Saturday, December 4, 2010

Tax audit of big cooperatives

This is from a blog site - cooperatives-society.blogspot.com

Thursday, December 2, 2010

IT'S ON WITH THE BIR TAX AUDIT OF BIG COOPERATIVES; BUT DOES CDA AUTHORIZATION COME BEFORE OR AFTER BIR'S SERVICE OF ITS LETTER OF AUTHORIZATION ?

Last November 2, 2010, I warned about it. This was in my blog titled," Multi-millionaire Cooperatives Within the Radar Screen of the BIR Tax Audits."

I wrote then, and I quote: "..We have it on good authority that the big cooperatives are lined up for tax audit by the Bureau of Internal Revenue, after the closing of the cooperatives' 2010 fiscal year.."

I was wrong on the timing of the audit. BIR was not to wait till the next year (2011) for the tax audits. But I was dead on target that the audits are forthcoming. In fact, as early as during the third week of last month (November), one big credit cooperative in Central Luzon was served the BIR Letter of Authority, which was dated on the second week of November.

Moreover, I was right in saying that the reason for the tax audits is because many of the millionaire cooperatives (comprising 1% of total cooperatives registered) have exceeded the P10-million ceiling on accumulated reserves, hence, they are liable for taxes on their transactions with non-members.

The LoA reads this: "..SIR/MADAM/GENTLEMEN: The bearer(s) hereof, Revenue Officers,..........(names of BIR employees), of Revenue District No. __ of _______ Branch is/are authorized to examine you books of accounts and other accounting records for ALL INTERNAL REVNUE TAXES for the period January 1, 2009 to December 31, 2009 pursuant to REGULAR AUDIT PROGRAM FOR 2010. The Revenue Officer(s) identified herein are provided with the necessary identification card(s) which shall be presented to you upon request.

It is requested that all required documents, books and records be provided to the Revenue Officers in order to expedite the examination.

You will be duly informed of the results of the examination upon approval of the report submitted by the aforementioned Revenue Officer(s).

Very truly yours,

______________________

Revenue Director __________ .."

If your cooperative was one of those served the LoA, it is well for you to brush up on what to do.
Visit the BIR's website and browse on "Taxpayer's Rights." This section contains "General Audit Procedures and Documentation."

It is said there that the Tax Audit process begins with the issuance of Letter of Authority (LoA) and the serving of the same to the taxpayer who had been selected for audit. The LoA is an official document that empowers a Revenue Officer to examine and scrutinize a Taxpayer's book of accounts and other accounting records, in order to determine the Taxpayer's correct internal revenue liabilities.

The LoA should be served to the taxpayer within 30 days from the date of its issuance. And the Revenue Officer is allowed only one hundred and twenty days from the date of receipt of the LoA by the taxpayer to conduct the audit and submit the required report.

It is also well to note the provisions of Republic Act 9520's Article 61. Tax and Other
Exemptions (3) and which we quote, as follows:

" xxx provided further; That nothing in this article shall preclude the examination of the books of accounts or other accounting records of the cooperative by duly authorized internal revenue officers for internal revenue tax purposes only, after previous authorization by the Authority (CDA)."

The question now is: When does the BIR serve the LoA to the cooperative to be audited? Does the BIR also present along with the LoA, a copy of the CDA authorization for the Revenue Officers to conduct the examination of the cooperative's books of accounts?

Or when the BIR serves the LoA to the Cooperative, is it presumed that the BIR had secured and been granted a prior authorization from the CDA?

This is not clear. As far as the Region III multi-millionaire cooperative that was served the LoA (which I earlier mentioned), what was served to the cooperative was only the BIR LoA. Is it not incumbent upon BIR to also show to the Cooperative to be audited that they had secured a CDA authorization prior to their issuance of service of the LoA to the cooperative?

Or can the BIR just serve the copy of the LoA, even without prior securing an authorization from CDA, then secure the CDA authorization later, but not before the BIR Revenue Officers conducts the actual examination of the cooperative's book of accounts?

Should not the CDA clarify this, for the protection of the Cooperative? Or the cooperative is on its own, sink or swim? As they say, the devil is in the details..
So there. Till next time. (END)

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Friday, December 3, 2010

Philippine Call Centers Overtake India

Philippine Call Centers Overtake India

Its young workforce, well trained in English, is luring call center operations from Bangalore and Guragon

By Mehul Srivastava

BW MAGAZINE

For the past decade, Americans dialing customer service have stood a strong chance of being connected to someone in India. Now they're more likely to end up phoning the Philippines. Although the country got a slow start in outsourcing, strong government support, a plentiful supply of English-speaking college grads, and an effort by call center operators to diversify have helped the Philippines overtake India in call center revenues. "It's not that we are trying to take business away from India," says Oscar Sañez, chief executive officer of the Business Processing Association of the Philippines, an industry group. "We're just looking for our own place in the sun."

The Philippines this year will pocket $5.7 billion for call center work from the U.S., Europe, and Australia, vs. the $5.5 billion that India's call centers will take in, according to the Everest Group, an outsourcing advisory firm. Call center operators like the Philippines because English is taught in schools and Filipinos have a cultural affinity for the U.S., which ruled the country from 1898 to 1946. "Clearly, these guys had a much later start, but they have caught up," says Everest Group partner Nikhil Rajpal. India, though, continues to lead in overall outsourcing revenues: $70 billion, vs. $9 billion for the Philippines. The outsourcing industry now employs 530,000 people in the Philippines and makes up about 6 percent of gross domestic product.

A decade ago, millions of young Filipinos, especially English-speaking nurses and law students, had emigrated to the U.S., Hong Kong, and elsewhere. The billions of dollars they sent to their families every year represented the country's second-largest foreign exchange earner, after computer chips from Texas Instruments (TXN) and a handful of other tech players. Frustrated government officials looked to India for inspiration. "India had become very famous for call centers, and we decided to learn from their example," says Celeste Ilagan, who spent the past decade working in government programs to encourage outsourcing and now heads communications for SPi Global, a call center operator owned by the Philippines' largest telecom company.

