PHILDEVFINANCE (old news)

Saturday, January 15, 2011

A 2020 Vision for the Philippine Economy (Part II)

A 2020 Vision for the Philippine Economy (Part II)

By Dr. Bernardo M. Villegas

INQUIRER.net First Posted 08:59:00 01/09/2011

MANILA, Philippines—In the power sector, non-oil sources of energy will account for 70 percent or more of power generation, especially geothermal, natural gas, coal, biomass, hydro, wind, and solar.

I would also venture to say that by 2020, the construction of a nuclear plant somewhere in the island of Mindanao would have started to reduce the dependence of that second largest and most populated island on the very unreliable hydro power.

Also, by 2020, I am confident that the reforms recommended by Daniel E. Chalmers, chairman and CEO of GN Power, in the 7 Big Winners Summit last 28 October 2010 would have been fully implemented: a) the promotion of open access and retail competition and the choice and the responsibility given to a consumer; b) users of power to be more proactive and educated in contracting their power supply as a prudent measure for their power requirements; c) encouragement of private investors for additional capacity to support demand growth and create stability both in the grid and the market.

A major portion of the yearly FDI flows of $7 to $10 will be invested in the energy sector led, among others, by AES, one of the largest energy companies in the US. Some of the largest conglomerates in the Philippines, e.g. San Miguel Corporation, the Metro Bank group, the SM group, the Aboitiz group, the Metro Pacific group will be heavily invested in energy, raising significantly the efficiency of the sector. Electricity rates in the Philippines will no longer be the highest in the region.

In the manufacturing sector, food and beverage will continue to be the largest component. Auto parts manufacturing will survive competition in the Asean, with the appropriate incentives (not necessarily tax) from the government. By 2020, the total domestic market for cars can exceed 500,000 units a year, enabling some local car parts manufacturing to reach the necessary economies of scale to be regionally competitive.

Electronics exports will continue to fuel the manufacturing of electrical machinery, with higher-value products replacing the merely labor-intensive items of the last thirty years. As recommended by John Forbes of the American Chamber of Commerce, manufactured exports will have diversified by 2020 to creative industry products (e.g fashion goods), minerals, processed foods, and solar panels, among others.

In mining, the Aquino administration will be able to implement the desired key reforms identified by Benjamin Philip G. Romualdez, president of the Chamber of Mines of the Philippines, to wit, a) resolution of all the issues surrounding conflict between local government units (LGUs) and national government in the development of mineral resources, such as the legality of local ordinances banning mining and open pit mining and imposition of taxes by LGUs on mining companies, in addition to those specified in national laws; b) maintaining stable investment environment to promote local and foreign investment in the mining industry; c) transparency and good governance to reduce cost of doing business.

With these desired key reforms, by 2020 exports of mineral ores can be contributing more than $10 billion of revenues, especially from gold, copper, and nickel exports, considering the rapidly expanding demand for these commodities in China, India, and the other emerging markets. More than 500,000 workers will be employed in the mining sector by 2020. The mining companies will be exemplary in the practice of corporate social responsibility (CSR), especially as regards protection of the environment and the humane treatment of indigenous people in the mining areas, as the CSR Guidebook for the Mining Industry launched in 2010 is fully implemented. The mining sector will make a major contribution to the reduction of poverty since mining operations are in the remote rural areas, where 75 percent of the Philippine poor reside.

In the tourism industry, there will be some seven million foreign tourists traveling to the Philippines as the Open Skies policy is implemented during the Aquino administration, allowing more foreign airlines to fly directly to the Philippines, especially to airports outside the National Capital Region.

Among the new airports to be constructed in the next five to six years will be the Panglao Airport, Laguindingan, Puerto Princesa, Daraga International Airport, Kalibo, and the NAIA Terminal 3 upgrade full operationalization. The Clark International Airport will replace the Metro Manila airport as the main gateway to the Philippines from abroad. Angeles City will be the hub of a new metropolitan area that will develop in Central Luzon.

Even more important as an engine of growth of tourism is domestic tourism as 20 million middle-income Filipinos are expected to travel out of their usual place of residence to tourist destinations all over the archipelago, many of them taking advantage of the Philippine Nautical Highway that was started during the Arroyo administration and will undergo continuous improvement in the next six years under the Aquino government. To accommodate these tourists, there will be a mushrooming of bed-and-breakfast facilities all over the countryside, giving a boost to small family-run enterprises in the tourism industry.

I do not claim this 2020 vision to be an accurate forecast. It is my vision of what could be a reality 10 years from now if the government, the business sector, and civil society will cooperate to implement the reforms and programs identified in several symposia, conferences, workshops, and consultations that I have attended over the last few months since the inauguration of the Aquino presidency.

I repeat my most important assumption: The persons put in charge by President Aquino in all the departments that have to do directly with the accomplishment of the objectives for which the state is responsible are highly qualified, experienced, and honest individuals who will work for the common good of Philippine society. I do believe we are in good hands. Anyone who disagrees with this assumption will, of course, highly doubt the realism of this 2020 vision.

For comments, my email address is bvillegas@uap.edu.ph.

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Friday, January 14, 2011

Deutsche Bank sees 5% Phl growth in 2011

Deutsche Bank sees 5% Phl growth in 2011

By Ted P. Torres (The Philippine Star) Updated January 14, 2011 12:00 AM

MANILA, Philippines – German banking giant Deutsche Bank AG said it expects the Philippine economy to grow five percent this year, slowing down from the estimated 6.5 to 7 percent growth in 2010.

“It is our belief that the Philippine economy will grow by a healthy five percent due to an expected upside of the fiscal sector, strong remittance inflows, and bright future of the business process outsourcing sector,” Deutsche Bank chief economist for India, Indonesia and the Philippines Taimur Baig said in a press briefing yesterday.

Earlier, World Bank senior economist Eric Le Borgne said they are likewise looking at a five percent gross domestic product (GDP) growth in 2011.

“(This year) the stimulus package may have already been fully matured without a need for any extensions, and the real value of remittances from overseas Filipinos would actually be flat with the strengthening peso,” Le Borgne said.

