PHILDEVFINANCE (old news)

Thursday, March 8, 2012

E-vehicle backers call for incentives

THE GOVERNMENT must catch up with electric vehicle developments by
lifting the tax burden on investments in the green transport sector,
industry leaders yesterday said.

Government policies and programs, said speakers at a conference
organized by the Institute for Climate and Sustainable Cities (ICSC),
are also key to spurring consumers and public transport operators to
convert from fossil fuel-powered vehicles, which in turn will cut down
carbon emissions.

"The government is two steps behind in helping the electric vehicles
sector ... What we need from the government is a serious partnership,"
said Yuri P. Sarmiento, E-Jeepney Transport Corp. CEO.

He cited the lack of support infrastructure, inadequate policies,
manufacturing constraints, and low social acceptance as barriers to the
growth of the alternative fuel vehicle (AFV) sector.

The government, Mr. Sarmiento said, can help by supporting a bill
designed to give incentives to both electric vehicle makers and owners.

"We are not asking for the government to subsidize the cost of the
electric vehicles," he said.

Senate Bill 2856 is seen to bring down the cost of electric jeepneys,
for example, by at least 20% by offering nine-year excise tax and duty
exemptions to AFV assemblers and parts producers as well as importers of
completely built AFVs.

The proposed bill will also exempt them from paying value-added tax on
raw materials, spare parts, components and capital equipment used in the
production of AFVs for nine years.

"An electric jeepney costs around P700-800,000 after all the taxes, but
without taxes, it can be brought down to P400-500,000, which is the cost
of a new fuel-engine jeepney," Mr. Sarmiento claimed.

Owners of electric vehicles, meanwhile, under the bill will enjoy
priority registration and franchise applications, exemption from the
number-coding scheme and free parking spaces in select establishments.

"It's a question of policies and incentives for developing the
technology for electric vehicles. In the UK, we have free charging
zones, so that's a 100% discount for consumers right there," said Garett
Emmerson, chief operating officer of Streets and Traffic for London, in
detailing the experience in Britain.

E-jeepneys, while requiring a hefty initial investment, will help
drivers and operators of the public transport save money in the long term.

Fully charging the batteries for a 100-kilometer run will only cost
P160-220, yielding a P12-P16,000 savings per month by eliminating fuel
consumption, Mr. Sarmiento said.

"If you think about it, the savings from one month can send one child to
school. That will help a lot of jeepney drivers with families," he claimed.

--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline Phones: +63495010127 and +63495762924
Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com
CONSULTING - http://www.carlosani.com
My News Clippings - http://www.myclipps.posterous.com
Family website: http://www.anifamily.net
------------------------------------------

Wednesday, March 7, 2012

PNB-Allied Bank integration seen in 18 months

By: Doris C. Dumlao

Philippine Daily Inquirer

Wednesday, March 7th, 2012

Philippine National Bank and Allied Bank expect to complete their full
integration within the next 18 months, creating the country's
fourth-largest private bank and generating more than P1 billion in
yearly cost savings for the banking unit of tycoon Lucio Tan.

Shareholders of both PNB and Allied Bank on Tuesday approved the revised
terms of the merger via a share-for-share swap transaction, a union
where PNB will be the surviving entity.

In a joint PNB-Allied Bank briefing, PNB chairperson Florencia Tarriela
said that for PNB, 2011 was better than the previous year, with the bank
growing its profit by about 20 percent year on year.

"It should be a much better this year (2012)," Tarriela said, even while
the bank had to work hard on its integration with Allied Bank.

"It's like building a house. There are some things you need to work on,"
she said.

The two banks assured their respective stockholders that the synergies
arising from the broadened network, diversified deposit base and
improved scale would benefit shareholders.

After obtaining approval for the revised merger terms, PNB president
Carlos Pedrosa told shareholders that PNB-Allied Bank would next work on
getting the approval from the regulators—the Bangko Sentral ng
Pilipinas, Securities and Exchange Commission, Philippine Stock
Exchange, Bureau of Internal Revenue and Philippine Deposit Insurance
Corp. The effectivity of the merger would be the first day of the month
following the approval by the SEC, he said.

The combined entity will have a distribution network of 646 branches
nationwide and total assets of P514 billion, the fifth-largest among
local banks (including Land Bank) and the fourth among privately owned
lenders. It will also have the largest international footprint across
the Asia-Pacific region, Europe, the Middle East and North America. PNB
also aims to regain leadership in the remittance business, Pedrosa said.

Allied Bank president Anthony Chua, who heads the integration of the two
banks, said full integration would likely happen in 18 months.

PNB senior executive vice president Carmen Huang said the group was
expecting to save some 8-10 percent of the combined expenses of the
bank, translating to more than P1 billion per year, once full
integration is achieved.

In a report to shareholders, PNB said savings would be generated from
"branch re-engineering, economies of scale, consolidation of overlapping
systems and corporate indirect overheads, realignment of front offices
and optimization of back office processing and support functions."

The target is to reduce the cost-to-income ratio to at least 50 percent
from the 61 percent ratio at present, Huang said.
Chua said the combined entity would likely end with a manpower of 7,000
to 8,000. At present, PNB has around 5,200 employees while Allied Bank
has 3,800.

Part of the manpower reduction will be covered by natural attrition,
Chua said, noting that in both banks' hiring program, they had already
considered the forthcoming merger.

Pedrosa also said the merger would be done in a way that would have
"minimal impact on employees."
In terms of business mix, the union will beef up the group's lending
portfolio for small and medium enterprises (SMEs), Chua said. At
present, about 40 percent of PNB's lending portfolio is devoted to
top-tier corporations, 20 percent to the government sector and the
remainder to consumers and SMEs.

All the issued and outstanding common shares of Allied Bank will be
converted to common shares of PNB at a ratio of 130 PNB common shares
for each issued Allied Bank common share. All the issued and outstanding
preferred stock of Allied Bank will also be converted to PNB common
shares at a ratio of 22.763 PNB common shares for each issued Allied
Bank preferred share.
To be able to do this, PNB shareholders approved the reclassification of
its 195.17 million authorized preferred shares into common shares
thereby increasing its authorized common stock to 1.25 billion.
Thereupon, the bank will issue 423.96 million new PNB common shares out
of its authorized and unissued capital stock to be valued at P70 per
share to swap for the outstanding Allied Bank common shares and
preferred shares.

ING acted as financial adviser to the majority shareholders of PNB and
Allied Bank for this merger.

Saturday, March 3, 2012

Landbank loans to farmers rise 25%

By Louella D. Desiderio (The Philippine Star) Updated March 03, 2012
12:00 AM Comments (0)

MANILA, Philippines - Loans extended by state-run Land Bank of the
Philippines to farmers and fisherfolk rose 25 percent in 2011 amid
continued efforts to make credit more accessible to the sector.

The bank said in a statement yesterday that it released a total of P40.5
billion worth of loans to small farmers and fisherfolk last year, up
from the P32.3 billion provided in 2010.

"We intensified our support to small farmers and fisherfolk by
continuously expanding our reach and making credit available to the
marginalized sector," Gilda Pico, Landbank president and chief executive
officer, said.

The bank said more than 900,000 small farmers and fisherfolks benefited
from the credit assistance extended last year.

The loans, Landbank said, were released through 979 cooperatives and 367
countryside financial institutions.

The bank said loans to support crop production reached P20.9 billion
last year, climbing 17 percent from the P17.9 billion released in 2010.

The bank noted that loans for palay production in particular amounted to
P15.5 billion last year, 20 percent higher than the P12.9 billion
provided in 2010.

Marketing loans, it said, reached P12.9 billion last year, up 52 percent
from P8.5 billion in 2010.

Landbank said farmers and fisherfolks in Central Luzon accounted for the
bulk of loan releases to the sector which amounted to P9.6 billion,
while Cagayan Valley came in second, receiving P5.7 billion.

Central Visayas received the third biggest share of loans for the sector
which received P4.4 billion, while Northern Mindanao had the fourth
largest share with P3.8 billion.