To better understand India's success, Filipino officials visited industry representatives in that country. The Filipino government streamlined the approval process for companies setting up call centers and changed its rules to allow individual buildings to be designated special economic zones. Such zones offer tax breaks, quick clearances for building permits, and an exemption from import duties on computers and telecom gear. And some 40,000 students have benefited from government-sponsored training to improve their English and communication skills.

Call centers are changing the rhythms of Filipino life. Malls, bars, cinemas, and cafés have popped up near buildings where young, nocturnal workers earn as much as 300,000 pesos ($6,850) a year in a country where annual per capita GDP in 2009 was about 83,000 pesos, Bloomberg data show. Weaned on radio stations that play U.S. Top 40 pop and hip-hop, teens seeking jobs in call centers can banter in English as naturally as their native Tagalog. "There used to be some doubts about letting young people work so late at night, but now this has become an industry that young people aspire to," says Thea Lu, a 30-year-old team leader with 24/7 Customer.

A big part of the Philippines industry is run by companies that participated in India's outsourcing revolution and are now looking to expand abroad. A tax break for Indian outsourcing shops is set to expire in 2011, though the industry is lobbying hard against it. In Bangalore and Gurgaon, India's biggest outsourcing hubs, companies must rely on diesel generators to ensure electricity, run fleets of buses to ferry employees to and from work, and struggle with attrition that can reach 50 percent a year.

Those hassles, as well as a desire to diversify geographically, have spurred both Indians and Americans who operate call centers in India to shift work to the Philippines. Bangalore-based Wipro (WIT) set up in the Philippine city of Cebu in 2007 and now has 2,000 workers in the country; by 2014 it expects to increase that to 8,000. And 24/7 Customer, a California company that started operations in India in 2000, opened a Philippines office in 2005. It now has 4,000 employees in the country, vs. 3,000 in India. "It's very sad that India could not keep up with its neighbors," says 24/7 co-founder Shanmugam Nagarajan.

As the Philippines government aims to double overall outsourcing revenues, to $18 billion by 2015, it faces big hurdles. While it's easy to hire new recruits who speak English, finding experienced managers is tougher; in an industry so young, few people have been around long enough to handle management or strategy jobs. "Where are we going to find the right kind of managers who can make our operations stand out?" asks Steve Barker, who heads Asian operations for Sitel, a Nashville-based company that has 10,000 workers and seven facilities in the Philippines.

Another obstacle is that the Philippines produces only about 10 percent as many engineers as India. Indian outsourcing shops have gone from answering phone calls to account management, tech support, and consulting gigs such as helping banks manage financial derivatives and improving retailers' supply chains. While it's fairly easy to handle customer phone calls, higher-level work requires the kind of specialized education that India provides the 400,000 engineers it graduates annually. "Ten years down the line the Philippines may be a hotter destination," says Sanjeev Bhatia, who oversees international operations for Wipro BPO. "But in IT and software, India really doesn't have any competition."

The bottom line: The Philippines has overtaken India in call centers, though it remains far behind in more sophisticated outsourcing services.

Srivastava reports for BusinessWeek from New Delhi.

UCPB’s deposit-raising exercise oversubscribed

UCPB's deposit-raising exercise oversubscribed

Friday, 03 December 2010 00:00

United Coconut Planters Bank (UCPB) said it raised more money than it planned from the sale of a long-term deposit instrument amid strong demand from investors. In a statement, UCPB said it raised P4.5 billion from its issuance of long-term negotiable certificates of deposit (LTNCD), or P1.5 billion more than the planned P3 billion during the one-week offering period that ended on November 19.

"We were surprised by the market's overwhelming response. Though we had anticipated the issue to perform well, we didn't expect demand to be this enthusiastic," Eulogio Catabran, UCPB executive vice president and treasurer, said.

The LTNCD carried a fixed rate of 6.25 percent per annum payable quarterly over the next five years and three months or until February 2016. The rate was set at 100 basis points over the five-year benchmark rate recorded last November 4.

UCPB tapped Citicorp Capital Philippines Inc. to arrange the LTNCD offering and appointed Multinational Investment Bancorporation, Citicorp Financial Services and Insurance Brokerage Philippines Inc., as well as itself, as selling agents.

LTNCD are like time deposits but have longer maturities of five years or more and cannot be pre-terminated. However, being negotiable, they can be sold to other investors and used as collateral for loans.

Catabran said the bank will use the proceeds to beef up its deposit base so it can accelerate the expansion of long-term assets, mainly loans to the middle market and the consumer sector.

The bank's total deposits grew 12 percent to P137.7 billion in the first semester this year from P123.3 billion last year.

Its loan portfolio expanded by 20 percent to P58 billion from last year's P48.2 billion.

The loan expansion keyed the 25-percent increase in the bank's interest income during the period, raising profit as of June this year to P1.306 billion, a turnaround from a loss of P172 million a year ago.
Lailany P. Gomez

Foreign business chambers offer economic roadmap

Foreign business chambers offer economic roadmap

Friday, 03 December 2010 00:00

By Ben Arnold O. De Vera reporter

WITH the government yet to firm up its medium-term economic plan, foreign businessmen in the Philippines are recommending to President Benigno Aquino 3rd a roadmap that would boost seven industries seen driving the country’s growth in the next decade. In a statement, the Joint Foreign Chambers of the Philippines said it has come up with an advocacy paper titled “Arangkada Philippines 2010: A Business Perspective,” which details 471 recommendations from both local and foreign businessmen.

The paper aims to help the government “[build] a more competitive economy, driven by ethical and sustainable practices, reform-by-reform, leading to high growth and millions of new jobs.”