The peso is still expected to strengthen in the range of 44 to 43 against the US dollar this year. “We just hope that the BSP will not aggressively put the lid on a strengthening peso,” Baig said.

Baig added that they also expect the Bangko Sentral ng Pilipinas (BSP) to raise interest rates by a total of 100 basis points for the whole of 2011, either in two or four tranches.

Inflation will likewise expect to move up to from its present range of 3.5 to 4 percent to around five percent, although the impact is expected to be minimal.

“It will remain muted especially for the Philippines as it has an automatic price adjustment mechanism in the case of fuel,” he added.

But Baig said exports remain one of the major concerns since a large portion of Philippine exports goes to the US and Europe.

Le Borgne said the Philippines, whose exports are dominated by electronics and semiconductors, is vulnerable to the risks of a slowdown in demand from developed countries.

“Forward looking indicators in the electronics and semiconductor sector are positive, albeit slightly down in the past quarter,” said Le Borgne.

“On the services side, the BPO industry is booming and despite concerns of a sharp and pronounced appreciation of the peso, the sector’s shortterm growth prospects are favorable.”

Food price shocks also pose a risk, but rice supply constraints are not expected in the near term in the Philippines given decent palay production in the latter part of 2010 and

large stockpiles at the National Food Authority.

Based on the latest Global Economic Prospects report of the World Bank, emerging and developing countries are expected to expand six percent in 2011, down from a seven percent pace in 2010, But that was more than double the 2.4 percent rate expected to be clocked by high-income countries this

year, slowing from a 2.8 percent rate in 2010.

Overall, the bank estimates global growth of 3.3 percent this year following a 3.9 percent rate in 2010.

Growth in both high-income and developing countries, however, was expected to pick up toward mid-2011, and “settling at rates close to their longerrun potential.”

Threats that could derail the recovery include the eurozone financial market crisis, volatile capital flows and the rising prices of commodities, including food and fuel, the 187-nation institution said.

China Bank launches mobile banking services

China Bank launches mobile banking services

(The Philippine Star) Updated January 11, 2011 12:00 AM

MANILA, Philippines - China Banking Corp. (China Bank) has launched its own brand of speed banking for people on the go with the debut of China Bank Online for Mobile – a mobile-optimized version of China Bank’s award-winning internet banking service.

China Bank’s mobile portal, www.chinabank.ph/mobile, is accessible on all Internet-enabled cellular phones and mobile devices such as iPad and iPod Touch.

Utilizing wi-fi and 3G technology, China Bank Online for Mobile was developed to make it fast, easy, and convenient for China Bank customers to do the three most frequently used banking transactions – balance inquiry, fund transfer, and bills payment – via mobile phones and devices, anytime, anywhere.

China Bank vice president for customer marketing Antonio Owen S. Maramag said that technology watchers predict 2011 will be the year of Mobile Internet with wi-fi-enabled mobile phones cheaper and free wi-fi hotspots more widespread.

“Mobile phones have the highest ownership and usage among all electronic gadgets, we are excited about providing our customers with access to China Bank and for them to transact whenever, wherever, and now, on the go on their mobile phones,” Maramag said.

The robust mobile portal complements China Bank’s 24/7 electronic channels: automated teller machine (ATM), China Bank Online (Internet banking), Mobile Banking (SMS-based), China Bank EZPay Kiosk (tax payment), and TellerPhone (phone banking).

China Bank Online for Mobile is available to China Bank customers enrolled in China Bank Online. Enrollment and use are free. Access to the mobile portal requires the same user name and passwords (log-in and transaction) as in the PC or Mac version.

PSBank introduces all-purpose pre-paid card

PSBank introduces all-purpose pre-paid card

(The Philippine Star)
Updated January 11, 2011 12:00 AM

MANILA, Philippines - The Philippine Savings Bank (PSBank) has unveiled the PSBank Prepaid MasterCard, an automated teller machine (ATM) card, debit card, remittance card, and Internet cash card all rolled into one.

The PSBank Prepaid MasterCard helps you stay within your budget because it lets you use only the amount you load in it. This enables you to securely spend within your means while effectively allocating your budget for your various financial needs.

And it doesn’t matter if your child is in high school or in college in another city. You can easily allocate his weekly or monthly allowance and send it to him on time by loading his own PSBank Prepaid MasterCard. This will teach him the basics of budgeting and managing his finances well.

The pre-paid card is also great for domestic and foreign remittances. If you’re working abroad or in another part of the country, you can send money to your family for their monthly expenses through the PSBank Prepaid MasterCard. Just go to any PSBank partner remittance office such as iRemit, the Development Bank of the Philippines (DBP) and the Metropolitan Bank & Trust Co. (Metrobank) to reload, and the money you have set aside for them will surely reach them quickly and inexpensively.

With the PSBank Prepaid MasterCard, you can withdraw cash from over 350 PSBank ATMs nationwide, over two million MasterCard ATMs worldwide, and more than 7,000 BancNet or Megalink ATMs nationwide, giving you 24/7 access to your funds wherever you are.

You can also use your PSBank Prepaid MasterCard to pay your bills at any PSBank, BancNet, or Megalink ATM nationwide or thru PSBank Remote Banking, the Bank’s Internet banking facility.

Or a cardholder experience the convenience of cashless shopping and dining without the risk of spending beyond your budget - you only spend what is loaded in the card. With your card, you can eat out or shop wherever BancNet and MasterCard are accepted.

The PSBank Prepaid MasterCard is also more secure, safe, and convenient to use for online shopping because you control the amount you load in it.

Reload easily

You can easily reload your PSBank Prepaid MasterCard via PSBank branches nationwide or PSBank Remote Banking, using cash or funds from a PSBank account and vice versa. The card can also be loaded via ATM with funds from a PSBank account or an account from another bank.

Get a PSBank Prepaid MasterCard now at your nearest PSBank branch. There’s no need to apply for a savings account or have a maintaining balance. For details on how to apply for the PSBank Prepaid MasterCard, visit www.psbank.com.ph or call the PSBank Customer Service Hotline at (02) 845-8888 anytime, any day.