Fund offered for business expansion, social dev’t

Fund offered for business expansion, social dev't

STATE-RUN SOCIAL Security System (SSS) has set aside some P7 billion for
private enterprises to finance their business expansion and social
development-related projects.

In statement released on Friday, the pension fund for private employees
said the fund us under its Business Development Loan Facility (BDLF) and
Social Development Loan Facility (SDLF).

"The new SSS lending facilities will enable us to offer financial
assistance to a wider range of projects and borrowers," SSS President
and Chief Executive Officer Emilio S. de Quiros, Jr. was quoted as
saying in the statement.

"Cooperatives, non-government organizations and even barangay micro
business enterprises or BMBEs can borrow," he added.

This move by SSS will help boost employment and spur the country's
economic growth, Mr. de Quiros further said.

The agency also noted the following

• Micro, small and medium enterprises and large industries can tap the
BDLF while social institutions offering education and training programs;
health care and medical services can seek for financial assistance from
the SDLF.

• Eligible borrowers are employers who are registered with the pension
fund. They must be in good credit standing with the SSS, or with no past
due contributions and loan payments.

• The maximum loanable amount is P500 million, but the amount to be
released by the pension fund depends on the "project's actual need and
the borrower's credit capacity."

• Borrowers can choose to pay in a monthly, quarterly, semi-annual or
annual basis for up to 15 years.

SSS said the fund will be allocated per sector as follows: P1 billion
for agriculture, fishing and forestry; P2 billion for construction,
manufacturing, utilities, mining and quarrying; and P4 billion for services.

"The interest rate will depend on prevailing market rates. Borrowers
have a one-time option to switch from a variable interest rate, which is
repriced every six months, to a fixed rate that applies for a period of
three years," Mr. de Quiros said. -- ARRG

BSP to launch CSF for small traders

By: Michelle V. Remo
Philippine Daily Inquirer

1:24 am | Saturday, March 3rd, 2012

The Bangko Sentral ng Pilipinas has announced the creation of a new
credit surety fund (CSF) to boost micro small and medium enterprises
(MSMEs) in the country.

With the establishment of CSFs, low-income traders will get as much
chance as the high-income ones to expand their businesses and increase
their profits, the central bank said.

CSF is a pool of money contributed by cooperatives, local government
units, state-owned banks, and other entities, which will serve as
collateral for MSMEs trying to secure bank loans.

The BSP will take the lead in organizing CSFs in various parts of the
country.

According to the regulator, MSMEs usually find it difficult to secure
bank loans because most lack assets that can serve as collateral. CSF
will ease an MSME's access to bank loans.
The CSF in Capiz will be formally launched on March 7. This is the 21st
CSF in the country.
The central bank said it would spearhead the creation of more CSFs over
the short term to spur economic activities in the countryside.
"The CSF program is expected to increase lending activities, as well as
stimulate business and economic activities, generate employment, and
increase the local government's revenues," the BSP said in the statement.
MSMEs account for over 90 percent of enterprises in the country. They
also account for over 70 percent of employment.
Their problem on access to bank loans, however, was cited as a major
hindrance to the development of that sector.
The improved access to loans and other financial services in the country
is one of the key measures that the BSP believes will be crucial to
achieving "inclusive" economic growth.
Developmental institutions, including the World Bank and the Asian
Development Bank, have urged the Philippine government to strive for
inclusive growth—one that benefits even the low-income sector.
This, they said, would be vital in reducing poverty specially in the
countryside.
The developmental institutions credited the Philippines for maintaining
a steady pace of economic growth over the years, even during the height
of the global economic crisis in 2009. But they have also aired their
concern that growth in the country has not trickled down to the
low-income groups.
Poverty incidence in the Philippines, as of 2009, stood at 26.5 percent
of the country's population, according to the latest statistics.

Wednesday, February 29, 2012

BSP approves merger of 3 co-op banks

By Lawrence Agcaoili (The Philippine Star)
Updated February 29, 2012 12:00 AM Comments (0)

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given
the green light for the merger of three cooperative banks in Mindanao as
part of the efforts of the bank regulator to support the development of
a stronger cooperative banking sector in the country.

The BSP approved the consolidation of the First Community Cooperative
Bank of Misamis Occidental, Cooperative Bank of Davao del Sur, and
Cooperative Bank of Surigao del Sur last Feb. 16.

The three merged banks is owned and controlled by First Community
Cooperative – a primary cooperative based in Cagayan de Oro City.

The new entity would be called Consolidated Cooperative Bank and would
assume all the assets and liabilities of the three constituent
cooperative banks.

"The plan of consolidation was a collective agreement of the common
shareholders of the three banks in their desire to strengthen the
financial position and operating efficiency of their respective
cooperative banks with the intent to become a relevant player in the
socio-economic development of Mindanao," the BSP said.

Late last year, the BSP together with state-run Philippine Deposit
Insurance Corp. (PDIC) launched a coordinated incentive program known as
the Special Program for Cooperative Banks (SPCB) to support the
development of a stronger cooperative banking sector in the Philippines.

The BSP is actively promoting mergers, consolidations and acquisitions
of cooperative banks as a means to promote larger and stronger
institutions whose more solid capital position and wider branch network
would enable them to deepen their reach in the countryside.

The program would also spur lending activities in the unbanked and the
underserved areas, and eventually uplift the economic condition of the
people residing in these communities.

As part of the incentives, Consolidated Cooperative Bank would be
allowed to establish branches or offices in major cities and towns of
Mindanao.

After its launching, the program immediately lured Rabobank Group of
Netherlands and DGRV - Deutscher Genossenschafts- und Raiffeisenverband
E. V. of Germany that have expressed strong interest in venturing into
the local cooperative banking industry either through technical
assistance or financial assistance.

Data from the BSP showed that there are 40 operating cooperative banks
in the country with resources aggregating P16.4 billion as of
end-September last year.

Sunday, February 26, 2012

BSP Closely Monitors Agri-Agra Lending

February 26, 2012, 11:34pm

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said it has
developed a new reportorial system to ensure that banks, especially
those accredited as rural financial institutions (RFIs), are exercising
prudence and due diligence in lending to the agricultural sector as
alternative compliance to Republic Act 10000 or the New Agri-Agra Law.

RA 10000, which mandates credit to agriculture and agrarian reform
beneficiaries, has replaced Presidential Decree 717 but the law still
requires banks to set aside 15 percent of their loanable funds for
agriculture and another 10 percent for agrarian reform-related loans.

In a statement, the central bank said its new reportorial system will
closely monitor the compliance of banks under RA 10000.

Last January, the BSP required banks to submit their annual reports
under the new guidelines, which officials admit are stricter since it
limits alternative compliance. Still, the new rules would help the BSP
to identify in more detail how banks are complying with the provisions
of the law.

Banks are required to submit the revised reportorial templates every
quarter. Penalties will be slapped for the non- or under-compliance with
90 percent of fees accruing to the Agricultural Guarantee Pool and the
Philippine Crop Insurance Corp.

The creation of RFIs is just one of the alternatives for compliance
provided under the new law. The BSP said it has defined guidelines to
determine if a bank that has sought accreditation qualifies as an RFI.

"The BSP (however) reminds (banks) that its accreditation is neither an
endorsement to infuse funds to the RFI nor an affirmation of the
soundness of its operations," the statement clarified. "The
accreditation only establishes a bank's focus on Agri-Agra lending.
Financial institutions are expected to exercise due diligence and
prudence when lending, depositing or investing in RFIs."

The BSP has accredited only three rural banks so far as RFIs, these are
Rural Bank of Kiamba in Sarangani, Producer's Savings Bank in Pasig
City, and Rural Bank of Barili in Cebu.

BSP explained that accredited RFIs will be given authority to raise
funds for Agri-Agra lending by accepting wholesale loans, placements in
RFI special accounts, and equity investments such as preferred stocks
from other financial institutions.

"RFIs then act as direct conduits to the agriculture sector and agrarian
reform beneficiaries by channeling the funds specifically allotted by
other banks for the program. This gives RFIs a critical role in the
funding chain."

