.

Saturday, March 26, 2011

Globe partners with Ericsson for mobile money services

Globe partners with Ericsson for mobile money services
By Mary Ann LL. Reyes (The Philippine Star)
Updated March 17, 2011 12:00 AM

MANILA, Philippines - Globe Telecom has reached a landmark partnership with Ericsson as it integrates its mobile commerce service GCash into the recently-launched Ericsson Money Services.

This makes Globe the Swedish techno-logy giant’s first partner worldwide for this innovative end-to-end mobile money solution.

The partnership is expected to further improve and expand access to GCash mobile money transfer services to more countries abroad. The Ericsson Money Interconnect Service is a platform that allows mobile money operators (MMO) and financial institutions around the world to send money instantly to a GCash wallet.

“The Ericsson Money Services and its Money Interconnect Service makes it a lot faster and easier for telcos and financial institutions to connect to GCash. It also opens up GCash to new corridors across the world and assures migrant workers of a better remittance service backed by one of the Philippines’ top corporations, Globe Telecom,” G-Xchange Inc. president Paolo Baltao said. GXI is Globe’s m-commerce subsidiary.

Meanwhile, Ericsson money services head Semir Mahjoub pointed out that they are proud to have this milestone partnership with Globe “as they are our first partner not only in the Philippines but in the whole world as well.”

“We’re excited to be working with GCash on this service as they have been a staunch advocate for the use of mobile money, especially to spur economic growth in areas with little to no access to banks and other financial institutions. The partnership reinforces both companies’ visions of playing a significant role in building a global mobile money ecosystem,” Mahjoub added.

With the GCash-Ericsson Money Services tie-up, the money sent from abroad is received on the GCash wallet and can be easily cashed out in over 9,000 accredited payout locations which include major partners like Villarica, Tambunting, Palawan and Prime Asia pawnshops, SM Department Stores, selected rural banks, and in over 9,000 ATMs nationwide.

GXI is a pillar in m-commerce and a fully-owned subsidiary of Globe. It pioneered the mobile commerce service GCash in October 2004. GCash is an internationally-acclaimed micro-payment service which transforms a mobile phone into a virtual wallet for secure, fast, and convenient money transfers at the speed and cost of a text message.

Since the GCash launch, GXI has established a wide network of local and international partners that include government agencies, utility companies, cooperatives, insurance companies, remittance companies, universities, and commercial establishments which have agreed to offer GCash services. GXI made a major breakthrough in being the first non-bank institution to launch a customizable ATM Card linked to a mobile wallet. The GCash card provides subscribers 24/7 access to over 9,000 ATMS in the Philippines.

Tuesday, March 22, 2011

Internet banking surges in southeast Asia

Internet banking surges in southeast Asia

Online banking sites in Southeast Asia saw a sharp rise in users last year, as institutions grew more Internet-savvy and customers got used to paying their bills on the web, research showed on Wednesday.

A survey by comScore found the number of visitors to online bank websites rose by double-digit figures over the 12 months from January 2010 in all six of the countries they looked at, including a 72 percent rise in Indonesia.

Malaysia had the biggest number of Internet banking customers, with 2.7 million in January 2011, according to the research conducted in Malaysia, Indonesia, Vietnam, the Philippines, Hong Kong and Singapore.

“Indonesia, Vietnam and Philippines have the highest percentage increases year-over-year as banks are now getting better at providing these online services,” said Joe Nguyen, vice president for comScore Southeast Asia.

Malaysia saw growth of 16 percent year-on-year from 2.4 million, while Hong Kong came in second in terms of user numbers, with 1.3 million in January 2010 rising to 1.5 million a year later — an 18 percent increase.

Next up was Singapore with 779,000 unique visitors in January 2010 rising to 889,000 a year later, a 14 percent rise.

Countries where the market is less developed saw the biggest percentage jumps, with Indonesian online banking users rising from 435,000 in January 2010 to 749,000 a year later, and those in the Philippines up 39 percent from 377,000 to 525,000 over the same period.

Users in Vietnam were up 35 percent from 701,000 to 949,000.

Despite the stellar growth numbers, Nguyen said online banking had a great deal of room to grow in Indonesia, Vietnam and the Philippines.

“All three markets still have relatively low usage reach relative to their population,” he said.

“We have seen online banking really take off when users can start paying for their utility, their phone bills online and all that stuff… so the difference between the top three markets and the bottom three markets are probably contributed (to) by this,” added Nguyen.

“So we expect this to grow as those services come into play in Vietnam, the Philippines and Indonesia.”

Banks with a strong local brand presence tended to be the most popular destinations, comScore found, with Maybank Group coming top in Malaysia, Vietcombank in Vietnam and DBS in Singapore.

Global banks HSBC and Citigroup also featured in the top destinations, the survey said.

– AFP

Philippine NGO (ASKI) opens branch in Singapore

Philippine NGO opens branch in Singapore
March 17, 2011, 1:40am

MANILA, Philippines – The Alalay Sa Kaunlaran Inc., a non-government organization based in Cabanatuan City, Nueva Ecija is now offering its products and services to overseas Filipino workers (OFWs) based in Singapore through ASKI Global Ltd. It is authorized by the Accounting and Corporate Regulatory Authority.