The business group is seeking an appointment with Malacañang to brief the President on “Arangkada Philippines 2010.”

The paper is pushing for the development of the so-called “Seven Big Winners”—sectors expected to fast-track the country’s economic development: agribusiness; information technology-business process outsourcing; creative industries; infrastructure; manufacturing and logistics; mining; and tourism, medical travel and retirement.

These seven industries have potentials to generate in the next 10 years up to $75 billion in foreign direct investment and 10 million jobs, the business group said.

In a meeting with the Departments of Finance and of Trade and Industry last August, the business group secured the two agencies’ support for the “Seven Big Winners” initiative.

“Arangkada Philippines 2010” is the product of a series of focus group discussions (FGDs) that began last year. About 300 experts and stakeholders participated in the FGDs.

“The ‘Arangkada Philippines 2010’ is about creating a bright future for the Philippines, the 12th most populous country. It is a reference document to a better Philippines, a middle-income economy with robust investment levels, better infrastructure and higher government revenues to pay for social services, especially education and health.

Absolute poverty would be reduced by inclusive growth with less malnutrition, crime, and insurgency.
With more rewarding opportunities at home, Filipinos would have less reason to work abroad,” the business group said.

“Catching up and keeping up is an imperative, not a choice. The Philippines has lagged for too long, losing competitiveness, despite its immense potential and location in the fastest growing region of the globe.
More than ever, opportunities abound for the Philippines to improve trade and investment ties in Asia and elsewhere and advance towards high-income status,” the group said.

The National Economic and Development Authority (NEDA), which is drafting the government’s medium-term economic plan, said the new administration would focus on inclusive growth.

While awaiting this blueprint, the government has embarked on a public-private partnership (PPP) initiative to improve the country’s infrastructure.

Amidst Controversy, India's 600 Million Poor Still Need Microfinance

Amidst Controversy, India's 600 Million Poor Still Need Microfinance

On Nov. 19, Grameen Foundation President, CEO, and founder Alex Counts released an official statement addressing the activities of for-profit microfinance institutions (MFIs) in the Indian state of Andhra Pradesh — a controversy that has ignited worldwide news. With the spotlight already shining bright on the Indian MFI sector after a high-profile public stock offering by SKS Microfinance (largest MFI in India) and the unexpected sacking of its CEO, in October reports of suicides among microfinance clients because of “harassment” by aggressive loan officers began emerging in Andhra Pradesh (home to several leading for-profit MFIs, including SKS). In response, the state government instituted an ordinance requiring all MFIs to get registered in each district of the state where they operate, and imposing fines and jail terms on senior management if an MFI was found guilty of using coercive lending practices. The Indian Finance Ministry also informally instructed public-sector banks – important sources of funds to MFIs – to cease lending to MFIs that charged interest rates of more than 25 percent.

These incidents have raised important questions about whether microfinance in India is in fact delivering on its promise to lift the poor out of poverty. However, despite the negative attention toward MFIs in Andhra Pradesh, “Grameen Foundation continues to strongly believe that making financial services available to the poor and poorest is one of the most effective ways of helping them move themselves out of poverty.”

We don’t work with any of the MFIs in Andhra Pradesh. Instead, Grameen Foundation – which has worked in the country for more than a decade – focuses on the least-served states north and east of the country. Grameen Foundation is not against MFIs responsibly earning profits, Alex said (the cost of providing financial services to the poor, especially in hard-to-reach areas, can be high), but MFIs also have a responsibility to demonstrate how well they are achieving their poverty-reduction goals. "Grameen Foundation strongly believes that MFIs must measure their social performance as rigorously as they measure financial performance," he said. MFIs can measure this "double bottom line" with tools like the Progress out of Poverty Index™, a country-specific model inspired by the 10 indicators of poverty developed by Grameen Bank.

As this controversy continues to garner media attention, the need for microfinance in India remains incredibly high — 600 million people there live on less than $1.25 per day, more than in the continent of Africa. We will continue to provide microfinance and technology solutions that help MFIs operate more efficiently and cost-effectively, so they can reach more poor people at lower cost.

Read Alex’s entire statement and learn more about our initiatives, likeGrameen Capital India, that work to get financial services to those in India who need it the most.

UCPB raises P4.5B from certificates of deposit

UCPB raises P4.5B from certificates of deposit
By Ted P. Torres (The Philippine Star)
Updated December 03, 2010 12:00 AM
MANILA, Philippines - The United Coconut Planters Bank (UCPB) has raised P4.5 billion from the issuance of long-term negotiable certificates of deposit (LTNCD), an oversubscription of P1.5 billion from its original size of P3 billion.

UCPB executive vice president and treasurer Eulogio Catabran said favorable market conditions reinforced the strong investor demand for the bank’s maiden LTNCD issue.

“We were pleasantly surprised by the market’s overwhelming response,” he added.

The bulk of the subscription came from individual investors who have the most to gain from the investment. Individual citizens, resident aliens and non-resident aliens engaged in trade or business in the Philippines are exempt from paying the 20-percent income tax on earnings from deposits with tenors of five years or more.

The LTNCD carried a fixed rate of 6.25 percent per annum payable quarterly over the next five years and three months, or until February 2016. The rate was set at 100 basis points over the five-year benchmark rate recorded last Nov. 4. Issue arranger Citicorp Capital Philippines said the oversubscription reflects strong investor confidence in the bank’s near-term prospects.

UCPB posted a net income of P1.66 billion in 2009, and surpassed this in just the first nine months of 2010 as its profit hit P1.88 billion. At the end of October, the bank’s net income has reached P2.08 billion.

Catabran said UCPB will use the P4.5-billion proceeds from the LTNCD offering to further increase long-term loans to the middle market and the consumer sector — where margins are higher — to boost profits.

He said loans have been the key driver of the bank’s profit growth. In the 10 months to October, total loans of the bank increased 25 percent year-on-year, from P35.34 billion to P44.13 billion, pushing up interest income by 19 percent, or from P5.47 billion to P6.49 billion.