RFIs also eliminate the old practice of "layering", said the BSP, which
is funding through several conduits before the proceeds are received by
the targeted beneficiaries or intended projects.

The new law also listed other alternatives for banks for easier
compliance such as investments in housing and education/medical bonds
and micro businesses even if these are not Agri-Agra related.

The BSP is in charged of accrediting RFIs while the Department of
Agriculture will accredit non-bank RFIs such as cooperatives,
microfinance non-governmental organizations, among others. (LCC)

Saturday, February 25, 2012

Bangko Sentral ng Pilipinas (BSP) Tightens CAMELS, Other Requirements for Banks Offering Agricultural Microfinance Loans in the Philippines

MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas (BSP) Tightens CAMELS,
Other Requirements for Banks Offering Agricultural Microfinance Loans in
the Philippines

» Posted by Kristha Abores in Category: Asia,Regulation at 9:35 pm

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the central
bank of the Philippines, recently released a circular amending the
minimum requirements for banks offering micro-agri loans [1]. In an
effort to ensure that banks offering micro-agri loans have adequate
financial capacity, managerial and technical capabilities to offer the
product, BSP now requires that the banks must have a CAMELS rating of at
least 3, a management score of at least 3 and a capital adequacy ratio
of at least 12 percent. (CAMELS ratings assess a bank's overall
condition through an evaluation of the following components: Capital,
Asset quality, Management, Earnings, Liquidity and Sensitivity to market
risk.) In addition, the banks must not be under the "Prompt Corrective
Action Program," which addresses capitalization problems or other
concerns. Banks must also have no arrearages on their
microfinance-related borrowings from the central bank or other
creditors. [2]

Micro-agri loans are short-term loans with tenor of up to 12 months and
weekly, semi-monthly or monthly payment terms. The loans, which have a
cap of PHP 150,000 (USD 3,500), are used primarily for farm activities,
agri-business or agriculture-related fixed assets. Loans are granted to
borrowers who have engaged in farm activities for at least two years but
also have non-farm income. [2].

Since 2007, when micro-agri loans were introduced through a three-year
testing phase, banks reportedly have lent approximately PHP 500 million
(USD 11.7 million) in micro-agri loans [1].

By Kristha Abores, Research Associate

Friday, February 24, 2012

Banks’ capital ratios stumble

Banks' capital ratios stumble

PHILIPPINE BANKS remained strongly capitalized in the second quarter
last year but their capital adequacy ratios (CARs) slipped from the
previous quarter amid higher risk weighted assets, such as money it has
lent out.

The Bangko Sentral ng Pilipinas yesterday said in a statement the local
banks' CARs stood at 16.34% on solo basis and 17.25% on consolidated
basis as of end-June 2011.

"The [CARs] of the Philippine banking system remained within a tight
range of 16% to 17% despite global difficulties," the BSP said.

CAR indicates how much capital a bank has in relation to its risk
weighted assets. It provides a measure of a bank's financial strength.

Solo basis covers a bank minus subsidiaries, while consolidated basis
adds a bank's subsidiaries.

The CAR levels at end-June 2011 however, were lower than the levels
recorded as of end-March last year, which was 16.48% on solo basis and
17.39% on consolidated basis, the central bank said.

"The ratios ... declined from the previous quarter but this was due to
increases in risk weighted assets outpacing the growth in banks
capital," the BSP said.

Moreover, Tier 1 or core capital ratios remained high at 13.90% and
13.93% on solo and consolidated basis, respectively, the BSP said.

Banks' CAR exceeded the central bank's 10% minimum requirement and the
Basel Accord's 8% standard.

The BSP said qualifying capital increased by 2.4% quarter-on-quarter to
P762.9 billion on solo basis and by 2.7% to P837.4 billion on
consolidated basis.

"[The growth was] mainly due to net profits posted by banks and
additional issuances of capital instruments qualifying as lower Tier 2
capital," the central bank said.

Meanwhile, risk weighted assets rose by 3.3% quarter-on-quarter to P4.67
trillion on solo basis and by 3.6% to P4.854 trillion on consolidated basis.

As of June last year, universal and commercial banks had a CAR of 16.31%
on solo basis and 17.32% on consolidated basis, down from 16.42% on solo
basis and 17.42% on consolidated basis as of March 2011, the same BSP
statement showed.

The CAR of thrift banks, on the other hand, also slid to 15.53% as of
June last year from 16.11% as of March last year, on both solo and
consolidated basis.

CARs of rural and cooperative banks improved to 18.68% in the second
quarter of last year, from 18.6% in the previous quarter on both solo
and consolidated basis as well. -- Kathleen A. Martin

Wednesday, February 22, 2012

Ayala Land moves to comply with ownership rule

PROPERTY DEVELOPER Ayala Land, Inc. has moved to reduce foreign
participation in the company by restructuring its capital in light of a
stricter interpretation of equity limits.

In a disclosure, the company said its board of directors, following a
regular meeting on Monday, approved a rights offer -- consisting of
13.043 billion voting preferred shares -- "in order to comply with the
regulatory requirement on Filipino ownership following the Supreme
Court's recent ruling…".

The high court last year ordered the Securities and Exchange Commission
(SEC) to refer to a firm's voting shares in applying the
constitutionally-mandated 40% foreign ownership cap, as opposed to
outstanding capital stock that includes preferred, non-voting shares, in
a case involving Philippine Long Distance Telephone Corp. (PLDT).

Ayala Land said it did not violate the foreign equity cap even under the
stricter interpretation of the rule but preferred to give itself a wider
buffer.

"Right now, foreign-owned voting shares number 38% as of end-January and
we're targeting a 19% foreign ownership after the issuance," Ayala Land
investor communications and compliance head Pamela Ann T. Perez told
BusinessWorld.

"We're not in violation of anything but we're already very close to the
40% cap. It's always better to have leeway for foreign ownership. There
are a lot of foreign funds investing in Ayala Land. And the only reason
we're doing this is in light of the Supreme Court ruling on foreign
ownership," Ms. Perez said in a telephone interview.

The board agreed to buy back and then retire 13 billion outstanding
preferred shares, a move that will decrease Ayala Land's authorized
capital stock by P1.3 billion. The buyback -- the bulk of the shares is
owned by parent Ayala Corp. -- will be subject to shareholder approval
at firm's annual stockholders meeting on April 18, Ms. Perez said.

Ayala Land then plans to reclassify unissued preferred shares to voting
preferred shares, 13.043 billion of which will be made available via a
rights offer to common stockholders "under the same basic terms as the
outstanding preferred shares", it said without citing prices.

The Supreme Court ruling cited by Ayala Land was in response to a case
filed against index heavyweight PLDT, whose shares were reportedly in
violation of the foreign equity limits.

PLDT has similarly moved to redeem preferred shares ahead of plans to
sell 150 million new voting stocks to reduce its foreign equity level to
36% from 64%, according to previous reports. Mediaquest Holdings, Inc.,
a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake
in BusinessWorld.

Ayala Land, meanwhile, went on to disclose that its board had also
approved the issuance of P15-billion worth of corporate bonds, with
tenors of seven and 10 years. Proceeds will be used to fund part of this
year's P37-billion capital expenditure.

The company also announced the issuance of regular first semester cash
dividends worth 11 centavos per common share. The cash dividend will be
payable on March 27 to shareholders on record as of March 7.

Shares of Ayala Land plunged by 3.72% to P20.70 apiece yesterday. --
F.J.G. de la Fuente

Monday, February 20, 2012

Teacher, business loans push ONB capital to P2.5 billion

MONDAY, 13 FEBRUARY 2012 20:17 MANUEL T. CAYON / REPORTER

DAVAO CITY—Increased loans among public-school teachers and business
owners pushed the net capital of One Network Bank (ONB) to P2.5 billion,
higher than the operating capital required of commercial banks.