Rolando B. Victoria, executive director of ASKI Philippines and chair of the ASKI Global Ltd., said the organization recognizes the hard work of many OFWs in Singapore. This is why ASKI Global Ltd. would want to help them acquire an entrepreneurial mindset that would lead them to a productive, happy and wealthy family life.

“Our ultimate goal is to assist Filipinos in Singapore by giving them training courses that could help in their work, personal and strengthening of family values. The organization will also assist them in establishing their own business enterprises in the Philippines to provide additional source of income for their families, Victoria said.

According to the report of the Bangko Sentral ng Pilipinas, the total remittance of the OFWs worldwide reached to $18.76 billion last year.

The remittances largely came from Filipinos based in the United States, Saudi Arabia, United Kingdom, Japan, United Arab Emirates, Singapore, Italy, Germany, and Norway.

Benjamin Christian Arcebal, ASKI Global Ltd. training and microfinance officer said the result of the study they conducted in Singapore revealed that many of the OFWs remains to be poor and their remittances were used by their families to support their daily needs and were not placed on investments.

“Based on our study, some of these Filipinos were already working for 20 years in Singapore but nothing has happened to them and they don’t have enough savings. Many of them want to engage into business but they still need financial support. The entry point of ASKI Global is not really microfinance but more on giving them basic entrepreneurship training,” he said.

One of the programs being offered by ASKI Global Ltd. is the free training and education on entrepreneurship to enhance the potentials of the OFWs and unleash their entrepreneurial spirit.

It includes training on basic entrepreneurship for beginners and customized courses on specific businesses for those who have plans to start a business in the Philippines.

A one-on-one business coaching which ASKI Global also introduced is aimed at helping the OFWs create a business and marketing plans to ensure that the business will prosper and accelerate their profits.

Another program is the business for families, under this program the OFW will provide financial support to their preferred business. Their families on the other hand will be given assistance by the project officers of ASKI Philippines. It is important that they complement one another as to the kind of enterprise they want to set-up.

Meanwhile, the financial education and literacy program will guide them on how to handle their finances. Among the topics include, financial planning, forecasting and budgeting; savings and investing; and financial analysis.

This initiative is seen to directly benefit the OFWs and their families as they will be trained on business management in preparation for the enterprise that they will establish and operate. Likewise, value formation trainings will be conducted in the Philippines and in Singapore.

“One good thing about the program is we want to fast-track the reunification of the OFWs to their families. We want them to be with their families and give them hope that one day they will go back to the Philippines because they already have an established business,” Arcebal said.

PCCI gets 1st tranche of P24M SME dev’t fund

PCCI gets 1st tranche of P24M SME dev't fund
By Abigail L. Ho
Philippine Daily Inquirer
First Posted 21:01:00 03/21/2011

Filed Under: Small Business, agreements, business, Entrepreneurship
MANILA, Philippines—The Philippine Chamber of Commerce and Industry on Monday received P24 million in funding from Senator Francis Pangilinan for a project that aims to develop micro, small and medium enterprises, particularly in the provinces.

The fund turnover came after Monday's signing of a memorandum of agreement for the project, dubbed Promoting Regional Opportunities for Enterprise and Livelihood (Propel) Development.

Principal signatories to the agreement are Pangilinan, Trade Undersecretary Merly Cruz, PCCI president Francis Chua and PCCI board members Miguel Varela, Sergio Ortiz-Luis Jr., Francisco Floro, Antonio Keh, Apolinar Aure and Nelson Yuchongtian.

According to the PCCI, the first tranche of the project funding will be devoted to programs for bamboo farmers and entrepreneurs in Pampanga, start-ups and displaced overseas Filipino workers in Angeles City, OFWs and marginalized MSMEs in the National Capital Region, and One Town, One Product producers in Palawan and Rizal.

Propel Development is targeted to boost economic activities in 22 pilot provinces. The program was originally developed as part of the 2004-2010 Medium-Term Philippine Development Plan and 2004-2010 SME Development Plan.

The P24-million funding came from Pangilinan's priority development assistance fund.

Assistance to be given to identified beneficiaries in target areas include livelihood training and seminars, capability enhancement, product development and packaging, product branding systems and technology transfer.

Propel Development likewise aims to equip MSMEs with effective production and marketing techniques through proper management skills, innovative mechanisms for industry linkages for the development of supply and value chains, and information that will grant them access to financing.

The program is also designed to boost the service capabilities of business support organizations, such as local chambers and industry associations, as well as improve the policy environment for MSMEs.

WB sees long-term negative effects of Japan disaster on Phl

WB sees long-term negative effects of Japan disaster on Phl
By Ted P. Torres (The Philippine Star)
Updated March 22, 2011 12:00 AM

MANILA, Philippines - The impact of the disastrous earthquake and tsunami that recently hit Japan is not expected to affect the Philippine economy in the near term but its long-term effects is a cause for alarm, the World Bank said.

In its East Asia and Pacific Economic Update released yesterday, the World Bank said the areas to be strongly affected are trade, foreign direct investments, remittance and finance.

“China and the Philippines are more connected to developments in Japan than the rest of East Asia,” it said. “In the Philippines, electronics exports account for two-thirds of total exports.”