Mobile broadband seen becoming telcos’ main revenue earners

Mobile broadband seen becoming telcos' main revenue earners
By Paolo Montecillo
Philippine Daily Inquirer

MANILA, Philippines—The steady drop in prices of smart phones in the market and the growing popularity of Facebook and other social networking sites on the go will be the main drivers for broadband revenue growth in the coming years.

Ayala-led Globe Telecom Inc. said revenue from this market segment would soon overtake those from the traditional call and text services.

"Demand for mobile broadband is inherently there as the market for mobile telephony has already reached its mature stage, though 96 percent of our total subscriber base are prepaid customers," Globe president and CEO Ernest Cu said in a presentation during the Mobile Asia Congress in Hong Kong, an annual gathering of thousands of CEOs and key executives of the region's mobile phone industry.

In his speech, he said over 27 percent of all smart phones, which allowed users to access the Internet on-the-go, released in the market to date are priced at under $200 (about P9,100).

By 2014, that percentage could hit more than 45 percent, estimates by New York-based technology research firm ABI Research showed. For Globe, Cu noted that smart phone sales alone were up to 40,000 units a month.

He said the rapid growth of mobile technology had come natural to an archipelago like the Philippines. The country has only 2.5 million landline connections today, giving it a household penetration of only 10 percent. In contrast, there are about 80 million mobile phones or nearly one per person in the country today.

He added that "despite the low penetration rate for fixed-line broadband, social networking is posting phenomenal growth in the Philippines."

In fact, the country jumped to sixth from seventh in the roster of Facebook users around the world in the last three months alone, with over 18 million members. It is the fourth-largest in the number of Twitter users across Asia with over three million users, he pointed out.

The challenge for companies like Globe, however, is offering an acceptable price that will let users go on the Web using their phones without racking up their costs.

At the moment, one of Globe's most affordable offering gives users unlimited access to their favorite mobile Internet site such as Facebook for P20 a day.

In the past few months, local phone firms have seen revenues from call and text services decline slightly. Earnings from broadband Internet services, however, are on a steady rise, although the segment still makes up for but a small part of the total revenue.

OFW remittances to post double-digit growth till yearend

OFW remittances to post double-digit growth till yearend
12/02/2010 | 08:08 PM

Metropolitan Bank and Trust Co.'s First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) have projected that money sent home by Filipinos abroad would grow by double digit till the end of the year.

"We expect that remittances will grow by double digits from this point until year end," FMIC and UA&P said in a report.

"The fourth quarter is usually the peak season for remittances for Filipino migrants to send money to their family due to the traditional gift giving of the holiday season," they said.

Central bank statistics showed that overseas Filipino workers' remittances in September registered a double-digit growth for the first time since December last year.

In September this year, money transfers from Filipinos abroad grew by 10.6 percent to $1.6 billion from $1.446 billion in the same month last year.

The Bangko Sentral ng Pilipinas had reported that remittances increased by 7.8 percent to $13.782 billion in January-September from $12.789 billion in the same period last year.

Major sources of remittances came from the US, Canada, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Singapore, Italy, and Germany.

In 2009, remittances rose by 5.4 percent to a new record of $17.348 billion from $16.426 billion in 2008.

The total money OFWs sent home last year exceeded the revised 4-percent growth forecast set by the BSP on the back of sustained demand for skilled Filipino workers abroad.

For this year, the BSP's Monetary Board has already upgraded remittances growth forecast to 8 percent instead of 6 percent. -- JE/OMG, GMANews.TV

Aquino sees $100-B BPO profits in 2020

Aquino sees $100-B BPO profits in 2020

Philippine Daily Inquirer
First Posted 07:36:00 12/02/2010

MANILA, Philippines—President Benigno Aquino III expects the business process outsourcing industry to generate as much as $100 billion in profits in 2020.

Aquino made the bold forecast during the opening of three new service delivery facilities of IBM, the US-based information technology firm, at the UP Ayala Land Techno Hub in Quezon City.

From being a “virtual non-entity” in 2001, the BPO sector has become a sunshine industry, generating more than $9 billion in revenues, and employing close to 550,000 in 2009 alone, Aquino said.

He said the sector has contributed 10.2 percent of the growth in services that makes up about 49.5 percent of the country’s gross domestic product (GDP).

He said the BPO sector has already contributed 3.2 percent to GDP growth in the second quarter of 2010.

“The government predicts around $12 billion to $13 billion in revenues by 2011. By 2020, your profits are expected to rise to as much as $100 billion, comprising 20 percent of the market share in the global industry,” he added.

James Velasquez, IBM country general manager, said the expansion strengthens IBM’s service delivery capability in the Philippines, which serves more than one million client employees in 84 countries.

“This expansion demonstrates our continued commitment to the country,” Velasquez said.

Aquino’s convoy was greeted with jeers and protest placards as it made its way to the technohub.

The President had to be taken to another entrance so he could make it in time to deliver his speech.

The protest was sparked by students objecting to supposed cuts in the budget of state universities and colleges in 2011.

Angry students confronted Aquino over the alleged budget cuts.

PLDT’s P2.8B fiber optic network completed

PLDT's P2.8B fiber optic network completed

Philippine Daily Inquirer
First Posted 22:38:00 12/02/2010

MANILA, Philippines—Philippine Long Distance Telephone Co. (PLDT) has completed the construction of a P2.8-billion fiber optic network that will bring faster and more reliable broadband connection speeds to the Visayas and Mindanao areas.

In a briefing at its Makati headquarters on Thursday, PLDT said its new Domestic Fiber Optic Network (DFON) would help drive the growth of vital industries such as business process outsourcing (BPO) outside the Metro Manila area.