But just like in the past when ONB declined to graduate into a thrift
bank when it also surpassed the capital requirement on commercial banks,
Alex B. Buenaventura, ONB president, said the bank would retain its
status as a rural bank to continue providing affordable and modern
banking services and to allow farmers and small entrepreneurs in the
countryside to access the banking system.

Most of its depositors also bulked up its intermediation ratio to nearly
1:1, further attesting to the attraction of rural banking among the
previously unbanked sectors of society, Buenaventura said.

ONB posted a net comprehensive income of P428 million last year, another
record 38-percent increase over its previous year performance of P311
million.

"With this record income, the widest and most modern rural bank's net
worth or net capital reached P2.5 billion, now exceeding the
P2.4-billion minimum capital required of commercial banks," Buenaventura
said.

The increase in its loan portfolio contributed to the surge in its net
income. The ONB posted a 72-percent increase, from P6 billion in 2010 to
P10.4 billion by the end of last year, with the biggest portfolio
increase coming from Mindanao government teachers.

The Department of Education has an existing agreement with ONB to enroll
its teachers in the loan program called DepEd Automatic Payroll
Deduction System (DepEd-APDS) Salary Loan Program.

As of end-2011, ONB's exposure to 48,467 DepEd teachers reached P5.9
billion "for a whopping 109-percent increase over year 2010," the ONB
statement said.

Business loans extended to small and medium enterprises (SMEs)
contributed the next higher account, which increased the portfolio
volume by 78 percent, from only P800 million to the P1.4 billion by
end-2011.

"This upsurge in lending increased ONB's loan intermediation ratio to
almost 1:1 [P10.4 billion loans: P10.5 billion deposits]," the statement
added.

Despite the elevated status in terms of financial income, Buenaventura
said the ONB would not convert to a commercial bank "principally because
of the lower 3-percent legal reserves required by the BSP [Bangko
Sentral ng Pilipinas] from RBs [rural banks] as against the 20-percent
legal reserves for [commercial banks]."

On its deposit liabilities reaching P10.5 billion, the ONB said this
represented an increase of 11 percent from the 2010 level of P9.4 billion.

He said the lower cost current account and savings account (CA/SA)
contributed 64 percent in total deposits, a significant part of which
came from the 360,000 PeraAgad Pinoy ATM cardholders. ONB traces the
popularity of this account to the lower opening deposit and maintaining
balance of only P100.

"This makes this convenient and affordable product very popular among
the small accounts especially in countryside areas all over Mindanao
where ONB is in most cases the only provider of ATM machines," the
bank's statement said.

The ONB now has total resources of P15.7 billion, also a big 33-percent
increase over the P 11.8-billion level in 2010.

"Our capital adequacy ratio remains very healthy at 20 percent, with the
NPL [nonperforming loan] ratio at 5 percent and the NPA [nonperforming
asset] ratio at four percent as of end-2011," the bank statement said.

Buenaventura said ONB is the widest private banking network in Mindanao
with 82 branches. It is also the most modern rural bank with a fleet of
114 PeraAgad ATMs and with the introduction of the new Internet banking
service now undergoing pilot testing.

Sunday, February 19, 2012

British Embassy accepting bids for 2012-13 projects

Jun, I saw this news article today. Maybe we can apply for these grants.
caloy

British Embassy accepting bids for 2012-13 projects

Published : Sunday, February 19, 2012 02:47 Article Views : 41 Written
by : RANDOM JOTTINGS

THE British Embassy is calling on interested parties to submit proposals
for projects under the UK Government's Prosperity Fund, Human Rights and
Democracy (HRD) Fund and the Bilateral Program Budget (BPB) in 2012-2013.

"We are very keen to support a range of projects to run from April
2012-March 2013. We want to identify innovative one-year projects that
will address important issues in the areas of human rights, economic
reform, climate change and peace building. If you have a good idea,
please do share it with us," said Trevor Lewis, Charge d'Affaires at the
British Embassy in Manila.

The concept bidding round for projects under the Prosperity Fund is now
open. Previously successful project bids have ranged in size from
$13,000 to $100,000, and the preference is for projects with a regional
impact that necessitates funding towards or beyond the given upper range.

Economic issues in the following fields will be prioritized: promoting
public private partnerships; combating corruption and bribery; improving
education policy and outcomes; developing stable legal and regulatory
frameworks for investment; and encouraging open and equitable
multilateral trade and investment policies.

Climate change and low carbon issues in the following fields will be
prioritized: improving the business environment for low-carbon
investments; assisting policymakers design low-carbon policy frameworks;
and demonstrating practical measures that can reduce greenhouse gas
(GHG) emissions.

The deadline to submit concept bids for projects under the Prosperity
Fund is on 29 February 29, 2012.

Meanwhile, the British Embassy Manila is also accepting project
proposals to the Human Rights and Democracy Fund. This global fund has
been set at $5 million and is a flagship delivery tool for the UK
Foreign and Commonwealth Office's (FCO's) Human Rights Strategy.

The fund will focus on the following thematic areas: promotion and
protection of freedom of expression; strengthening electoral processes;
upholding freedom of religion and belief; global torture prevention;
combating discrimination against women; abolition of the death penalty;
supporting the UN Guiding Principles on business and human rights; and
support for human rights initiatives in the Commonwealth.

The deadline to submit concept bids for projects under the Human Rights
and Democracy Fund is March 1, 2012. Successful bids may be confirmed by
May, and projects are expected to begin this June and end in February 2013.

Submission of concept bids for the British Embassy's Bilateral Program
Budget (BPB) is also ongoing. The Embassy is looking to support
innovative projects to help achieve a lasting and just peace in
Mindanao, among others.

Projects that contribute to the following outcomes will be prioritized:
increased inclusiveness of the peace process where all parties of
interest are consulted and informed in an impartial manner; increased
acceptability of a peace agreement between the Government and the MILF
by decision makers and constituents; and increased numbers of effective
leaders in Muslim majority communities and/ or areas affected by
conflict in Mindanao creating impact on peace and development.

More information can be found at the British Embassy website: RLINK
"http://ukinthephilippines.fco.gov.uk/http://ukinthephilippines.fco.gov.uk

Saturday, February 18, 2012

DOST, MMDA deploy 1st locally-made water hyacinth harvester in Taguig

JANE TADILI February 18, 2012 5:59pm

The Department of Science and Technology (DOST) recently deployed the
first working prototype of its locally-made water hyacinth harvester at
the MMDA Pumping Station in Taguig. The machine was developed by
engineers of the Metals Industry Research and Development Center (MIRDC)
of DOST to address the menace of pose by waterlily swell in our waterways.

DOST Secretary Mario Montejo said that Rio Grande de Mindanao incident
last year which left Cotabato flooded for days paved the way for the
conceptualization of the harvester machine.

The water hyacinth harvester is a small-sized vessel that mechanically
collects free-floating water hyacinths that congest waterways.

The vessel basically "harvests" hyacinths by way of three linked
conveyors (rotating plastics that move materials) at its front, middle
and rear. The front conveyor is dipped under the water surface at a
certain angle, which allows the harvester to collect whole pieces of
hyacinth. The middle conveyor, on the other hand, serves as a temporary
storage for the harvested plants. The storage contents are then
discharged to an external barge or a specific dumping site by the rear
conveyor when full. The harvester's anterior also has built-in cutters
to avoid entanglements of plants when harvesting. Its storage, the
middle conveyor, can hold approximately 4.2 cubic meters or 250
kilograms of water hyacinth per load.

According to the engineers, the Harvester is easy to maneuver, very
stable, and travels at a speed of three kilometres per hour on water by
way of two paddle wheels. All its mechanisms are hydraulically powered,
individually controlled, and can be operated by one person. The
harvester can finish in 20 days at 8 hour work per day a one hectare of
waterlily infested body of water.

Montejo said that the machine can be built on a bigger or smaller scale
depending on the need or the size and body of water. "Since this is a
working prototype, the DOST is very open to the adoption of the
technology and also the improvement of the equipment," Montejo added.