But for the meantime, the World Bank said it is sticking to its original forecast that the Philippine economy will grow by five percent this year and by 5.4 percent in 2012. The country’s gross domestic product (GDP) grew by 7.3 percent last year.

The consumer price index, which measures inflation, is expected to increase by 4.8 percent this year from 3.8 percent in 2010.

The World Bank said another concern that may alter their original forecasts for this year is the political turmoil in the Middle East and Northern Africa.

Global prices of oil are becoming extremely volatile and that has a major impact on the Philippine economy, being a net importer of crude and processed oil.

The World Bank report also expressed concern over the employment situation in the Philippines.

“The unemployment rate remains structurally high and growth continues to bypass many of the poor,” it said.

The unemployment rate stands at over seven percent while underemployment continues to affect one-fifth of the labor force.

Moreover, the latest official poverty data showed that an additional 3.3 million citizens became poor in the Philippines between 2003 and 2009, pushing the poverty headcount to 23 million from 30 million in 2003.

Meanwhile, inflation is expected to increase as global food and fuel supply shocks are returning, and that would push headline inflation outside of the target band, and possibly spill over into core inflation. “Monetary policy is projected to tighten gradually in the second half of 2011 as demand pressures are limited and inflation expectations remain with the Bangko Sentral ng Pilipinas (BSP) target band,” the report added.

The World Bank said while the Aquino administration is making headway in its revenue collection efforts, tax policy measures including reforms are needed.

“Key tax policy measures that would quickly raise revenues and improve social outcomes are increases in the excise tax rates of alcohol, tobacco and petroleum,” the report said. “Additional measures could include increasing the VAT (value-added-tax) rates and further broadening its base, possibly coupled with some reduction in the income tax rates.”

WB sees long-term negative effects of Japan disaster on Phl

WB sees long-term negative effects of Japan disaster on Phl

By Ted P. Torres (The Philippine Star)
Updated March 22, 2011 12:00 AM

MANILA, Philippines - The impact of the disastrous earthquake and tsunami that recently hit Japan is not expected to affect the Philippine economy in the near term but its long-term effects is a cause for alarm, the World Bank said.

In its East Asia and Pacific Economic Update released yesterday, the World Bank said the areas to be strongly affected are trade, foreign direct investments, remittance and finance.

“China and the Philippines are more connected to developments in Japan than the rest of East Asia,” it said. “In the Philippines, electronics exports account for two-thirds of total exports.”

But for the meantime, the World Bank said it is sticking to its original forecast that the Philippine economy will grow by five percent this year and by 5.4 percent in 2012. The country’s gross domestic product (GDP) grew by 7.3 percent last year.

The consumer price index, which measures inflation, is expected to increase by 4.8 percent this year from 3.8 percent in 2010.

The World Bank said another concern that may alter their original forecasts for this year is the political turmoil in the Middle East and Northern Africa.

Global prices of oil are becoming extremely volatile and that has a major impact on the Philippine economy, being a net importer of crude and processed oil.

The World Bank report also expressed concern over the employment situation in the Philippines.

“The unemployment rate remains structurally high and growth continues to bypass many of the poor,” it said.

The unemployment rate stands at over seven percent while underemployment continues to affect one-fifth of the labor force.

Moreover, the latest official poverty data showed that an additional 3.3 million citizens became poor in the Philippines between 2003 and 2009, pushing the poverty headcount to 23 million from 30 million in 2003.

Meanwhile, inflation is expected to increase as global food and fuel supply shocks are returning, and that would push headline inflation outside of the target band, and possibly spill over into core inflation. “Monetary policy is projected to tighten gradually in the second half of 2011 as demand pressures are limited and inflation expectations remain with the Bangko Sentral ng Pilipinas (BSP) target band,” the report added.

The World Bank said while the Aquino administration is making headway in its revenue collection efforts, tax policy measures including reforms are needed.

“Key tax policy measures that would quickly raise revenues and improve social outcomes are increases in the excise tax rates of alcohol, tobacco and petroleum,” the report said. “Additional measures could include increasing the VAT (value-added-tax) rates and further broadening its base, possibly coupled with some reduction in the income tax rates.”

Monday, March 21, 2011

Banking system sound & stable - BSP

Banking system sound & stable - BSP
By Lawrence Agcaoili (The Philippine Star)
Updated March 21, 2011 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said over the weekend that the country’s banking industry remains sound and stable despite the closure of insolvent Banco Filipino Savings and Mortgage Bank last week.

BSP Governor Amando M. Tetangco Jr. said monetary authorities have not monitored any negative impact on the banking industry since Banco Filipino was ordered closed by the central bank’s Monetary Board last March 17.

“As we said in our statement, the banking system remains sound and stable. We have not observed any negative impact on the rest of the banking system,” Tetangco stressed.

Monetary authorities believe that 2010 was a banner year for Philippine banks contributing largely to the country’s stronger-than-expected economic growth.

The lending, deposits, and profitability of banks posted healthy growth rates in 2010. The total assets of the banking system rose by 7.2 percent to P6.7 trillion as of end-September last year from P6.2 trillion as of end-September of 2009. Bank deposits went up by 9.8 percent to P5.1 trillion last year while banks loans posted a double-digit growth of 11 percent to P2.314 trillion as of January.