Rural banks to tap the BAP credit bureau

Commercial banks offer credit bureau services to rural banks
(The Philippine Star) Updated January 11, 2011 12:00 AM Comments (0)

MANILA, Philippines - In the absence of the national credit information
system as mandated by the Credit Information System Act (CISA), rural
banks are encouraged to avail of the credit information services offered
by the Bankers Association of the Philippines-Credit Bureau Inc. (BAP-CB).

The CISA was passed into law in October 2008 and the implementing rules
and regulations (IRR) were finalized the following year.

Under the law, the credit information body is mandated to receive and
consolidate basic credit data and to act as a central registry of credit
information. It will provide access to reliable standardized information
on the credit history and financial condition of borrowers.

However, it all remains in paper as the Securities and Exchange
Commission (SEC), designated by the law as lead government agency, has
not taken any action since the approval of the IRR.

For the meantime, poor information on the credit worthiness of borrowers
could lead to more bad loans and fraud.

But in a forum organized by the Rural Bankers Association of the
Philippines (RBAP), BAP, the trade organization of the commercial
banking system, categorically offered its services.

BAP-CB officer Manuel Batallones offered its information system to
support rural banks' credit information needs as their way of supporting
the rural banks and especially the microfinance sector.

In fact, Batallones revealed that they have reduced the fee for inquiry
from P11 to P5.60 and waived the fee to join the system. In fact, 20
rural banks have already subscribed to the bureau.

RBAP president Corazon Miller said that the bureau is an important tool
for rural banks to use in processing loans as well as screening new
checking account applications as it provides information whether they
have credit cards cancelled, checks bounced, mortgaged (properties)
repossessed, or loans in litigation, in the absence of a national credit
information bureau.

Rural banks can help avoid lending to borrowers with existing loans in
other banks and, thus, potentially avert client over-indebtedness.
Multiple borrowings and over indebtedness are harmful to microfinance
clients, and are now viewed as potential threats to the sector due to
stronger competition amongst rural banks and other microfinance players.

Miller, who is also president of First Country Bank of Taguig, admitted
that her rural bank had been able to get payments from delinquent
clients whose names had been submitted to the BAP-run bureau.

The BAP-CB database contains more than 3.8 million accounts with
negative information (such as unpaid loans, loans under litigation,
bouncing check cases, and mishandled credit cards). Commercial banks
have been using this tool as part of their screening process for all
borrowers.

Rural banks to tap the BAP credit bureau

Philippine Star – In the absence of the national credit information
system as mandated by the Credit Information System Act (CISA), rural
banks are encouraged to avail of the credit information services offered
by the Bankers Association of the Philippines-Credit Bureau Inc. (BAP-CB).

The CISA was passed into law in October 2008 and the implementing rules
and regulations (IRR) were finalized the following year.

However, it all remains in paper as the Securities and Exchange
Commission (SEC), designated by the law as lead government agency, has
not taken any action since the approval of the IRR.

A Wrong Turn In Microcredit - Yunus

This short article from Prof Yunus is definitely applicable too, in some way, to the microfinance sector in the Philippines.

A Wrong Turn In Microcredit

BY MUHAMMAD YUNUS

In the 1970s, when I began working here on what would eventually be called ‘‘microcredit,'' one of my goals was to eliminate the presence of loan sharks who grow rich by preying on the poor. In 1983, I founded Grameen Bank to provide small loans that people, especially poor women, could use to bring themselves out of poverty. At that time, I never imagined that one day microcredit would give rise to its own breed of loan sharks.

But it has. And as a result, many borrowers in India have been defaulting on their microloans, which could then result in lenders being driven out of business. India's crisis points to a clear need to get microcredit back on track.

Troubles with microcredit began around 2005, when many lenders started looking for ways to make a profit on the loans by shifting from their status as nonprofit organizations to commercial enterprises. In 2007, Compartamos, a Mexican bank, became Latin America's first microcredit bank to go public. And this past August, SKS Microfinance, the largest bank of its kind in India, raised $358 million in an initial public offering.

To ensure that the small loans would be profitable for their shareholders, such banks needed to raise interest rates and engage in aggressive marketing and loan collection. The kind of empathy that had once been shown toward borrowers when the lenders were nonprofits disappeared. The people whom microcredit was supposed to help were instead being harmed. And in India, borrowers came to believe that the lenders were taking advantage of them, and stopped repaying their loans.

Commercialization has been a terrible wrong turn for microfinance, and it indicates a worrying ‘‘mission drift'' in the motivation of those lending to the poor. Poverty should be eradicated, not seen as a money-making opportunity. There are serious practical problems with treating microcredit as an ordinary profit-maximizing business. Instead of creating wholesale funds dedicated to lending money to microfinance institutions, as Bangladesh has done, these commercial organizations raise larger sums in volatile international financial markets, and then transmit financial risks to the poor.

Furthermore, it means that commercial microcredit institutions are subject to demands for ever-increasing profits, which can only come in the form of higher interest rates charged to the poor, defeating the very purpose of the loans.
Some advocates of commercialization say it's the only way to attract the money that's needed to expand the availability of microcredit and to ‘‘liberate'' the system from dependence on foundations and other charitable donors. But it is possible to harness investment in microcredit - and even make a profit - without working through either charities or global financial markets.

Grameen Bank, where I am managing director, has 2,500 branches in Bangladesh. It lends out more than $100 million a month, from loans of less than $10 for beggars in our ‘‘Struggling Members'' program, to micro-enterprise loans of about $1,000. Most branches are financially self-reliant, dependent only on deposits from ordinary Bangladeshis. When borrowers join the bank, they open a savings account. All borrowers have savings accounts at the bank, many with balances larger than their loans. And every year, the bank's profits are returned to the borrowers - 97 percent of them poor women - in the form of dividends.
More microcredit institutions should adopt this model. The community needs to reaffirm the original definition of microcredit, abandon commercialization and turn back to serving the poor.

Stricter government regulation could help. The maximum interest rate should not exceed the cost of the fund - meaning the cost that is incurred by the bank to procure the money to lend - plus 15 percent of the fund. That 15 percent goes to cover operational costs and contribute to profit.