Corazon T. Jimenez, Undersecretary and General Manager of Metro Manila
Development Authority (MMDA) said that she expects the harvester to be
more cost-efficient than the backhoes mounted on barges which the MMDA
currently using to declog the metro waterways. Also, hearing from Sec.
Montejo that DOST is building 10 more harvester this year, Usec Jimenez
said that she expects one harvester to be permanently stationed in Pasig
River to collect hyacinths that flow from the Marikina River.

Taguig City Mayor Lani Cayetano lauded DOST and MMDA for choosing the
City of Taguig as their pilot site in the testing and demonstration of
another innovative and breakthrough project. "This machine solves the
problem of the tedious and time consuming manual harvesting of water
hyacinths that have clogged our waterways."

Notorious for its association with dirty river water, the water hyacinth
can actually be a very good raw material for a wide range of products
that communities can profit from. Among these products are handicrafts,
pieces of furniture, and table wares. Just recently, the Philippine
Textile Research Institute (DOST-PTRI) held a fashion show showcasing
fabrics from indigenous textiles like the water hyacinth.

Meanwhile, DOST said that it will continue to develop several
technologies that specifically use water hyacinth such as biogas, animal
feeds, and geotextiles that prevent soil erosion.

The machine harvester is a collaboration between DOST-MIRDC and the
Project Management Engineering and Design Service Office, with funding
of the Philippine Council for Industry, Energy and Emerging Technology
Research and Development. — TJD, GMA News

Full article is found in:
http://www.gmanetwork.com/news/story/248544/scitech/science/dost-mmda-deploy-1st-locally-made-water-hyacinth-harvester-in-taguig

Friday, February 17, 2012

BSP tightens bank criteria for micro-agri loans

THE BANGKO SENTRAL ng Pilipinas (BSP) has tightened requirements for
banks interested in offering micro-agri loans in a bid to weed out "weak
banks," according to the central bank's Circular No. 748 published
yesterday in this newspaper.
The circular, dated Feb. 13, amended the central bank's Manual of
Regulations for Banks.

Cleansing

A micro-agri loan -- involving amounts of as much as P150,000 and good
for 12 months -- is designed to support farming activities,
agri-business and other agriculture-related activities.

"Additional pre-qualifications on banks were introduced to screen out
weak banks from the program," BSP Deputy Governor Nestor A. Espenilla,
Jr., said in a text message yesterday.

According to the new circular, banks that plan to offer micro-agri loans
must comply with a number of new requirements, namely:

• CAMELS rating of at least "3" and a management score of at least "3";

• capital adequacy ratio of not lower than 12%;

• no major supervisory concerns that would warrant initiation of prompt
corrective action under existing regulations; and

• No arrearages on microfinance borrowings (bills payable) from BSP or
other creditors.

The CAMELS rating system measures a bank's capital adequacy, asset
quality, earnings, liquidity and sensitivity to market risk. Scores
range from 1 for best and 5 for worst.

Non-compliance

BSP said banks found non-compliant will be given a chance to submit a
"viable plan" to correct its deficiencies.

However, if non-compliant banks still fail to align with the new
requirements after examination, authority to offer micro-agri loans will
be suspended, BSP said in the circular.

Procedure

One examination cycle, BSP said, is defined as the period from the exit
conference of the last general examination until the exit conference of
the following general examination.

The central bank added that no other micro-agri products should be
introduced by banks without BSP approval.

In January 2010, the central bank introduced micro-agri loans in a bid
to facilitate access to financing by small famers and other agricultural
workers, a segment that was formerly deemed high credit risk by banks.

Those interested in applying for micro-agri loans for the first time
should have been involved in farming activities for at least two years
prior to application, while existing borrowers should have good track
record of payments, central bak regulations state. -- K. A. Martin

Thursday, February 16, 2012

AUB buys Asiatrust’s banking business

AUB buys Asiatrust's banking business

ASIA UNITED Bank (AUB) has acquired the banking business of Asiatrust
Development Bank, Inc. (Asiatrust) after the board of directors of both
companies approved the transaction, a disclosure to the stock exchange
on Wednesday said.

In its disclosure, Asiatrust said: "AUB and Asiatrust wish to announce
they have entered into an agreement for AUB to acquire the banking
assets and assume the banking liabilities of Asiatrust."

The acquisition, however, excludes the trust business of Asiatrust.

The disclosure also said the sale is still subject to regulatory and
Asiatrust shareholders' approval.

"The acquisition is targeted to be finalized within the first half of
the year," Asiatrust said.

Under the deal, Asiatrust's 28 branches -- all in Luzon -- will be
absorbed by AUB, whose branches will increase to 100.

"Acquisition of the Asiatrust banking business will allow us to deliver
the AUB brand of service commitment and excellence to more clients
within a short period of time. We look forward to serving Asiatrust
clients soon," the disclosure quored AUB President Abraham T. Co as saying.

"We are happy to entrust our customers to a strong, highly profitable
and growing bank, which has a proven track record in operational
intergration and is at the forefront of enhancing customer service
experience," Asiatrust Vice-Chairman Roland M. Garcia said in the same
statement. "We will work closely with AUB towards a smooth transition."

For his part, Dionisio C. Ong, president and chief executive officer of
Asiatrust, was quoted as saying: "We are confident that AUB will be able
to serve our customers and depositors with the same top-quality service
that our clients had been accustomed to more than 50 years."

"The integration of Asiatrust into AUB will allow our customers to
access a wider distribution network and more product offering," Mr. Ong
added.

Isabelita C. Sales, Asiatrust's corporate information officer, and
Consuelo D. Garcia, country manager of ING Bank N.V. which acted as
financial adviser to Asiatrust on the deal, declined to divulge further
details.

As of end-2011, assets of AUB -- a Filipino-Taiwanese-Singaporean joint
venture -- totaled P50 billion while capital funds stood at P9 billion.

AUB bought the Cooporative Bank of Cavite last year and the Rural Bank
of Angeles in Angeles City, Pampanga in 2010. -- ARRG

Wednesday, February 15, 2012

Leyte town starts mass production of honey

By Edgar Allan Vilbar (The Freeman) Updated February 15, 2012 12:00 AM
Comments (0)

HILONGOS, LEYTE, Philippines – Apiculture, the raising of bees for
commercial production of honey, has been started in this town when the
Lamak Beekeeper's Association formally opened an apiary in Bgy. Lamak on
February 9.

The opening of the apiary was attended by Dr. Apolonio Sito, executive
director of the National Apiculture Research Training and Development
Institute, and municipal and labor officials.

Sito, who came all the way from NARTDI in Bacnotan, La Union, expounded
on the importance of bees in balancing the ecosystem by pollination.
"Bees play a major role in reforestation and plant production,
increasing plant yield and maintaining the balance of our ecosystem," he
said.

NARTDI would be supporting the endeavor of Lamak, he said, because the
institute is mandated, by Republic Act 9151, to establish apiaries for
honey and by-products, train beekeepers and apiculturists, conduct
research and extend technologies to industry stakeholders.

Mayor Jose Emery Roble shared his plans for honey production in his
town. "It is always my objective to have a healthy community, so I
instructed the municipal health department to reduce orders of synthetic
medicines and do more research on the potential of honey as natural
vitamin and cure especially for women and children."

Roble said he was confident that LBA could deliver the goods by May, the
scheduled first harvest of honey from 40 colonies of cultured bees.

LBA president Jeffrey Mendoza, also the lot owner of the apiary site,
said the mayor earlier sent him to Bohol for training on apiculture.

DOLE senior labor employment officer Rosalinda Betuin, for her part,
told LBA members that the agency supported honey production enterprise
by extending funds to it, and assured them of more support through the
community enterprise program.

Monday, February 13, 2012

Thrift, co-op banks’ bad loan ratios improve, but rural banks worsen

Thrift, co-op banks' bad loan ratios improve, but rural banks worsen

THE RATIO of thrift and cooperative banks' non-performing loans (NPL) to
their total loan portfolios improved in the first half of 2011 from the
previous year, but that of rural banks worsened, the Bangko Sentral ng
Pilipinas (BSP) said in statements over the weekend.