On the other hand, the income of Philippine banks doubled to about P41.1 billion as of end-June last year from P20.5 billion as of end-June in 2009.

The BSP said the banking system posted a capital adequacy ratio of 15.23 percent on solo basis and 16.21 percent on consolidated basis as of end-June last year. The ratio was well above the 10 percent minimum requirement of the BSP and the 8 percent standard ratio of the Basel Accord.

The BSP believes that the implementation of tighter capitalization standards for major players in the banking industry under BSP Circular 639 or the implementing regulation on the International Capital Adequacy Assessment Process (ICAAP) this year would further strengthen the country’s financial sector.

Furthermore, the central bank has also raised the minimum capital requirement for new entrants in the banking industry to boost their competitiveness and further strengthen the country’s banking system.

The BSP recently raised the minimum capital requirement for thrift banks to P1 billion from P325 million for those with head offices located in Metro Manila and to P500 million from P52 million for those with head offices in Cebu and Davao. Furthermore, the minimum capital requirement for thrift banks in other areas was likewise raised to P250 million from P52 million.

The higher minimum capital requirement would be imposed on new thrift banks as well as those converting their existing bank to a thrift bank and those relocating their head office in areas of higher classification.

Last November, the BSP raised the minimum capital requirement for rural banks by 53 percent to as much as 285 percent. The last time the required minimum capital for rural banks was increased was way back in December 1999.

The BSP raised the minimum capital requirement for rural banks with head offices in Metro Manila to P100 million from the current level of P26 million while the capital requirement for rural banks in the cities of Cebu and Davao was increased to P50 million from P13 million.

On the other, the minimum capital requirement for rural banks in the first to fourth class municipalities was raised to P10 million from P6.5 million followed by the fifth to sixth class municipalities was increased to P5 million from the existing P2.6 million.

Prior to the decision of the Monetary Board, the BSP imposed a minimum capital requirement of P6.5 million for rural banks located in first to third class cities and first class municipalities as well as P3.9 million for banks located in fourth to sixth class cities and second to fourth class municipalities.

Latest data showed that the number of banks operating in the Philippines were reduced by 33 in the first nine months of last year on the back of the continued consolidation of major players in the industry as well as the closure of problematic banks.

Data released by the central bank showed that the number of banks stood at 764 as of end-September last year from 797 as of end-September in 2009 and nine banks fewer that the end-June number of 773 due to mergers and consolidations as well as the exit of weaker players in the banking system.

On the other hand, the number of universal and commercial banks was steady at 38 while the number of thrift banks was also unchanged at 73. The number of rural banks fell to 661 from January to September last year compared to 653 in the first nine months of last year from 686 in the same period in 2009 due primarily to the closure of weaker banks.

The BSP reported that the number of branches of universal and commercial banks, thrift banks, and rural banks increased by 176 to 8,740 in the first nine months of last year from 8,564 in the same period in 2009.

“Subok na matibay, Subok na matatag” no more

Banco Filipino with a popular slogan “Subok na Matibay, Subok na Matatag” was finally ordered closed by the BSP last March 17 after it failed to reopen for three straight days as the liabilities of the bank owned Aguirre family overwhelmed its assets by P8.4 billion. It was placed under the receivership of the PDIC as monetary authorities to prepare charges against the board of directors and officials of the beleaguered bank.

BSP Deputy Governor Nestor Espenilla Jr. said the central bank’s seven-man Monetary Board decided to place Banco Filipino under PDIC receivership as examinations found that it has insufficient realizable assets to meet its liabilities after the bank’s net realizable value reached —P8.4 billion meaning its liabilities are bigger than its assets.

“Banco Filipino cannot continue in business without involving probable losses to its depositors and creditors,” Espenilla stressed.

He explained that the policy setting body of the BSP also took note of the failure of the board of directors and managerment of Banco Filipino to restore its financial health and viability despite considerable time given to address its financial problems.

The BSP extended P3.5 billion worth of emergency loan to Banco Filipino in 2002 of which P2.6 billion are still outstanding.

The decision, according to him, would provide immediate relief to the 177,652 depositors of Banco Filipino.

Furthermore, Espenilla said the Monetary Board authorized the filing of appropriate cases against directors, officers, and other individuals who may be found liable for violation of banking laws and the BSP rules and regulations.

He revealed that bank examiners found out that Banco Filipino has been posting losses averaging P2 billion a year from 2007 to 2009. The figure mounted to about a monthly loss of P277 million in the first nine months of last year.

Aside from interest payments amounting to P1 billion a year, Espenilla said Banco Filipino has been incurring huge expenses after it paid compensation of P500 million or 2.5 times its gross income and legal fees amounting to P131 million in the fourth quarter alone. “Their expenses are way above industry levels,” he stressed.

Furthermore, he added that more than half of its outstanding loans amounting to P4.1 billion of Banco Filipino were extended to entities of directors, officer, stockholders and related interest (DOSRI).