In the case of Grameen Bank, the cost of the fund is 10 percent. So, the maximum interest rate could be 25 percent. However, we charge 20 percent to the borrowers. The ideal ‘‘spread'' between the cost of the fund and the lending rate should be close to 10 percent.

To enforce such a cap, every country where microloans are made needs a microcredit regulatory authority. Bangladesh, which has the most microcredit borrowers per square mile in the world, has had such an authority for several years, and it has ensured transparency in lending and prevented excessive interest rates and collection practices. It can also accredit microfinance banks. India, with its burgeoning microcredit sector, is most in need of a similar agency.

There are always people eager to take advantage of the vulnerable. But credit programs that seek to profit from the suffering of the poor should not be described as ‘‘microcredit,'' and investors who own such programs should not be allowed to benefit from the trust that microcredit banks have rightly earned.

Governments are responsible for preventing such abuse. In 1997, then First Lady Hillary Clinton and Prime Minister Sheikh Hasina of Bangladesh met with other world leaders to commit to providing 100 million poor people with microloans and other financial services by 2005. At the time, it looked like an utterly impossible task, but by 2006, we had achieved it. World leaders should come together again to provide the powerful and visionary leadership to help steer microcredit back on course.

Muhammad Yunus is the founder of Grameen Bank. He was awarded the Nobel Peace Prize in 2006.

Wednesday, January 12, 2011

Officials probe savings and loan scam

Officials probe savings and loan scam

MILITARY officials are investigating a syndicate operating inside the Air Military Wing Salary Loan Association Inc., were unwary soldiers are being dunned to pay fraudulent salary loans amounting to nearly half a million pesos.

Military police and agents last week arrested a Rose Ramos while she was in possession of salary loan documents supposedly filed by Private First Class Amador Umipig Verona, who had filed a complaint with the authorities.

“We’ve already asked headquarters to authorize our office to issue identification cards of our soldiers who are availing [themselves] of financial assistance,” Army spokesman Col. Antonio Parlade said.

The loan association discovered that an impostor Private First Class Verona was able to secure and cash P284,722 on Dec. 14, 2010, after the real Verona filed a complaint when his salary had an P8,000-deduction. Florante S. Solmerin

PNB, Globe Asiatique in talks over loan payment

PNB, Globe Asiatique in talks over loan payment
by Roderick T. dela Cruz

Philippine National Bank is in talks with troubled property developer Globe Asiatique Realty Holdings Corp. over loan repayment, even as another bank began foreclosing the mortgages of the realtor.

“We do have exposure to Globe Asiatique,” PNB president Eugene Acevedo conceded. He declined to disclose the bank’s exposure to the builder, which was accused of financing its housing projects with fictitious loans from the government.

Acevedo said PNB was trying a different route in negotiating the terms with Globe Asiatique, compared with the approach taken by Rizal Commercial Banking Corp.

RCBC took over several properties of Globe Asiatique through a public auction arising from the extrajudicial foreclosure of the pertinent mortgages.

RCBC foreclosed on the residential tower property being built by Globe Asiatique at the corner of Edsa and Quezon Avenue in Quezon City and other projects in Pampanga because of the latter’s failure to pay its mortgage.

Despite the foreclosure, Bangko Sentral said the financial system remained sound and strong enough to absorb any losses stemming from the foreclosures.

“Bank exposures to Globe Asiatique do not constitute a threat to banking system at all. They are quite small relative to bank provisions and capital. If they turn bad, it is just one of those things chargeable to experience that banks can readily handle,” said Bangko Sentral Deputy Governor Nestor Espenilla Jr.

Acevedo said PNB remained financially sound, with a net profit outlook growth of more than 16 percent in 2011. “We expect to grow faster this year,” he said.

The bank posted a net income of P2.45 billion in the first nine months of 2010, up 16 percent year-on-year.

PNB is focusing on consumer lending this year to take advantage of the rapidly expanding sector in the Philippines. “For 2011, consumer loans will be a very big thing for us,” Acevedo said.

The bank has allocated P400 million to refurbish 130 branches in two years. About 70 branches have already been renovated so far as a part of the bank’s rebranding strategy.

Acevedo said he also expects the merger with Allied Banking Corp., another bank controlled by taipan Lucio Tan, to be completed within the year

Monday, January 3, 2011

Individual loans grow 12% in first 3 quarters of 2010—BSP

Individual loans grow 12% in first 3 quarters of 2010—BSP
By Michelle Remo
Philippine Daily Inquirer
First Posted 17:50:00 01/03/2011

Filed Under: inflation, Interest Rates, Loan Markets, Economy and Business and Finance, Banking, business
MANILA, Philippines—Banks extended more loans to individual borrowers in the first three quarters of 2010, a development regulators said would help sustain growth in consumption and the overall economy in 2011.

The Bangko Sentral ng Pilipinas reported on Monday that the outstanding amount of consumer loans from universal and commercial banks amounted to P447 billion in January to September last year, up nearly 12 percent from P400 billion in the same period a year ago.

Moreover, the outstanding loans as of the end of the third quarter was up by 3 percent from the P435 billion as of the end of the second quarter.

Loans secured by individual borrowers accounted for about 16 percent of total outstanding loans, worth over P2.8 trillion, disbursed by the banks.

Consumption has been one of the key drivers of the Philippine economy, which in 2010 grew and rebounded sharply during the height of the latest global economic turmoil in 2009.

Regulators said bank lending was partly credited for aiding the acceleration of the economy last year.

Growth in bank lending was due both to appetite of banks to lend and increase in demand for consumer loans. Economists said rising income levels, partly boosted by growth in remittances from overseas Filipino workers, gave confidence to Filipino households to purchase big-ticket assets, such as residential properties and automobiles.

Purchase of these assets was supported by bank loans, demand for which grew as consumer confidence improved, the BSP said.

The central bank said that besides improving consumer confidence, low interest rates likewise helped encourage more individuals to secure loans.

The BSP has been keeping its key policy rates, which influence commercial bank lending rates, at historic lows since July 2009 with the aim of boosting demand for credit. They said loans have helped beef up demand for goods and services, and thus pushed growth of the overall economy.