The NPL ratio measures the proportion of loans that have remained unpaid
for at least 30 days after due date to the total loan portfolio.

Thrift banks' NPL ratio improved to 6.18% from 7.93% ratio in the
comparative periods, BSP noted.

These banks' soured loans totaled P22.75 billion as of end-June 2011
against a total loan portfolio of P367.87 billion in that period, BSP said.

Without including interbank loans or thrift banks' loans to one another,
NPL ratio improved to 6.33% as of end-June 2011 from 6.67% the previous
year, BSP noted.

Ratio of thrift banks' non-performing assets (NPA), which take into
account foreclosed properties and NPLs, to gross assets eased to 7.52%
from 9.09%.

BSP noted that thrift banks could cover 59% of their NPLs and 37.74% of
their NPAs, both an improvement from the previous year's 53.03% and
31.91%, respectively.

Similarly, NPL ratio of cooperative banks improved in the same periods
as well, declining to 8.11% from 8.52%, BSP said in a separate statement.

Soured loans totaled P965 million against a total loan portfolio of
P11.9 billion as of end-June last year, the central bank said.

"In terms of the three main geographical regions, cooperative banks in
Mindanao posted the best NPL ratio at 5.28%, compared with cooperative
banks in Luzon and Visayas which reported NPL ratios of 8.41% and
15.46%, respectively," the BSP said.

While cooperative banks saw an increase in NPA ratio to 8.21% from
7.93%, they could cover 71.82% of their NPLs, a huge improvement from
59.15% in the previous year; and 53.07% of their NPAs, up from 45.34%,
the central bank noted.

In contrast to the first two groups, NPL ratio of rural banks worsened
to 10.42% from 9.42%, BSP said in a separate statement.

Soured loans totaled P11.23 billion against a total loan portfolio of
P107.81 billion in the first half of last year, BSP said.

These banks' NPA ratio also worsened to 11.25% from 10.55%, BSP data
showed. -- KAM

Sunday, February 12, 2012

Green Coal technology may be the answer to our energy problems

Published : Thursday, February 09, 2012 00:00 Article Views : 214

Written by : THELMA DUMPIT-MURILLO

DTI Secretary and National Price Coordinating Council Chair Gregory
Domingo will create a task force that will study how to bring down the
cost of distribution of basic goods. Domingo said that President Aquino
issued these instructions in anticipation of a possible price hike due
to the tension in Iran. The threat of a disruption in the supply of fuel
is possible if the tension escalates. As it is, the increase in prices
of canned sardines, evaporated milk, coffee and flour have been
negligible with only .26 percent to 2 percent recorded. But like a good
scout, we must be always ready for any contingency.

According to Director Ze-naida Monsado of the Department of Energy,
thirty percent of sea-borne cargo including fuel, pass through the
Strait of Hormuz. Should the problem in Iran escalate, supply will
definitely affected as well as prices. In just two weeks, we have seen
prices go up 7 times. Monsado, however, said that government is not
going to resort to gas rationing just yet. The Philippines has begun to
source part of its demand from Russia but only on a spot basis since not
all of their supply is sourced from the Pacific side. While the Middle
East can handle the situation since not all of their supply passes
through the Strait, Europe may lose around 2.2 percent of its supply
base which they source partly from Iran.

The need to discover new sources of fuel has now become imperative.
Belgian company eNext Environmental Protection and Renewable Energy were
recently in town to introduce to the country and spread the word about
their new green coal technology which provides an eco-friendly
alternative to non-renewable fossil coal fuel.

Green coal technology uses municipal solid wastes from landfills,
particularly the non-biodegradable materials such as plastics to
transform it into fuel. The solid wastes undergo a series of processes
such as grinding, fermenting, and mixing with additives and binders to
produce environment—friendly coal pellets.

Dr. Jozef Vanneuville, in-charge of the technology support and strategic
alliances of eNEXT, said that green coal technology provides a solution
to the solid waste management problem in the country. A green coal
facility can process 400-430 tons of solid waste a day, or about 150,000
tons a year and it can produce 150-200 tons of coal pellets a day or
70,000 tons a year. Each ton of coal pellets can generate 6,388
megawatts of electricity.

Green coal pellet is a better substitute for the fossil coal according
to Dr. Vanneuville because green coal pellets are brittle and can be
easily crushed with less energy than fossil coal. They also emit 45
percent lesser carbon dioxide when burned so they don't harm the
atmosphere. The coal pellets are water repellent and have a higher
caloric value which means they produce a higher amount of heat with the
least amount of fuel. Caloric value of eNEXT green coal pellets can be
customized according to the customer needs.

Green coal technology does not require large investment for
infrastructure since the technology can be integrated to existing
power—generating plants like the Sual coal-fired power plant in
Pangasinan while it may cost $27 million dollars to start a new one from
scratch. eNEXT, through its Philippine representative is offering its
services to local government units, owners of landfills and interested
investors. Ms. Sonia Floresca, representative of eNEXT Philippines said
a green coal processing facility with a 200,000 ton capacity can employ
at least 20 people to handle its operation. eNEXT services include
preparation of feasibility study, design and engineering, installation,
supervision, maintenance, and upgrade of the facilities.

eNEXT's green coal technology received a positive response from the
government. National Solid Waste Management Commission (NSWMC) Executive
Director Emelita Aguinaldo said eNEXT's technology provides a solution
to the solid waste management problem in the country at the same time
makes for a good source of renewable energy.

Department of Energy Undersecretary (DOE) Jay Layug was grateful to the
Belgian company for bringing green coal technology to the country. The
next few weeks will be spent on reviewing whether ENEXT's green coal
technology may qualify for a service contract which in turn, will
entitle them to fiscal and non-fiscal incentives. Usec. Layug cited the
need to work out with the Board of Investments (BOI) how to provide
greater incentives for renewable energy projects to attract more
investors to the country. If the Belgians are excited about the
prospects of green coal in the country, shouldn't we be more aggressive
in pushing for it? For middle class families like mine, we cannot remain
complacent anymore about the rising costs of electricity. It simply has
become ridiculously expensive. Are you just gonna grin and bear it . . .
in the dark?

God is Great!

One Network Bank posts record P428 M profit in 2011

By Ted Torres (The Philippine Star) Updated February 07, 2012 12:00 AM
Comments (0)

MANILA, Philippines - One Network Bank (ONB), the country's largest
rural bank, posted a record P428 million net income last year, a growth
of 37.62 percent from P311 million in 2010.

Total resources likewise expanded 33 percent to P15.7 billion, from
P11.8 billion in 2010, the bank said in a statement.

Its net capital even stood at P2.5 billion during the period, higher
than the minimum capital required by the Bangko Sentral ng Pilipinas
(BSP) for commercial banks.

However, ONB president and chief executive officer Alex V. Buenaventura
said the bank has no plans of applying for a commercial bank license.

"ONB will not convert to commercial banks status principally because of
the lower three percent legal reserves required by BSP from rural banks
as against the 21-percent legal reserves for commercial banks,"
Buenaventura said.

ONB operates an 82-branch network in Mindanao. It has a branch in Metro
Manila and is looking to expand to the Visayas region.

It operates 114 Megalink ATMs and is pilot-testing its new Internet
banking service.

ONB is a product of three-way consolidation between Network Rural Bank
(Davao del Sur) Inc., the Rural Bank of Panabo (Davao del Norte) Inc.,
and the Provident Rural Bank of Cotabato (North Cotabato) Inc. Last
year, ONB completed and received regulatory approval for the
consolidation of Rural Bank of New Corella Inc. into its network.

Meanwhile, the main driver of growth last year was the 72-percent
expansion in loan portfolio from P6 billion in 2010 to P10.4 billion.

The biggest portfolio increase was realized from Mindanao government
teachers under the DepEd-APDS Salary Loan Program.

As of end-2011, ONB's exposure to 48,467 DepEd teachers reached P5.9
billion for a 109-percent increase over 2010.

Commercial loans to small and medium enterprises (SMEs) grew 78 percent,
or from only P800 million to P1.4 billion last year.