"Our transmission backbone is now much more resilient, thus, raising the quality and reliability of our services," PLDT president and CEO Napoleon Nazareno said.

"We can also provide more communities with both basic and advanced broadband services, unlocking new economic opportunities for central and southern Philippines," he said.

The new cable system, which is 1,300 kilometers long, will stretch from parts of the Bicol province all the way to the Mindanao area through Visayas.

Two fiber-optic cable systems were built on different sides of the country. With two cables in place, PLDT said its service would remain reliable even if one of the cables snapped.

In the past, accidental cable cuts have caused slowdowns in bandwidth speeds, outraging many of the company's household and corporate subscribers.

The cable system will have a capacity of 1.5 terabytes per second. This will allow the company to open up four million new digital subscriber line (DSL) connections in the areas near the cable system. Today, PLDT serves just 600,000 DSL lines.

Eric Alberto, head for customer sales and marketing, said the new network would also allow the company to deliver high-bandwidth services such as high-definition video streaming and social networking on mobile phones.

Alberto said the new network would make provinces around the country, where communications infrastructure had previously been a setback, more attractive for BPO firms to set up shop in.

"This latest DFON expansion greatly reduces the risk of downtimes which will benefit not only large corporations but also small businesses and households," PLDT customer service assurance group head Rolando G. Pena said.

The country's BPO sector currently employs about 600,000 employees. It is expected to end the year with over $9 billion in revenue.—Paolo G. Montecillo

Thursday, December 2, 2010

How call center agents can double their income

Posted at 11/23/2010 2:15 AM

Gusto niyo bang ma-doble o ma-triple ang inyong sahod bilang call center agent? May paraan diyan: Mag-aral kayo ng Korean at iba pang foreign language. May malaking sahod ding nag-aabang sa ibang bansa para sa mga gustong magtrabaho bilang medical equipment repair technician. Nagba-Bandila si Apples Jalandoni. Bandila, Nobyembre 22, 2010.

Why Philippines has overtaken India as world's call center capital

By David Dizon, abs-cbnNEWS.com

Posted at 12/02/2010 1:20 PM | Updated as of 12/02/2010 1:20 PM

MANILA, Philippines - The Contact Center Association of the Philippines (CCAP) on Thursday urged the Aquino administration to continually promote the country as the world's premiere hub for call center operations.

Speaking to ANC's Headstart, CCAP President Benedict Hernandez said the Philippines has already overtaken India in terms of number of call center employees this year.

"When you think of the contact center environment, we have assumed the number 1 position. Last year, we were about 300,000. This year, its 350,000 in terms of employed Filipino working in call centers in the Philippines compared to only 330,000 in India. Right now, the best place to put a call center from a quality position is the Philippines," he said.

A separate report by IBM's Global Locations Trend said the Philippines has also overtaken India as the world's number 1 country for shared services and business process outsourcing (BPO).

The Philippines' call center revenues are expected to reach $5.7 billion this year or $200 million higher compared to India's $5.5 billion. BPO revenues, on the other hand, are forecast to hit $9.5 billion, playing catch-up to India's $12.4 billion.

Hernandez said the country assumed the top spot in terms of call center employees and revenues because of the quality of English-speaking employees in the Philippines.

"We won this war not because we're lower cost than India. To some extent, we are a little bit higher priced to operate a call center compared to India. We won this battle by virtue of Filipino quality. We grew faster than India because it's the Filipino talent, which is world class caliber," he said. He noted that Indian call centers are already migrating some of their operations to the country.

Cultural affinity, neutral accents

Jojo Uligan, CCAP corporate secretary and executive director, said the Philippines played up its strengths in the past 10 years by being a superior value destination for US companies.

He said Filipinos have a better cultural affinity to Americans, and their accents are more neutral.

"When you train a Filipino to speak English, you would never know it is a Filipino. I think Americans like to talk to a person they can understand," he said.

Hernandez said various leaders can take credit for the rapid growth of the business process outsourcing industry. He said President Fidel Ramos helped pave the way by deregulating the telecoms industry and fixing the country's power supply problems.

He added that former President Gloria Macapagal Arroyo and then Trade Secretary Mar Roxas continued the trend through tax exemptions.

Uligan said he hopes the Aquino administration will continue the trend by giving more training to young Filipinos and promoting the Philippines as a BPO destination.

"We're not just focusing on the United States but other English-speaking countries like the UK, which we only service a little. Australia and New Zealand are also good potential for us. But again, if you can market in these areas where we service a smaller percentage of the business, then we will have a better chance of getting more jobs," he said.

Hernandez encouraged fresh graduates to apply for call center jobs. He said the BPO industry is expected to grow to 1.3 million jobs with $25 billion in revenue in the next couple of years.

"This is an industry that has so many opportunities. It needs agents, supervisors and managers. The growth potential is from inside and there is also training involved. You also hone language, communication and problem-solving skills, which are portable skills that you can apply anywhere," he said.

Globe, rural banks to distribute cash for Philippine CCT

PIA Press Release
2010/12/01

Globe, rural banks to distribute cash for Philippine CCT

Balabac, Palawan (1 December) -- Conditional cash transfers (CCT) for the 4Ps beneficiaries is now made more accessible, easier, and hassle-free with the new innovative solution utilizing the GCash, rural banks and other money remittances channels.

Land Bank used to distribute these cash grants, which are meant to provide for the education and health needs of the children and pregnant mother in a poor family, in exchange for their compliance to a list of program conditionalities.

A 4Ps beneficiary waits for the confirmation of her reference code sent through text in the new GCash remit for the release of cash grants.

However, the beneficiaries in the remote villages are burdened by the transportation costs in claiming their monthly CCTs in the Land Bank. There are only 3 branches of the bank in Palawan and these are located in the poblacion areas.

Innovative Solutions

GCash Remit is one of the solutions to address this problem. With this new cash release scheme, beneficiaries are saved from spending on fares, some of which are even bigger than the cash grants that they are set to receive.