Overnight borrowing and lending rates of the BSP stand at historic lows of 4 and 6 percent, respectively.

Officials said the low interest rate environment helped the economy avoid a recession in 2009 and register a sharp rebound in 2010.

The economy, measured in terms of gross domestic products, grew by 1.1 percent in 2009 and 7.5 percent in the first three quarters of 2010.

The Monetary Board of the BSP, in its last policy rate-setting meeting for 2010 held on December 29, said it did not see any urgency to raise rates at the moment given projections that inflation would remain benign over the short to medium term.

Inflation is estimated to have averaged at 3.8 percent for 2010, well within the official target of 3.5 to 5.5 percent for last year.

Official inflation for 2010 will be announced this week.

Low interest rates have the tendency to accelerate increase in prices of goods and services, since these boost demand for goods and services.

But the BSP said the increase in consumer prices are staying within tolerable levels, and so interest rates may stay at record lows.

Sunday, January 2, 2011

Smart mobile-money service goes global in 2011

Smart mobile-money service goes global in ’11

Wednesday, 29 December 2010 00:00

SMART Communications Inc. on Tuesday said its mobile money services will be available globally starting next year through its partner MasterCard. In a statement, Smart said mobile phone subscribers in Brazil will be able to buy prepaid airtime or pay mobile merchants by January by drawing funds directly from their MasterCard credit or debit cards using their handsets.

This move is in line with the company’s new strategy of promoting Smart Money through partnerships with financial and other institutions at home and overseas.

Smart said that the commercial launch of MasterCard’s mobile payments service in Brazil is the latest milestone in the development of Smart Money, the telco’s mobile commerce platform.

MasterCard’s Mobile Payments Gateway was developed with the assistance of Smart Hub Inc., the telco’s full owned subsidiary.

This payments service is being offered in cooperation with leading Brazilian financial institutions, Itaú Unibanco and Redecard, and with cellular market leader, Vivo.

Vivo mobile subscribers will be able to avail of this service and link their MasterCard credit or debit cards issued by Itau to their mobile phones.

After Brazil, this service will be available in major markets in Eurasia, Europe, Africa, and Middle East.

Smart also forged partnerships with local and international remittance companies, strengthened existing ones with leading banks and entered into collaborations with top microfinance institutions to extend the reach of its mobile commerce services.

Smart Money, users of which stand at 8.5 million, is a reloadable electronic payment card linked to a mobile phone.

DARWIN G. AMOJELAR

A very good year for the economy - Monsod

Posted on 11:24 PM, December 29, 2010

Calling A Spade... -- By Solita Collas-Monsod

A very good year for the economy

All in all, it’s been a very good year for the economy. Let us count the ways: GDP grew at 7.9% in the first half of the year, 6.5% in the third quarter, and there is no reason to believe that it will slow down in the last quarter, so we’re looking at a growth performance of at least 7% for the whole year. Nothing to sneeze at -- we’ve done it at most a couple of times in the past quarter century, if memory serves.

Then there is the matter of one million net new jobs created between the two Octobers, with an increase in the proportion of wage and salaried employment, from 53.5% to 54.2% (and a decrease in both own-account and unpaid family labor) -- wage and salaried employment conventionally being thought of as "better quality" employment. The only dark lining in this silver cloud is the proportion of underemployment having also increased.

Price behaved, too. The inflation rate, year-to-November, was a respectable 3.8%.
Surprisingly, Central Government Debt decreased in absolute terms (see the NSCB National Summary Data Page which gives the latest figures -- NSCB must be congratulated for the exhaustive but user-friendly data presentations), at least from August to September 2010, although external debt increased by $2.5 billion between the second and the third quarter -- why the government borrowed from abroad when the rates are so low here is beyond me, except that perhaps the new secretary of Finance was showing off.

Net foreign direct investments also more than doubled between the second and the third quarters ($115 million to $311 million).

And while the official poverty data derived from the 2009 Family Income and Expenditure Survey has not been released, Sharon Piza, who works with Arsi Balisacan, tells me that given that the average family income of the lowest three deciles increased by 9% and that the gini coefficient (measuring income inequality) has improved, all indications point to a decrease in poverty incidence between 2006 and 2009. The Conditional Cash Transfer program was also doubled in 2010, so one can be fairly confident that 2010 will also have experienced a decrease in poverty.

The question is whether that kind of growth rate is sustainable. Now, that’s a very tall order, because we had an economic stimulus program in place for 2010 that will not be replicated fully for another six years, nor even partially for another three years. We’re talking about the election expenditures, of course.

Although no one has a handle on how much was actually injected into the economy -- the Comelec figures are sadly not only incomplete but underestimated, because no one takes the Comelec rules seriously -- we can do some back-of-the-envelop calculations.

The May 2010 elections had 17,000 positions up for grabs, including of course the top two executive positions. Assume an average of four candidates for every position (former Namfrel Executive Director Telibert Laoc, in his blog, talks about 5 to 7), and assume an even more conservative P1-million campaign budget for each candidate, and you come up with P68 billion worth of campaign expenditures -- and that is just from the private sector, all spent within the first half of the year.
For the October Barangay Elections, we’re talking about 630,375 positions. Now assume two candidates for every position, and an average expenditure of just P50,000 by each candidate, and we’re already talking P63 billion being spent on elections for the second half of the year.

A total of P131 billion worth of stimulus, that is not going to be replicated next year.

This is where the polity comes into the picture -- the honest and efficient government promised by PNoy that got him elected in the first place. The point being that the only way the country can hope that the growth and development will be sustained is by making sure that the resources available to the government are increased, and/or they are used efficiently (no waste), i.e., an honest and competent government.

What are the chances? Well, let’s take a brief look at the three branches of government, and where they are now.