On the other hand, PDIC executive vice president Cristina Orbeta said the government-owned insurer would pay P9.4 billion worth of deposit claims of Banco Filipino out of its Deposit Insurance Found (DIF) amounting to P64.6 billion. BSP data showed that the deposit base of Banco Filipino dropped to P15 billion as of March 15 from about P17 billion as of end-December.

PDIC assured that about 97 percent of the total deposit accounts of the closed bank are fully insured by the maximum coverage of P500,000. Banco Filipino has 177,652 deposit accounts.

The PDIC official said the agency would fasttrack the payment of deposits with balances of P5,000 and below that make up 53 percent of total accounts.

“We target to start payment for depositors with accounts of P5,000 and below with no outstanding loans and whose addresses are current in the bank records, a week after take over. These depositors need not file claims. We shall mail payment directly to them via registered mail,” she added.

According to her,PDIC would send postal money order (PMO) that could be encashed at any of the over 1,400 post offices and over 300 branches of Land Bank of the Philippines nationwide.

On the other hand, depositors with balances of P5,000 and below who have outstanding loans or whose addresses are not updated as well as depositors with balances above P5,000 need to file claims.

The PDIC will hold Depositors Forums starting this week to explain procedures and requirements on filing claims and answer depositors’ queries.

She also reminded borrowers of Banco Filipino to settle their outstanding loans to authorized PDIC deputies or designated PDIC accounts with the Philippine National Bank (PNB).

Orbeta told reporters that PDIC personnel have been deployed to the 62 banking units of Banco Filipino nationwide to gather and preserve the bank’s records and assets, preparatory to examination so that the claims servicing process may start.

Banco Filipino to contest closure

Banco Filipino vice chairman and former Securities and Exchange Commission chairman Perfecto Yasay Jr. vowed to contest the closure of the “asset rich” bank and threatened to haul BSP officials to court.

Yasay said the bank was not insolvent as it has assets amounting to over P25 billion. The bank was founded in 1964 by Don Tomas Aguirre and now has 32 branches in Metro Manila and nearby areas as well as 30 branches in the provinces.

In its website, Banco Filipino claimed that it was ordered closed by the Central Bank in 1985 due to alleged insolvency despite the bank’s outstanding performance. As early as 1966, Banco Filipino emerged as the biggest savings bank in the country with 92 branches prior to its closure.

In 1994, the bank opened 15 of its 92 branches and has now 62 branches nationwide. About 740 employees of Banco Filipinos are about to lose their jobs.

As early as March 15, several branches of Banco Filipino were closed after its officials announced that it was “suffering from extraordinary panic caused by a well orchestrated smear campaign quoting BSP as the source of inaccurate and malicious imputations.

“As you are all aware, we have been suffering from extraordinary panic caused by a well orchestrated smear campaign quoting BSP as the source of inaccurate and malicious imputations,” Banco Filipino executive vice president Maxy Abad stated in the memo dated March 14.

Abad said the bank is exhausting all efforts to protect its depositors by asking the BSP to stave off the heavy withdrawals by denying the derogatory news articles attributed to them and by providing emergency loan assistance after submitting sufficient collateral.

“Despite the urgency of all these requests, we have not received any official work from the BSP Monetary Board on the action they have taken, if any. Furthermore, we have also reiterated the immediate implementation of the approved business plan as ordered by the Makati regional trial court,” the bank official said.

He reiterated that the lower court in Makati has issued an order prohibiting the BSP, its officials, agents, and any persons acting for and in their behalf from committing any act prejudicial to the operation of the bank

Banco Filipino has been seeking P25 billion worth of financial assistance and P19 billion in damages as compensation for its alleged illegal closure of the bank in 1985.

The Makati RTC issued an order in November 18, 2009 directing the BSP and the Monetary Board to immediately implement Banco Filipino’s approved business plan. The court directed the BSP and the policy setting body to release the bank’s financial assistance and package of regulatory relief without delay.

Likewise, the Supreme Court also affirmed a decision by the Court of Appeals (CA) ordering the RTC to proceed with the trial of the P18.8-billion damage suits filed by Banco Filipino against the Central Bank Board of Liquidators (CBBoL) in connection with the bank’s illegal closure in 1985.

Yasay has accused the BSP of oppressive and arbitrary action despite the ruling made by the Supreme Court that the closure order of the old Central Bank in 1985 as illegal.

NEW TAX EXEMPTIONS FOR EMPLOYEES,

COOPERATIVES, AS EMPLOYERS, MUST TAKE NOTE OF NEW TAX EXEMPTIONS FOR THEIR EMPLOYEES, GRANTED UNDER BIR R.R. NO. 5-2011, DATED MARCH 16, 2011

When the topic of providing additional benefits to their employees is taken up, cooperatives sometimes find it difficult to decide.

Will the benefit be in the form of increased allowances; raise in basic pay; allowances for uniform, medical, hospitalization, for sustenance, like for rice or groceries, etc. Among the concerns is that the benefits are considered part of the employees' total compensations and are thus, taxable.

Sometimes, the money value of the salary increase, for example, only brings the employee to a higher tax bracket and the increase goes only to the payment of the higher tax. It thus, defeats the purpose of the added benefits or salary adjustments.