"Secretary (Dinky) Soliman really wants to bring the money closer to the people," says Director Honorita Bayudan, the new National Program Manager of 4Ps, during the evaluation meeting for the pilot GCash Remit. Bringing the money closer to the people means utilizing "merchants in the market" who can do the job, even if it will entail additional administrative cost for the Department.

"If it saves beneficiaries from spending their money, which are already so little, the Secretary doesn't mind," Dir. Bayudan continued.

Out of the nine Landbank branches in five island provinces of the MIMAROPA region, only two are actually 4Ps-covered areas. This means that there are 30 other towns which have to spend on transportation. This is where GCash Remit Outlets will come in as well as other conduits, such as rural banks or local cooperatives, in areas where there is no GCash Remit.

Challenging Geographical Locations

It is no surprise that the program, which targets helping the poorest of the poor, will cover far-flung areas not even known to the general public. Reaching these poor people then entails high transportation cost and long hours of travel.

For instance, Martasia Aminola, a Molbog native from Balabac, Palawan will have to spend almost P1,500 to reach the nearest LBP in Brooke's Point. The amount she will spend is more than what her family is set to receive for a month. With two children in elementary school and a toddler aged 2, she is supposed to get P1,100.00.

But for this, she has to travel about 70 nautical miles from her home which includes 1 hour walk down the mountain and another 1hour motorcycle ride which cost P200 to reach the Poblacion. From the pier, she will have to travel for four hours by boat to Rio Tuba where she has to pay P380, a tricycle ride P25 and another one hour bus ride to reach Brooke's Point.

She also has to leave home at the break of dawn to catch the only boat trip that leaves to Rio Tuba at 6AM. If she can't get back to this port by noon, she will also have to spend the night there and wait for the only one scheduled boat ride to Balabac.

Given this challenging transportation to reach nearest LBP, Aminola still belongs to one of the "nearest" barangays to the Poblacion. Beneficiaries from six other barangays are located in separate islands, Mangsee being the farthest which is four hours away from the Poblacion but only 15 minutes away from Sabah, Malaysia.

This means even higher transportation costs and longer travel, which is particularly harder for some mothers who have to bring their children with them with no one left at home to take care of them.

Balabac may be considered as one of the most geographically hard-to-reach places not just in the region but in the whole country but this is not to say that the four other island provinces of MIMAROPA do not have its share of geographical challenges as well.

More Efficient and Secure

Apart from the beneficiaries spending only minimum amount in transportation, this new option also offers a more secure distribution of cash grants when the GCash Remit Outlet is responsible for security. In the past, Land Bank tellers have to risk their lives travelling for long hours bringing millions of pesos with them.

"Our tellers have to literally hug the money bags close to them even in their sleep" shared Ms. Ma. Belma Torla, Landbank AVP from Batasan Branch during the GRemit pilot evaluation meeting, noting that the offsite cash distribution lasted for more than one day to accommodate the thousands of beneficiaries in one municipality.

The program will also be more protected from political influences as no security, whether through manpower or use of "more secured vehicles", will no longer be needed. Secretary Dinky Soliman herself said that the Department will now implement the program with "less room for outsider influence".

Mr. Vincent Obcena, one of the regional focal persons, who witnessed the pilot GRemit Cash release in Balabac, also noted that the local economy will now benefit as beneficiaries will buy food, school and health supplies from their local markets instead of the town where Landbank is located.

This new option was piloted successfully in Balabac and Taytay, in the province of Palawan last November 5, 2010. Serving almost 3,000 beneficiaries in Balabac, the GCash remit lasted for one week. The GCash Remit release in Taytay, which aims to release cash grants for 7,000 beneficiaries is still on-going. (DSWD-IVB/vsmendoza) [top]

Muhammad Yunus ‘siphoned Tk 7billion aid for poor’

Muhammad Yunus 'siphoned Tk 7billion aid for poor'

ADMIN

– DECEMBER 1, 2010POSTED IN: FEATURED NEWS

Articles feature in bdnews24.com(Bangladesh's First Online Newspaper)
Europe Correspondent

Dhaka – Donors found out that Muhammad Yunus drew off nearly Tk 7 billion (100 million dollars) in aid for poor borrowers of Grameen Bank to another of his company back in 1996, the Norwegian TV says.

An investigative foreign TV documentary "Fanget i Mikrogjeld" or "Caught in Micro debt" aired on Tuesday on the National Norwegian Television, NRK shows 'the banker to the poor' transferred the money to Grameen Kalyan, which was in no way involved with microcredit operations.

Tom Heinemann, the director of the film premiered on Tuesday, said he failed to speak to Yunus despite several attempts. When bdnews24.com tried to reach him, a personal aide said he was abroad at the moment and gave his email address to contact him. He is expected to return on Dec 12, the aide added.

The documentary film quotes Professor Jonathan Morduch from New York University saying that Grameen Bank, which also won the Nobel Peace prize alongside Yunus, received $ 175 million dollars in subsidies to give tiny loans to poor people.

The secret documents, which have never been published before and some of which are available on the bdnews24.com website (Click here to see the documents) ), reveal that Professor Yunus breached the agreement on housing loans.

And when the Norway embassy, Norwegian aid agency Norad and the Economic Relations Division in Bangladesh demanded that he return the money to Grameen Bank, the microcredit guru gave back less than some Tk 2 billion ($ 30 million) of the 100 million. The remainder remained with Grameen Kalyan.

As he did not want the story out, Yunus in desperation wrote a personal letter on April 1, 1998 to the then CEO of Norad requesting help. "If the people, within and outside government, who are not supportive of Grameen, get hold of this letter we'll face real problems in Bangladesh," pleaded the man synonymous with small loans to village women.

"And Norad, the Norwegian Embassy and the Bangladeshi authorities kept their mouths shut," the documentary says. The money was from foreign grants from countries such as Norway, Sweden, The Netherlands and Germany, and the transaction took place at the end of 1996.