The Executive Branch got off to a shaky start on fulfilling its honest-and-competent governance platform. The President’s choices for his "team," both Cabinet and sub-Cabinet, were a mixed bag: some excellent ones (e.g. De Lima, Robredo, De Jesus, Singson) some mediocre ones (no examples will be given), some whose main claim to fame is that they were classmates or sidekicks, and some whose honesty and integrity are a huge question mark from the word go. It is not surprising, therefore, that the results have also been a mixed bag: executive orders and proclamations issued without the benefit of complete staff work and which had to be redone or which suffered setbacks; the bungling of the hostage crisis, followed by an excellent investigating committee report, which was then watered down to the point of ineffectiveness; an excellent budget proposal that, however, had echoes of previous administrations’ confidential and intelligence funds, not to mention the tuloy-ang-ligaya pork barrel; a firm stand on family planning and poverty reduction strategies, but the flip-flopping on the promise to distribute the lands of Hacienda Luisita with the lame excuse that there is a pending case with the Supreme Court -- which factor (a pending case), however, did not deter the grant of amnesty to unremorseful (and even recidivistic) coup plotters. The President’s learning curve has to turn upward immediately. No more excuses are allowed.

The legislature has gotten off to an excellent start by passing the budget on time , so that the country will at least start on the right foot in 2011 instead of having to live with a reenacted budget, as it has done more often than not in the past 10 years. Its stance on the reproductive health bill is also to be commended. It will, however, have to try harder to pass the Freedom of Information Act and the Whistleblower Protection Act (as distinguished from the Witness Protection one) which are necessary weapons in the fight against corruption. However, its approval of the amnesty despite the recommendations of both the Davide and the Feliciano Commissions reflects the politics of political accommodation rather than an issue-based decision-making process. The kid-glove treatment of Senator Lacson also reinforces again the perception that our law makers consider themselves above the law.

The judicial branch has to shape up too. The Supreme Court, which is supposed to be the last bastion of democracy also has a mixed record. On the plus side, it has come out with decisions such as those disallowing the Radstock compromise, reversing the conversion of certain municipalities into cities in contravention of the law, and acquitting Hubert Webb, et al. On the negative side, there are its decisions with regard to the constitutionality of the midnight appointment of the chief justice, the plagiarism of one of its members, and the decision on the Abadilla 5 case (inconsistent with its decision on Webb). With respect to the rest of the judiciary, the slow pace of the Maguindanao Massacre hearings is giving it an even blacker eye.

And then there is the role of we, the people. If our economic growth and development are to be sustained, within the democratic setting we love so much (the 2010 elections have proved that again, so a pox on these military adventurists who think they are smarter than the people), our active participation is a sine qua non. And we can start with our barangays, where the system is as close to a direct democracy as you can get. Today, the barangays, tomorrow, the country.

May the New Year be better than this one.

Banks urged to cut remittance fees

Banks urged to cut remittance fees

Philippine Daily Inquirer
First Posted 16:42:00 12/31/2010

Filed Under: Remittances, Banking
MANILA, Philippines – The Banko Sentral ng Pilipinas wants banks to further reduce remittance fees, urging them to consider the welfare of families of overseas Filipino workers (OFWs).

“The remittance fees can go down further; banks have leeway to cut the rates,” BSP Deputy Governor Diwa Guinigundo told reporters before the holiday break.

The central bank executive said reducing remittance charges would encourage OFWs to send more money to their beneficiaries. Remittances are a big boost to the Philippine economy, fueling household consumption.

In the first 10 months of the year, remittances reached $15.5 billion—up 7.9 percent year-on-year.

Banks’ remittance fees range from P150 to P550 per transaction, depending on the amount of remittance and the country of origin.

But a few banks that have started to use the Philippine payment and settlement system (PhilPaSS) of the BSP now charge only P50 per transaction, the central bank said.

PhilPass, an electronic system that clears check payments to and from banks the BSP regulates, has been designed specifically to bring down remittance costs.

A bank that hooks up to the PhilPaSS may electronically send remittance to a branch near the location of a recipient. This way, banks need no longer have to hire couriers to deliver remittances received at the head offices.

The BSP expects remittances sent through formal channels (banks, registered money transfer companies) to continue to grow in 2011, specifically to reach over $20 billion. Michelle V. Remo

Gov’t readies rules for microinsurance

Gov't readies rules for microinsurance
By Ronnel Domingo
Philippine Daily Inquirer
First Posted 16:48:00 12/31/2010

MANILA, Philippines – The government is stepping up the preparation of rules for microinsurance as market for low-cost policies expands, Finance Undersecretary Gil S. Beltran said.

In an interview, Beltran said people who would be directly involved in implementing the rules—including officials of the Insurance Commission and accountants—were also being trained to ensure accurate reporting and analysis of relevant data.

"As we are developing performance indicators for microinsurance providers, industry players are being consulted," he added. "In such a way, companies will be ready once the regulations are issued."

Beltran said the market for microinsurance products and services had emerged over the years as more people get jobs and become aware of the importance of insurance coverage for health and others needs.

In November, microinsurance experts from all over the world called on private firms to develop insurance products for the poor as they cited the Philippines being among global leaders in promoting low-premium policies.

The International Labor Organization-backed MIN, together with Munich Re Foundation, organized the 6th International Microinsurance Conference that was held at the InterContinental Hotel in Makati City.

According to the National Credit Council, there is a "large growth potential" for the Philippine microinsurance market considering that penetration of insurance in general remains relatively low.

NCC data show that life insurance covers some 13 percent of the population while coverage of non-life insurance is "miniscule."

There are an estimated 2.9 million people covered by microinsurance as of 2009, but the potential market base waiting to be tapped is about 35 million people.

Gov’t has yet to discover its real secret weapon: The lowly co-ops

Gov't has yet to discover its real secret weapon: The lowly co-ops

By Vincent Cabreza
Inquirer Northern Luzon
First Posted 16:26:00 01/01/2011

Filed Under: Government, business, Agriculture
Most Read
BAGUIO CITY—As strawberry wholesaler Asner Bautista describes it, farmers are slaving away in strawberry fields in nearby La Trinidad town in Benguet to harvest berries for tourists spending their Yuletide break here.

Supplies are sufficient but are not enough to flood the local markets, Bautista said.

Typhoon "Juan" last October had set back harvests again by a few weeks, so most of the supplies had been distributed to Manila retailers only since Dec. 1, according to Maritess Visaya, a vendor.