It is a welcome move that the Bureau of Internal Revenue (BIR) recently expanded the coverage of employee benefits that are not subject to income tax and thus, not subject to withholding tax. These benefits covered shall apply to income earned starting this year 2011.

It issued Revenue Regulations No. 5-2011, dated March 16, 2011.

Under the regulations, the following benefits are not subject to income tax, nor to withholding tax on compensation income of both managerial and rank-and-file employees:

a) Monetized unused vacation leave credits of private employees not exceeding ten (10) days during the year;

b) Monetized value of vacation and sick leave credits paid to government officials and employees;

c) Medical cash allowance to dependents of employees, not exceeding P750 per employee per semester or P125 per month;

d) Rice subsidy of P1,500 or one sack of 50 kg. rice per month amounting to not more than P1,500;

e) Uniform and clothing allowance not exceeding P4,000 per annum;

f) Actual medical allowance, e.g. medical allowance to cover medical and health care needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding P10,000.00 per annum;

g) Laundry allowance not exceeding P300 per month;

h) Employees achievement awards, e.g. for length of service or safety achievement, which must be in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;

i) Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum;

j) Daily meal allowance for overtime work and night/graveyard shift not exceeding twenty-five percent (25%) of the basic minimum wage on a per region basis.

We are sure that many employees will be benefited by this. We can only hope that officers of cooperatives will be guided accordingly. Revenue Regulations 5-2011 can be downloaded at www. bir.gov.ph (END)

Govt sets rice tender for small farmer cooperatives

Govt sets rice tender for small farmer cooperatives

THE government will start its tender for the importation of rice allocated for small farmer cooperatives as early as March 28, the Bids and Awards Committee (BAC) said on Friday.

Atty. Gilberto Lauengco, spokesperson of the BAC, said they will publish in major newspapers by March 21 the invitation to bid for the 60,000 metric tons (MT) of rice to be imported by small farmer cooperatives.

“By Monday, March 21, we will publish the invitation to bid and by Wednesday we will release the bidding instruction to all interested farmers organizations. The bidding process will start seven days after,” Lauengco said.

He said the Department of Agriculture expects no delay in the auction for the 600,000 MT of rice imports, despite appeals by the private sector to postpone the bidding process by at least another week.

“Should they fail to pass all the requirements, we can have a second bidding immediately. But right now, we don’t expect any delays,” he added.

James Konstantin Galvez

SEC suspends operations of three financing firms

SEC suspends operations of three financing firms

THE Securities and Exchange Commission (SEC) has suspended the certificate of authority to operate of three financing firms for failure to comply with reportorial requirements as well as to pay fees and penalties.

Documents from the SEC showed that it has suspended A.M. Creditworld Finance Corp., Golden Endeavor Microfinance Corp. and Belledone Financing Corp. for a period of 60 days from receipt of the order or until they have submitted their reports and paid the fees and penalties.

AM Creditworld, Golden Endeavor, and Belledone are required to pay the maximum penalty of P100,000 for the late and non-submission of their reports.

Golden Endeavor appealed to the SEC Baguio Extension Office to condone or reduce the prescribed penalties, but the regulator denied its petition.

After the lapse of the suspension period without compliance by the companies, the commission said it will immediately initiate proceedings for the revocation of their certificates of authority.

The three firms have continuously failed to respond to any of the letters and orders and notice of suspension, the SEC said.

Krista Angela M. Montealegre

Sunday, March 20, 2011

RCBC eyes unbanked sector

Posted on March 20, 2011 09:25:17 PM

RCBC eyes unbanked sector

RIZAL Commercial Banking Corp. (RCBC), the country’s fifth largest bank, seeks to cover more of the country’s “unbanked” sector by forging more partnerships with merchants for its MyWallet prepaid card.

“[Creating partnerships] with big merchants was part of our plans in 2007. When we introduced the MyWallet card that year, we targeted to tie up with merchants to build up our customer base for the MyWallet card product and to tap the country’s unbanked segment,” said Ismael R. Sandig, RCBC executive vice president and retail banking group head, in a phone interview with BusinessWorld.

He said RCBC has issued 1.3 million MyWallet cards since these were launched and targets 3 million cards by the end of this year.

The RCBC MyWallet card is a prepaid card that allows the cardholder to withdraw cash from ATMs, pay for purchases and pay for bills.

Unlike a debit card, which is a payment card linked to the cardholder’s bank account, a prepaid card is not linked to a bank account. A prepaid card, therefore,does not require the cardholder to open an account in the issuing bank but has to be reloaded so the cardholder can continue to make purchases.

A prepaid card should work well with the unbanked -- those without access to formal financial services -- who may hesitate to enter a bank or use its services.

Three out of four Filipinos belong to the ranks of the unbanked.

The MyWallet card does not require any maintaining balance, and may be loaded up to P100,000 per month. RCBC does not impose any penalties if a cardholder uses up all of his or her stored cash.

“The only way to service the nonbank segment is to have a prepaid card that is affordable for them and requires no maintaining balance,” Mr. Sandig said.

To be able to reach the unbanked segment, Mr. Sandig said RCBC plans to close partnerships with three big merchants this year after forging agreements with courier company LBC and Mercury Drug.