Heinemann, a Danish award-winning journalist who directed the documentary, told bdnews24.com after the premiere that he had attempted to look critically into microfinance and stumbled upon these things.

"I have tried to talk to Mr Yunus for six months. But he didn't want to talk to me," he said over telephone early on Wednesday.

In one of the many documents dated Jan 8, 1998, Yunus explained why he did the transaction. "With gradual higher interest rate charged, (…) more and more money will have to be paid out as taxes in future," he wrote to the Norwegian Embassy.

WHY AGREEMENT?

The Norwegian Embassy in Dhaka at a meeting with the bank at its office on Dec 3, 1997 came to know about the May 7, 1997 agreement between Grameen Bank and Grameen Kalyan, which became effective on Dec 31, 1996 for transfer of funds of Tk 3.914 billion.

In a letter to Yunus on Dec 15, 1997 the embassy said: "In line with the agreement, Grameen Bank transferred all funds accumulated up to Dec 31, 1996 received from donors for revolving funds, to Grameen Kalyan, which at the same date transferred the amount to Grameen Bank as a loan.

Tk 1.927 billion of the amount was related to the revolving fund for housing loans.

The letter signed by ambassador Hans Fredrik Lehne said: "The agreement concerning these transactions has not made provisions for any interest rates to be charged for this part of the loan, nor any terms of repayment."

The agreement was signed between the governments of Norway and Bangladesh on Nov 30, 1994 to support Grameen Bank's Phase IV project.

Annex 1, clause 4 of the agreement said: "The amount of the Grant used for housing loans will be used as a revolving fund."

The Norwegian Embassy was concerned about the agreement between the two organisations for not informing it, saying "the agreement was contrary to the quoted clause of the agreement between the governments."

It also observed that the accounts of Grameen Bank as of Dec 31, 1996 did not reflect any revolving fund for housing loan in operation under the bank.

The embassy, which accepted the ownership of Grameen Bank, pointed that "the ownership of Grameen Kalyan is of another nature, and Norway has not entered into an agreement with Bangladesh to provide funds to Grameen Kalyan for onlending to Grameen Bank".

"The agreement has further left uncertainty about future repayment of the loan to Grameen Kalyan, since it is not regulated by the agreement.

"The agreement is also silent about Grameen Bank's use of the loan from Grameen Kalyan."

The embassy in that consequence considered the agreement between Grameen Bank and Grameen Kalyan "as a change which affects two agreements between the two governments to support Grameen Bank."

It also asked for a written explanation from Yunus "why Grameen Bank entered into the agreement with Grameen Kalyan, and of the consequences for the owners of Grameen Bank and the beneficiaries of the housing loans."

'MISUNDERSTANDINGS'

Even after Yunus had provided his explanations over the agreement, there were some misunderstandings crept up between Grameen Bank and the Norad, according to his letter on Apr 1, 1998 to Norad director general Tove Strand Gerhardsen. "We are struggling to resolve it. But I think it is not making much progress."

His letter came after the embassy wrote to Bangladesh government alleging that "Grameen was transferring donor money (including that of Norad) to various enterprises outside of Grameen Bank".

He feared the allegation would create a lot of misunderstanding within Bangladesh government.

Yunus, informing Gerhardsen about his Oslo visit on Apr 29 and 30 invited by Telenor and the Worldview International to discuss a joint venture project in mass education in Bangladesh, at the end of the letter requested him to meet "for a few minutes" to explain the seriousness of the matter.

"Sorry to bring up all these matters to you. But I have no option left," he ended.

PAY BACK

The film crew also travelled several times to Bangladesh and visited some of the most significant villages in the history of Grameen Bank.

Says Heinemann: "In Jobra, we meet the daughter of the famous original loan taker, Sufiya Begun. In "Hillary Village", where the former first lady of the USA, Hillary Clinton declared her support for both Mohammad Yunus and Grameen Bank, the crew meets poor people who have gained nothing but more debt due to micro credit."

"Almost all of the loan takers interviewed told the same story. Each one had multiple loans in various micro credit banks and organisations and had had a hard time trying to pay back their loans. Some had sold their house, others had their tin-sheets pulled off their houses to cover the weekly payments."

The film also interviews a number of leading social scientists and researchers who, for years, have questioned the "big success" of microcredit. "In fact, renowned social scientists, such as David Roodman, Jonathan Morduch, Thomas Dichter and Milford Bateman, agree on one thing: After 35 years of Microcredit there is no evidence that Microcredit lifts millions out of poverty."

The Norwegian version of the film will soon be followed by an international version which will also contain interviews from the Indian state of Andhra Pradesh, where numerous reports of suicides amongst loan takers have spread around the world and have questioned the benefits from microcredit.

Yunus, the darling of the western media credited with pioneering the global microlending revolution, in his defence, says Grameen's board boasts nine women who represent the borrowers. His detractors say he does things his own way.

Critics put the stunning loan recovery rate of nearly 98 percent down to the harassment of villagers from the debt collectors. Some argue that people can quickly sink into a cycle of debt, with many lenders charging exorbitant rates of interest.

Dr Qazi Kholiquzzaman Ahmad, chairman of PKSF, a body that monitors microfinance, describes microcredit as a "death trap" for the poor.

Ten years after the Norwegian ambassador questioned Yunus over his handling of funds, he complained of foul play over who controls grameenphone when in December 2006,a few days before receiving the Nobel Peace Prize in Oslo, he publicly attacked Norwegian telecoms giant Telenor, the majority owner of the leading mobile-phone service provider. He said he had been considering legal action to wrest full control of the joint-venture.

He said he believed Telenor was sucking profits from the poor of Bangladesh.