Meanwhile, the P10.5-billion deposit liabilities recorded in 2011
represented an 11-percent increase from the P9.4 billion level in 2010.
ONB has a total depositor base of more than 525,000 accounts.

Lower cost current and savings account (CASA) deposits account for 64
percent of total deposits.

Buenaventura said that a significant segment of the CASA deposits were
the 360,000 PeraAgad Pinoy ATM cardholders.

"PeraAgad Pinoy has a popular opening and maintaining balance of only
P100, making this convenient and affordable product among the small
accounts especially in countryside areas all over Mindanao where ONB is
in most cases the only provider of ATM machines," the bank official said.

Non-performing loan (NPL) ratio stands at five percent while the
non-performing asset (NPA) ratio was recorded at four percent as of
end-2011.

Its capital adequacy ratio (CAR) remains very healthy at 20 percent,
among the highest in the country's entire banking system.

Credit bureau for microfinance formed in the Philippines

By: Michelle V. Remo
Source: Philippine Daily Inquirer

7:36 pm | Tuesday, January 10th, 2012

MANILA, Philippines—A credit bureau dedicated for micro-borrowers has
been formed, and the Bangko Sentral ng Pilipinas said this should help
boost growth in lending to the country's low-income sector to a
double-digit pace in 2012.

The seven biggest micro-finance institutions in the country signed on
Tuesday a memorandum of agreement on the creation of the credit bureau,
which would make lenders more comfortable at extending loans to
micro-entrepreneurs.

Under the "Microfinance Data Sharing System (MiDAS)" agreed upon by the
seven institutions, credit information on micro-borrowers would be
placed in a common database that the lenders would have common access to.

Proponents of the system said that with the credit bureau,
micro-entrepreneurs of good credit standing or those that have not been
heavily indebted would have better chances of securing loans from the
participating creditors. They said the credit bureau would address the
problem of difficulty in access to loans by perceivably credit-risky
micro-borrowers.

The seven micro-finance institutions that are signatory to the MiDAS are
the following: Taytay sa Kausagan Inc. (TSKI), OK Bank, CARD Bank, CARD
NGO, Negros Women, Ahon sa Hirap and ASA Philippines. Together, they
serve about 70 percent of the estimated 1 million micro-borrowers in the
country.

Aristotle Alip, managing director of the CARD MRI Development Institute
– the umbrella organization for some microfinance institutions including
CARD Bank – said other entities engaged in micro-finance would be
welcome to be part of the credit bureau.

Alip said that unlike any regular data-sharing agreements, the one
signed by the seven micro-finance institutions would guide lenders in
their credit decision-making. The agreement also provides for the
assistance of financially troubled micro-enterprises.

Alip said the credit bureau would have a partner organization focusing
on helping rehabilitate problematic micro-enterprises.
"Under our agreement, there will be no blacklisting of clients. Instead,
a rehabilitation company will be created to help [financially troubled]
clients," Alip said during the launching of the MiDAS held on Tuesday,
at the BSP headquarters in Manila.
In the meantime, the central bank is looking at a favorable outlook for
microfinance lending for 2012, especially with the creation of the
credit bureau.

At the sidelines of the program, BSP Deputy Governor Nestor Espenilla
Jr. said micro-finance loans would likely be robust in 2012 in that it
could potentially match the double-digit pace of growth projected for
lending to large enterprises and conglomerates.

The banking industry expects growth in lending to big businesses to stay
well above 10 percent this year.
"We expect microfinance loans to increase this year and to match the
growth in regular lending," Espenilla said.
"The credit bureau will help boost credit to micro-enterprises," the
central bank official added.

Outstanding microfinance loans in the country currently stand at about
P7 billion and cover nearly 1 million clients.
There are about 200 banks and credit institutions in the country that
engage in microfinance.

Microfinance Credit Bureau, MiDAS, Launched by Microfinance Institutions in Philippines

Thursday, February 9, 2012

MICROCAPITAL BRIEF: Microfinance Credit Bureau, MiDAS, Launched by
Microfinance Institutions in Philippines

» Posted by Courtney Snelling in Category: Asia,Risks at 6:48 am

Microfinance institutions (MFIs) Taytay Sa Kauswagan Incorporated
(TSKI), Opportunity Kauswagun Bank, CARD Bank, CARD NGO, Negros Women
for Tomorrow Foundation Incorporated, Ahon Sa Hirap and ASA Philippines
signed a memorandum of agreement creating the Microfinance Data Sharing
System (MiDAS) in January of this year after an initial pilot phase in
2011 [1]. Overindebtedness due to borrowing from multiple MFIs was the
impetus for the creation of MiDAS.

The seven participating institutions are voluntarily submitting data to
MiDAS, which can be used for assessing a prospective borrower's credit
worthiness. The Banking Association of the Philippines Credit Bureau
(BAP-CO) is partnering with the participating MFIs to implement MiDAS
[2]. The creators of MiDAS encourage other MFIs to contribute and
participate [1]. A functionality which differentiates MiDAS from
traditional credit information systems is that MiDAS allows users to
search for information on barangays (the smallest administrative
division in the Philippines, similar to a village, ward, or district)
and not only on clients [2].

There are about 200 banks and credit institutions in the Philippines
that engage in microfinance [1]. The US-based NGO Microfinance
Information Exchange (MIX) reports data on 93 MFIs in the Philippines
that have an aggregate loan portfolio of USD 632 million and serve 3
million borrowers.

By Courtney Snelling, Research Associate

Global Microscope on the Microfinance Business Environment 2011

Thursday, February 9, 2012

MICROFINANCE PAPER WRAP-UP: Global Microscope on the Microfinance
Business Environment 2011

» Posted by Emilia Akonom in Category:
Regulation,Technology,Transparency,Trends/Challenges at 2:22 pm
By the Economist Intelligence Unit, funded by The Multilateral
Investment Fund, Corporación Andina de Fomento and the International
Finance Corporation, October 2011, 72 pages, available at:
http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36453519.

This paper examines the microfinance business environments in 55
countries, comparing them across three categories: supporting
institutional framework, political stability, and regulatory framework
and practices. It is the fifth annual paper in the series, covering the
12-month period through June 2011. The research comprises data collected
in 21 countries of Latin America and the Caribbean, 11 countries of
Sub-Saharan Africa, seven of Eastern Europe and Central Asia, seven of
East Asia, five of South Asia and four of the Middle East and North Africa.

The authors argue that while microfinance has become more mature and
sustainable, the global financial downturn lead to a downgrade in the
quality of some loan portfolios resulting in the need for improvement,
especially within risk management. The report benchmarks the regulatory
framework and operating environment in each evaluated country. The
factors included in the scoring are: regulation and supervision of
microcredit portfolios, legal recognition for microfinance institutions
(MFIs), regulatory and supervisory capacity for microcredit and other
microfinance services, deposit policies, accounting transparency, client
protection, credit bureaus and political stability.

The two countries of East and South Asia that are rated as having the
most favorable conditions for microfinance operations are Pakistan and
Philippines. Both receive strong scores for regulatory frameworks and
are in the top ten positions in the overall ranking. Cambodia, ranked
13th, also has an advantageous environment for MFIs. There is an
expectation of positive change in Thailand where the Ministry of Finance
has appointed new body to deal with microfinance matters and the central
bank eased regulations. In China, although the number of MFIs has been
growing, the sector is still in the early stages of development. India's
ranking dropped due to new regulatory limits on interest rates and
lending margins. Countries such as Sri Lanka and Vietnam are still in
the process of formulating regulatory mechanisms for microfinace.

Countries of Eastern Europe and Central Asia generally occupy middle
positions in the ranking. The position of the Kyrgyz Republic dropped
nine spots to settle at 21 as the regime change in 2010 annulled plans
for modernization of relevant law. Armenia and Bosnia focused their
efforts on consumer protection, and both countries score highly for
financial reporting standards.