“We have tied-up with LBC and Mercury Drug. We target to seal three more deals with three big merchants this year,” he said but declined to disclose their names

“Our partnership with LBC is currently in phase two. We are interfacing our system with them because we want to convert LBC branches into reloading stations. We have gained the central bank’s approval to make them reloading stations of the MyWallet card,” he added.

There are more than 800 LBC branches nationwide.

The RCBC Mercury Drug-MyWallet card contains all the features of an RCBC MyWallet card, but with its co-branding with Mercury Drug, cardholders will be able to earn points when they make purchases at Mercury Drug stores.

Three other MyWallet card variants are: RCBC MyWallet MRT, RCBC MyWallet Visa, and RCBC My Wallet.

The RCBC MyWallet MRT also serves as an MRT e-ticket.

Holders of the RCBC MyWallet Visa gain access to the Visa network worldwide. They can use it anywhere Visa cards are accepted.

The RCBC MyWallet card is the generic card that allows the cardholder to withdraw cash from ATMs, inquire load balance, pay bills, transfer funds from one MyWallet card to another and make purchases via Bancnet point-of-sale (POS) systems.

RCBC reported P4.25 billion in net income last year, up by 28% from 2009. It had a total of 356 branches as of end-2010.

RCBC shares closed unchanged at P26.80 apiece last Friday.

BSP places Banco Filipino under receivership

Posted on March 18, 2011 12:08:30 AM

BSP places Banco Filipino under receivership

BANCO FILIPINO Savings and Mortgage Bank has been placed under receivership by the Bangko Sentral ng Pilipinas (BSP) after the thrift bank earlier this week stopped servicing clients due to funding problems.

"The Monetary Board (MB) in its meeting [yesterday] ... decided to place Banco Filipino ... under the receivership of the Philippine Deposit and Insurance Corporation (PDIC)," central bank deputy governor Nestor A. Espenilla, Jr. said in press briefing.
"PDIC has started taking over the Banco Filipino offices starting with the head office to secure the records and documents at the bank premises," he added.

The bank, said Mr. Espenilla, was found "unable to pay its liabilities as they become due in the ordinary course of business". It was also said to have "insufficient realizable" assets and its continued operations were ruled as probably leading to losses for depositors and creditors.

Mr. Espenilla downplayed concerns the closure would affect the financial system, saying: "Banco Filipino’s system is not broad. There is no systemic risk".
He said PDIC would be moving to pay the bank’s "177,652 depositors, 97% of whom are small depositors fully covered by deposit insurance of up to P500,000 each".
A PDIC statement put the number of depositors at a smaller 176,313.

It also said, "Insurance payment for accounts with balances of P5,000 and below comprising 53% of the bank’s total deposit accounts ... will start this week after takeover."

"This will be made through postal money order mailed directly to depositors via registered mail," the PDIC added. Insurance claims need not be filed by clients with updated addresses and no outstanding loans.

Depositors with balances of over P5,000, however, need to file claims, forms for which will be distributed in forums scheduled to start next week. No payment schedule was detailed.

Mr. Espenilla said central bank investigation found that Banco Filipino’s losses had averaged some P2 billion from 2007 to 2009. Expenditures were also "way above industry levels," he said, citing P131 million spent for legal services in the fourth quarter of last year.

"This is more than 61% of their gross income for the period," Mr. Espenilla claimed.
The bank’s deposit base totalled P17 billion as of end-December, pulled up by offers of high interest rates, but had dropped to P15 billion as of March 15 due to heavy withdrawals, the BSP official added.

Bank officials will be investigated and could face charges, Mr. Espenilla said
Banco Filipino Vice-Chairman Perfecto R. Yasay, meanwhile, said the bank was also considering a lawsuit against the BSP, which he has charged as wanting Banco Filipino to close anew.

"We will be filing a court action as early as tomorrow," he told BusinessWorld in a telephone interview.

The then Central Bank of the Philippines ordered Banco Filipino shut in 1985, saying the bank was unable to pay its loans. The Supreme Court ruled the closure illegal in 1991, allowing Banco Filipino to re-open in 1994.

The bank subsequently filed an P18.8-billion damage suit against the Central Bank Board of Liquidators and the BSP. Mr. Yasay has claimed the BSP does not want to provide P25 billion in funding ordered by a court given Banco Filipino’s refusal to drop the lawsuit.

Small depositors of BF are first to receive payments

Posted: 17 Mar 2011 09:11 PM PDT

The Philippine Deposit Insurance Corp. (PDIC) took over the operations
of Banco Filipino Savings and Mortgage Bank after being appointed as its
receiver by the Bangko Sentral ng Pilipinas.

The first order of business was to expedite the payment of deposit
insurance to Banco Filipino's 177,652 depositors, according to PDIC
president Jose C. Nograles. Of the total number of depositors, 97
percent can be considered small depositors and covered by the deposit
insurance of P500,000 each.

The first ones to be issued payments are those whose balances do not
exceed P5,000, which account for about 53 percent of bank's total
account holders. These depositors need not file any claims for their
money. PDIC would immediately process them and mail their payments
within a week's time from yesterday.

They will be receiving their money via postal money order which they can
convert to cash at postal offices or the branches of Land Bank of the
Philippines.