(1 US dollar = Tk 70)

Wednesday, December 1, 2010

DBP looks into merger with Land Bank

DBP looks into merger with Land Bank

Monday, 29 November 2010 00:00

BY LAILANY P. GOMEZ REPORTER

THE Development Bank of the Philippines (DBP) is crafting a feasibility study on a possible merger with fellow state-owned firm Land Bank of the Philippines. Leonora Fernandez, DBP head of corporate communications, said the Department of Finance (DOF) has asked the lender to submit a position paper for a possible merger scenario of the two government financial institutions.

“But it will still be subject to a lot of discussions with the LandBank and DOF, plus meetings with Congress. Other than that, we can’t say anything at this time,” she said in a text message.

Finance Secretary Cesar Purisima said earlier that economic managers are looking at reviving the proposed merger of the two state-owned banks as part of the streamlining effort of the Aquino administration.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. said in a text message that monetary authorities “have not been formally informed of such plans.”

Rep. Danilo Suarez of the Third District of Quezon had filed House Bill 3258 to merge LandBank and DBP. The bill, however, had been pending before Congress since it was filed early 2008.

Suarez had said in the explanatory note of his bill that the increase in asset and resource base of various commercial banks should be a signal for state-owned lenders to consolidate and beef up their financial positions.

As the bill provides, LandBank and the DBP will be merged, with the former as the larger bank ending up as the surviving entity.

Data from BSP showed that as of June 30 this year, LandBank ranked fourth in the industry in terms of assets, deposits, capital and loans, while DBP ranked sixth, 12th, fifth and ninth, respectively.

A merger therefore may catapult the combined entity to the top three. Banco De Oro Unibank, Metropolitan Bank and Trust Co., and Bank of the Philippine Islands hold the top three positions.

LandBank earlier raised a possible merger with DBP to strengthen its assets and capital.

Analysts had said combining DBP and LandBank would give the government more leverage in pushing private sector banks to merge, adding that the merger of the two state-owned lenders would set an example.

They said the balance sheet structures of DBP and LandBank are major consolidation factors.

LandBank caters to the farming sector, while DBP is into developmental lending.

The central bank has been egging on lenders to merge to strengthen their balance sheets in preparation for new international capital adequacy standards.

According to the BSP, a healthy financial system should have less than 10 lenders.

Toward a stronger rural banking industry

Toward a stronger rural banking industry

Thursday, 02 December 2010 00:00

In raising the capital requirement on rural banks, the BSP noted that it was the right time to do it and that the last time such an increase in capital requirement was way back in December 1999. It noted the prevailing capital requirements were no longer adequate to sustain competitive and robust banks.
A tougher challenge awaits rural banks when the Revised Risk-Based Capital Adequacy Framework for thrift, rural, and cooperative banks takes effect at the start of 2012 after the Monetary Board approved deferring the measure from Jan. 1, 2011.

The framework would subject thrift, rural, and cooperative banks, which are not affiliated with bigger universal and commercial banks to higher capital adequacy standards under the Basel 1.5 rules—which are less stringent than the Basel 2 imposed on commercial banks and their subsidiaries.

Basel 1.5 requires rural, thrift and cooperative banks to set aside funds for risks out of the ordinary such as fraud, system failures, and natural calamities.

The framework also provided for a higher 150 percent risk weight on banks’ real and other properties acquired to be implemented over three years, or until 2014 which is aimed at reducing the level of non-performing assets of banks.

It would also require banks a 12 percent of gross income provision for operational risks to be staggered over a three years, to 4 percent starting 2012, 8 percent starting 2013 and 12 percent by 2014.

Likewise, thrift, rural, and cooperative banks would be required to disclose to the BSP the components of its capital provisions applied to credit, market, and operational risks; and total and tier 1 capital adequacy ratios.

The Monetary Board agreed to defer the implementation of Basel 1.5 on rural banks through the intercession of RBAP that worked extra hard to allow its members breathing space from the tighter regulatory requirements.

The RBAP during its meetings with the BSP on Basel 1.5 made clear that it fully agreed with the requirement regulator’s vision to strengthen the local banking industry through tougher requirements but that this should be phased in over time to allow banks to adjust to the new capital buildup.

The BSP, nevertheless, recognizes the underlying strength of the rural banking industry the reason for its confidence on countryside banks’ capability to assume tougher requirements.

A robust rural banking industry concerns not only the regulators but more so with rural banks.

Lower housing loan rates from SSS

Lower housing loan rates from SSS

To help Filipinos whose homes were damaged by the recent onslaught of tropical storm Ondoy last , SSS reduced loan rates for home repairs and improvements.

The reduced rates for SSS is now at 9%, from a previous 13% per annum. The maximum amount of loan that can be availed is P300,000 and payable up to 20 years.

“We lowered the interest rate as a special consideration to our members whose homes were damaged by the storm that brought widespread floods in Metro Manila and other provinces last weekend,” SSS president and chief executive Romulo Neri said.

The loan may be used by members for major repairs, extension and expansion, construction of concrete fences and steel gates, and for installation of deep well and motor pumps. Collateral accepted are a first mortgage on the lot and house to be repaired or improved, or a joint mortgage with SSS-accredited bank.

Neri said that they have liberalized their policy, allowing members to avail of the even if they are already have existing house repair and improvement loans. However, the total of their existing loan the new loan should not exceed the P300,000 limit.

Qualified to apply for the loan are active members with at least 12 months of continuous contributions, or a minimum total of 24 monthly premiums. They can be paid either through salary deductions (for employed members) or through issuance of post-dated checks (for self-employed and voluntary members).

Saturday, December 4, 2010

Thursday, December 2, 2010

Friday, December 3, 2010

Thursday, December 2, 2010

How call center agents can double their income

Why Philippines has overtaken India as world's call center capital

PIA Press Release 2010/12/01

Globe, rural banks to distribute cash for Philippine CCT

Wednesday, December 1, 2010

PIA Press Release
2010/12/01