Days before December 25, strawberries sold in La Trinidad still commanded prices of as high as P300 a kilo.

Stories like these are not uncommon.

Agriculture is still vulnerable to the weather, given the low-impact infrastructure of the sector.

The government has tried to increase its investments in the food trade, but even its public-private initiatives have failed to start high-profile farm projects.

Some believe, however, that the government may not be working at the right financiers of these projects.

Since a new Cooperatives Code granted credit cooperatives tax breaks this year, they have begun to double their profits, and may now provide capital for high-profile farm projects themselves, said Coop-Natco Party-list Rep. Jose Ping-ay.

Most of the 17,000 accredited cooperatives in the various regions serve as savings and loans facilities, while only a 10th serve farmers directly.

"But every cooperative is either located in the farms or are already accessible to farmers," Ping-ay said after meeting Cordillera cooperative leaders here.

The Baguio-Benguet Market Plaza Cooperative Multipurpose Inc. (Bamapcom), for instance, is offering to finance farm projects that cost as much as P5 million, which represents 10 percent of its loan portfolio.

The government is also encouraging credit cooperatives to avail themselves of an agricultural credit guarantee fund to shield cooperatives from bad loans taken out by the farm sector, Ping-ay said.

He said advocates of the cooperative movement spent the last two years modernizing and correcting mechanisms that have been blamed for the poor performance of cooperatives over the last few decades.

"It may take two more years just enforcing the corrections, before we can start diverting cooperatives to projects that would improve farming," he said.

The amended Philippine Cooperatives Code of 2009 (Republic Act 9520) incorporated major reforms. The new law's most controversial provision frees credit cooperatives from paying taxes, specifically those due from savings deposited by members in the cooperatives' accounts.

The local banking industry "lobbied hard to prevent Congress from passing that provision because it grants cooperatives the same privileges as [banks and would make them the rivals of the finance trade]," Ping-ay said.

Their fears may be real.

Ping-ay said he was not at liberty to discuss how much cooperatives earned after 2009, but in one example, the Ilocos Sur based-Santa Cruz Savings and Development Cooperative doubled its revenues in 2009 due to an increase in members. The cooperative has projected a net profit of P150 million by year end.

"I have asked the Cooperatives Development Authority to inventory all cooperatives to determine how the new law had impacted on their revenues since its passage," Ping-ay said.

He said that cooperatives, which serve as virtual banks, are good for the agriculture and food industries because these are the institutions farmers trust most.

Government agencies and several private banks have offered to finance a reconstruction program to address the impact of two typhoons that affected Luzon farms in 2009, but few of these plans had been fulfilled as this year ends.

A government post-disaster needs assessment program estimated that damage and losses from Tropical Storm Ondoy and Typhoon Pepeng amount to a total of P207.9 billion.

The agriculture sector sustained damage of P3.8 billion and losses of P36.2 billion.

The storms came at a time when the current crops were about to be harvested, so most of the production were lost, the report said.

BSP finalizes bank capital hike under Basel III

BSP finalizes bank capital hike under Basel III

By Lawrence Agcaoili, The Philippine Star

Posted at 12/31/2010 10:57 PM
Updated as of 12/31/2010 10:57 PM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has finalized the guidelines on the risk-based capital adequacy framework that would help Philippine banks comply with the Basel III agreement aimed at addressing the weaknesses of the international banking industry that were made evident during the global financial crisis.

BSP Governor Amando M. Tetangco Jr. said the adoption of the new criteria for capital instruments is part of the central bank’s commitment to continuously institute reforms that would promote a stronger banking system.

“The BSP has always expressed its broad support for the objectives of the international reforms. While they are primarily geared toward big banks, we appreciate that there are certain lessons that apply universally,” Tetangco stressed.

The BSP said the Monetary Board approved an amendment to the existing risk-based adequacy framework of the central bank to incorporate certain provisions of Basel III aimed at improving the quality of capital.

Under the revised framework, the BSP adopted the Basel III criteria for inclusion of non-common equity components in banks’ capital base as basis for determining capital instruments that could be counted as regulatory capital by Philippine banks starting Jan. 1.

The Basel III agreement revised the existing international capital standards under Basel II and involves changes to the definition of bank capital.

“We would like to see out banks push the envelope when it comes to improving risk management and governance. We believe Basel III has a roles to play in this area,” Tetangco said.

Under Basel III, the definition between Tier 1 and Tier 2 capital was retained but Tier 1 capital was subdivided into common equity and additional going-concern capital components while the subcategories of Tier 2 capital were removed.

Tier 1 capital is considered as the more reliable form of capital consisting largely of shareholders’ equity and retained earnings as “core” Tier 1 capital and common stock known as Tier 1 capital securities. Tier 2 capital is the second most reliable form of financial capital supplementary capital that comprise of undisclosed reserves, revaluation reserves, general provisions, hybrid instruments and subordinated term debt.

Under Basel II, banks’ qualifying capital consisted of Tier 1 divided into core capital and Hybrid Tier 1 as well as Tier 2 including upper and lower categories that could contribute up to 100% of the amount of Tier 1 capital to form a bank’s capital base.

The BSP explained that Basel III states that majority of the capital base must be in the form of common equity elements and sets out minimum criteria for instruments to qualify in each of the sub-categories of capital.

It added that the new guidelines state that instruments included in additional going-on concern capital and Tier 2 capital must not be governed by conditions that give the issuing bank an incentive to redeem the instrument such as increases in coupon or dividend rates in the event that the instrument is not called at a pre-determined date reducing the instrument’s ability to absorb losses.

Furthermore, the new guidelines provide that bank issuance must prospectively comply with Basel III criteria for addition going-concern capital in order for these to qualify as Hybrid Tier 1 capital and criteria for Tier 2 capital for these to quailify as Lower Tier 2 capital.

Under the new guidelines, the BSP would no longer allow the new issuance of capital instruments to be included in the upper Tier 2 capital.

Philippine banks were allowed to follow the definition of capital under Basel II wherein banks issued capital instruments such as unsecured subordinated debt that qualified as either hybrid Tier 1, hybrid Tier 2 or lower Tier 2 capital.