As for those whose balances exceed P5,000, they will have to file their
claims and will be subject to validation.

Nograles said that they will be conducting Depositors' Forums nationwide
starting next week where they will be distributing claim forms, and
giving instructions and discussing the requirements for filing claims.
They will announce the schedule for claims receiving shortly after they
finished examining the bank records.

Saturday, March 19, 2011

Organically Grown, Processed and Natural FOOD BOWL NIGHT MARKET

Sorry for cross posting.

Mga Kapatid, Kapuso at Kapamilya,

Try dropping by today, Saturday, 5 p.m. and every Friday and Saturday thereafter until 14 May at ETON Centrist Walk. Located lang po ito pagbaba ng Quezon Avenue MRT Station. You will find organically produced and processed, natural, safe and healthy food products to buy at affordable prices from our farmers, individuals and NGOs, and advocactes. Kung nais n'yo pong mag market ngayon at sa mga susunod na Friday and Saturday and looking for an option sa kung saan pupunta, give this a thought ... and a try!. Punta na po tayo!

Please also press release below.

Support a clean, safe, healthy and affordable foods! Support our organic, natural, bio-eco, non-petro-chem based and sustainable farming stakeholders!

Maraming Salamat po and see you there!

(signed)

Ramon "monpad" Padilla

Policy Research and Advocacy Advisor

Sibol ng Agham at Teknolohiya, Inc. (SIBAT)

(Wellspring of Science and Technology)

cell: (+63) 917 5082954

email: monpad_21@yahoo.com; monpad.21@gmail.com

3-4 flr. # 40 Matulungin St. Baranggay Central

Diliman, Quezon City

Tel #: (+632) 926 8971; Telefax: (+632) 928 8316

email: sibat01@pldtdsl.net

website: www.sibat.org

FOOD BOWL NIGHT MARKET: Safe & Healthy Food Choices Within Reach

Now, a marketplace for safe and healthy fresh produce and products made available to the public --- from vegetables to grains to animal and fish products. A marketplace that works on the concept of accessibility, sustainability, and fair trade practices to capture the bulk buying demand and promote sustainable lifestyle.

"We have invited almost everyone in the organic and natural industry to join us in this endeavor. Big groups of organic and natural farming practitioners have signified their interest to support by joining the market: The Organic Producers Trade Association (OPTA), One Organic Movement of the Philippines with the Agri-Aqua Network International, Inc. (AANI), Sibol ng Agham at Teknolohiya, Inc. (SIBAT) Peoples' Store, Go Organic Philippines, Intercontinental Network of Organic Farmers Organizations (INOFO), Philippine Development Assistance Program, Inc. (PDAP), Kasama Ka Organik Cooperative, Aquarius Agricultural Source Corporation (AASCORP), Magsasaka at Siyentipiko para sa Pag-unlad ng Agrikutura (MASIPAG), the natural farming advocates under the Philippine Natural Farming, Inc. (PNFI), Organic na Negros Organic Producers and Retailers Association (ONOPRA), biodynamic farms under the Agrikultura Natural, Inc. (ANI) Mo, Cosmic Farm of Benguet State University, La Trinidad, the Agrarian Reform Beneficiaries (ARBs) under the Department of Agrarian Reform (DAR) and the Agribusiness Marketing Assistance Service of the Department of Agriculture (DA-AMAS). The Department of Health (DOH) and the Department of Tourism (DOT) were also tapped by the organizers to support through an information campaign to reach its target buyers" said Ms. Sharon Tan, co-organizer of the Food Bowl Night Market.

"The potential for the organically grown produce and foods is growing both domestically and abroad due to the increasing health, environment and social concerns. Food Bowl Night Market will highlight crops and commodities of Philippine "SUSTAINABLE AGRIBUSINESS". Its quality should also meet the demand for its quantity. The Crops, Commodities and Technologies Section will showcase farmers, fisherfolks and organizations providing safe and healthy food to Filipinos and present the value chain: production, processing and marketing. This will be a good start for the farmers to program their production to meet the requirements of institutional buyers especially from hospitals, restaurants, hotels and food caterers" she added.

Other than natural, organic and biodynamic farm produce which includes vegetables, fruits, rice, fisheries, live stock, native free ranged pastured poultry produce and products, Food Bowl Night Market will also feature food operators and wellness organizations, ornamental and herbs producers and the eco-friendly product manufacturers.

The Food Bowl will be launched at the ETON Centris Walk, Quezon Avenue, Quezon City starting March 18. It will open every Friday and Saturday from 4pm to 12mn. ETON Centris Walk is directly under the stop of the Quezon Avenue MRT Station with a commercially accessible area and ample parking for the target institutional buyers.

The World Agape Association, Inc., with the owners of DS Pinoy Organic and Herbal Store organizes the Food Bowl Night Market. The World Agape Association is a group of young professionals whose primary objective is to provide leadership seminars for public servants with focus on public school teachers and farmer leaders. For queries to Food Bowl Night Market, please contact (02) 806-2448 or 0920-969-3242. #

Desiree T. Segovia

Holistic Events and Relations Business Services

(+63920) 969-3242

www.holisticevents.multiply.com