Peru and Bolivia perform best in the ranking not only in Latin America
and the Caribbean region but also globally. The authors of the ranking
find that in Peru the sector benefits from a well-defined legal
framework and effective supervisory capacity. On the other hand,
microfinance in Bolivia continues to prosper regardless of civil unrest.
As the operations environment for microfinance has improved in Mexico
and Panama, both countries jumped in the ranking to finish in a tie at
tenth place. Brazil climbed up twelve spots as a result of strong
financial inclusion and innovations in agent banking. Trinidad and
Tobago, Venezuela, Haiti and Argentina are among those occupying the
bottom ten spots worldwide.

The growth of microfinance has decreased in a number of Arab countries
due to political unrest. Current affairs had a particularly bad
influence on the operating environment in Yemen. Despite clear
regulation and rapid growth in the sector in Yemen over the last several
years its rank this year sank 17 positions – still the best in the
Middle East and North Africa. While Egypt's legislation does not allow
the provision of microcredit by non-bank commercial companies, Morocco
has been boosting its investment climate for microfinance. On the other
hand, Lebanon only lightly regulates with regards to microfinance.

Kenya scores the highest in Sub-Saharan Africa and is fourth in the
global ranking. Neighboring Uganda finishes ninth globally and,
alongside Pakistan and Philippines, is the leader of the category for
regulatory framework and practices. Rwanda ranks 15th based on
government support of microfinance activities, especially in rural
areas. In Nigeria, the central bank revised its microfinance policy in
April 2011 but faces difficulties with enforcement. The central banks
also have issues with supervising MFIs in Democratic Republic of Congo,
Ghana and Senegal. In Madagascar, the market size has increased and
there is a comprehensive legal framework and a promotion unit, but
serious transparency issues remain.

By Emilia Akonom, Research Associate

Tuesday, February 7, 2012

One Network Bank posts record P428 M profit in 2011

By Ted Torres (The Philippine Star) Updated February 07, 2012 12:00 AM
Comments (0)

MANILA, Philippines - One Network Bank (ONB), the country's largest
rural bank, posted a record P428 million net income last year, a growth
of 37.62 percent from P311 million in 2010.

Total resources likewise expanded 33 percent to P15.7 billion, from
P11.8 billion in 2010, the bank said in a statement.

Its net capital even stood at P2.5 billion during the period, higher
than the minimum capital required by the Bangko Sentral ng Pilipinas
(BSP) for commercial banks.

However, ONB president and chief executive officer Alex V. Buenaventura
said the bank has no plans of applying for a commercial bank license.

ONB operates an 82-branch network in Mindanao. It has a branch in Metro
Manila and is looking to expand to the Visayas region.

It operates 114 Megalink ATMs and is pilot-testing its new Internet
banking service.

Monday, February 6, 2012

Number of microinsurance policyholders to double by 2015

BY ANN ROZAINNE R. GREGORIO, Reporter

Number of microinsurance policyholders to double by 2015

EFFORTS of the government and the private insurance sector and the
presence of "adequate" distribution channels are seen to increase the
number of microinsurance policyholders to about seven million by 2015.

"The contribution of the private insurance sector and the government and
the use of adequate distribution channels such as community-based
organizations and rural banks is approximated to increase the number of
microinsurance policyholders to seven million by 2015 from three million
in 2010," Antonis Malagardis, program manager of German Agency for
International Cooperation (GIZ) Microinsurance Innovations Program for
Social Security, told BusinessWorld in an interview last week.

"Well-developed distribution channels are crucial to bringing the
microinsurance products and services to the low-income people," he said.

There are currently eight microinsurance providers from the nonlife
industry, seven from the life industry and 15 from mutual benefit
associations.

Mr. Malagardis said the figure could be achieved through the
government's continued promotion of microinsurance through the financial
literacy campaign being conducted by the Department of Finance in the
country.

The Insurance Commission (IC) and the GIZ are conducting financial
literacy campaign in the country until August.

For his part, Michael J. McCord, president of the Microinsurance Centre,
LLC, in a statement released over the weekend by Rural Bankers
Association of the Philippines-Microenterprise Access to Banking
Services (RBAP-MABS), said that technology and rural banks will serve as
"key distribution points" to increase the presence of microinsurance in
the country.

The Microinsurance Centre is a consulting firm dedicated to provide
microinsurance products to 3 billion low-income people across the globe,
according to the the Microinsurance Centre Web site.

Mobile phone technology can aid microinsurance providers to enhance
their marketing, selling, application process, premium collections and
claims notification to both prospective and existing policy holders, Mr.
McCord said before the members of RBAP, representatives of Philippine
Life Insurance Association and the Asian Development Bank who
participated in the microinsurance seminar conducted by the RBAP last week.

He also pointed out that the rural banks are "one of the best private
sector partner" for insurance companies and the government given their
presence within communities where the target market for microinsurance
products reside.

Microinsurance is one of the key priorities of the IC and the Aquino
administration.

Based on IC's Insurance Memorandum Circular 1-2010, microinsurance
products are those whose daily premiums do not exceed 5% of the current
daily minimum wage rate of non-agricultural workers in Metro Manila.

Also, the maximum sum of guaranteed benefits should not be 500 times the
daily minimum wage rate for non-agricultural workers in Metro Manila.

Based on the NCC data, as of October last year, 50 microinsurance
products have been approved since the circular was issued in January 2010.

Of these, 33 were life products while 17 were non-life products.

Banks' Credit Standards Stable – BSP

By LEE C. CHIPONGIAN

February 5, 2012, 11:35pm

MANILA, Philippines — The central bank reported over the weekend that
banks' credit standards last year remained unchanged and there was no
tightening of credit standards for loans to both households and
enterprises, indicating the industry's steady outlook on the economy
despite a lower-than-expected 2011 gross domestic product (GDP) growth.

Based on its fourth quarter Senior Bank Loan Officers' Survey, the
Bangko Sentral ng Pilipinas (BSP) concluded that overall lending
standards remained stable in the last three months of 2011. This
sentiment is supported by banks' continued optimism about the economy,
their stable asset portfolio and their tolerance for risk.

The survey, which is conducted quarterly to help the BSP assess the
effectiveness of bank lending as a transmission channel of monetary
policy, also noted that there is increase in loan demand for loans from
enterprises and households, with the exception of micro-enterprises and
automotive loans.

The BSP said banks attributed the increase to customers' inventory and
accounts receivable financing needs, the low interest environment, the
attractive terms of financing offered by banks and for housing loans,
the higher housing investments that were seen during the period.

Based on the survey, banks did not change their lending standards for
loans to enterprises in the last quarter of 2011, and this "reflected
the banks' steady outlook on the general economy and certain industries
amid more uncertain global economic prospects, stable asset portfolio,
and unchanged tolerance for risk," said the BSP.

With regard to firm size, the BSP said the results of the survey showed
mixed results as credit standards for top corporations and micro
enterprises indicated a slight net tightening while banks' responses
showed a slight net easing in standards for large middle-market firms
and small and medium-sized enterprises. BSP also noted that banks'
standards on collateral requirements were unchanged since the third
quarter of 2011 while loan maturities have been lengthened.

"Moving forward, banks expect a slight net tightening over the next
quarter of overall credit standards, particularly for top corporations
and large middle-market enterprises. This was confirmed by some banks
already indicating somewhat tightening of credit standards for top
corporations and micro enterprises in the fourth quarter," said the BSP.

As for lending to households, the central bank said the credit standards
to all types of household loans were unchanged in the fourth quarter
after an overall net easing in the previous last two quarters.

There were also noted unchanged standards on collateral requirements,
loan covenants, and loan maturities across all types of household loans.

"Over the next quarter, banks indicated that credit standards would
likely remain unchanged for credit card and auto loans while those for
housing and personal/salary loans would likely ease somewhat in the near
term," said the BSP.

The survey forms were sent to 34 commercial banks but only 24 responded
or a response rate of 70.6 percent. The BSP started the bank loans'
survey in 2009 to "enhance its understanding of banks' lending behavior,
which is an important indicator of the strength of domestic economic
activity."