The BSP said eligible capital instruments under hybrid Tier 1, hybrid Tier 2 or Lower Tier 2 capital based on existing regulations that were issued as of Dec. 31 this year would continue to be recognized under their respective categories until such time that further guidance is issued by the central bank.

“At this point in time, the BSP is not yet making any changes to the capital structure of banks. Thus the minimum capital raios as well as the limits on the amounts that can be including as Hybrid Tier 1 and Upper and Lower Tier 2 capital are being retained,” the BSP said.

Tetangco added that the BSP is also studying other components of Basel III in order to determine how the principles are best applied to local circumstances.

Wednesday, December 29, 2010

LBC now PhilHealth-accredited

LBC now PhilHealth-accredited

THE LBC Express, Inc. is now ready to accept premium payments
from individually paying members (IPMs) of the Philippine
Health Insurance Corporation (PhilHealth), as well as from
employers in the government and private sectors.

Through Circular 35, s.-2010, the PhilHealth officially granted
accreditation to LBC primarily to make premium remittance more
convenient for employers and IPMs. PhilHealth President and
Chief Executive Officer Dr. Rey B. Aquino and LBC President
Santiago G. Araneta signed the Collection and Remittance Agreement
(CRA) in simple ceremonies at the PhilHealth Head Office
recently.

“This move spells added convenience for our members, because
they can now pay even beyond the close of business
hours. I understand there are LBC branches that are open up to six
in the evening on weekdays, and even during weekends, making
their services truly accessible for our members,” Mr. Aquino said,
adding that the only exception to the payment arrangement are LBC
branches located in SM Malls.

The LBC is a non-bank collecting agent. It is technologically
equipped and known for its courier and money remittance
services that are the safest, fastest and offers the lowest rates
in the country. The LBC is now the seventh non-bank facility accredited
by PhilHealth to cater to the premium remittance requirements
of its partner-employers and members all over the country.
When paying through the LBC Customer Associate, IPMs must
provide their complete names and PhilHealth Identification Numbers.
On the other hand, employers must provide their complete
business name and PhilHealth Employer Number. “They should
also indicate the period for which the payment is being made, the
amount of payment and the member type,” Mr. Aquino said. The
LBC will issue either the Payment Receipt or the Acknowledgement
Receipt printed on thermal paper, depending on the existing system
used by the branch through which payment is being made.

The LBC is known for its widest coverage and network. With
about 905 strategically located branches nationwide, it now provides
PhilHealth members with a multitude of payment locations to
choose from. Its primary objective is to link and bridge its customers
by providing innovations in terms of remittance services that
will respond to the growing needs of Filipino families and business
entities. Their objective is in accordance to PhilHealth’s commitment
to provide an efficient premium collection mechanism and to maintain an updated membership contribution database to ensure the viability, adequacy and
responsiveness of the National Health Insurance Program.

The complete list of LBC Express, Inc. branches and its locations
nationwide is available at www.philhealth.gov.ph. Interested
IPMs and employers may also call the Accreditation Division
of Treasury Department

More Pinoys join microfinance - ADB Report

More Pinoys join microfinance

THE NUMBER of active microfinance clients in the Philippines
increased between 2006 and 2008 following the implementation
of a project by the Asian Development Bank (ADB), a report
released yesterday by the multilateral lending agency showed.
The ADB reported that microfinance clients increased by
129.17% to 5.5 million in December 2008, from 2.4 million in
December 2006.

ADB said its $150-million Microfinance Development Program
(MDP), approved on Nov. 22, 2005, helped create a “sound
and market-oriented microfinance sector development path”
for the Philippines.

The project had the goal of helping the Philippine government
in addressing weaknesses in the microfinance sector and help
poor Filipinos access quality financial services.“The objective of
the MDP was to improve household incomes, reduce poverty
and reduce the vulnerability of the poor,” ADB said in the report.

Microfinance is the provision of financial services to lowincome
clients who traditionally lack access to typical banking and
related services.

Microfinance is also the idea that low-income individuals
are capable of lifting themselves out of poverty if given access to
financial services.

The National Credit Council, under the Finance department,
served as the borrower and executing agency for the loan.
Aside from increasing the number of Filipinos who access
microfinance services, the bank said MDP also helped in creating
a total of 2.6 million jobs during the period of its implementation,
along with the increase in the amount of microfinance and in
the number of loan releases.

The ADB report added that performance standards of microfinance
institutions in terms of portfolio quality, efficiency, sustainability outreach ratings
and continued monitoring were also achieved, along with easy
financial transactions through electronic banking and appropriate
rural saving schemes that increased the clients’ savings
mobilization.

“The MDP enhanced the enabling and regulatory environment
as the Bangko Sentral ng Pilipinas formulated rules
and regulations to promote microfinance operations by
banks, allowing microfinance-oriented banks to open branches
anywhere in the country, and promoting electronic banking
with consumer protection, particularly for savings mobilization,”
ADB said.

It added that the Securities and Exchange Commission managed
to comply with the program’s required policy action
of compelling microfinance-oriented non-government organizations
to be transparent and observe full disclosure in their
operations.

Assessing the MDP overall, the multilateral financial institution
said it was “successful” in achieving its objectives with its
high efficiency and likely sustainability.

Finance officials were not immediately available for comment
as of yesterday. — Jo Javan Cerda

From the Business World Online

Tuesday, December 28, 2010

Land Bank to grow corporate lending

Land Bank to grow corporate lending

Monday, 27 December 2010 00:00

STATE-RUN Land Bank of the Philippines is bullish that it could sustain a double-digit growth in corporate lending next year as companies would continue to take advantage of the low interest rate environment. Cecille Borromeo, Land Bank treasurer, told reporters that domestic banks have sufficient resources to address increased demand for corporate capital as firms are projected to be on an expansionary mode to keep up with the growing economy.

“Corporate banking should go up 13 percent next year,” Borromeo said.

She said Land Bank, like most other lenders, have already established a credit line that the corporate sector can tap. These lines can be approved within 24 hours, provided the companies have complied with all the requirements and documentation.

Among those that show a high level of interest to borrow capital from banks are firms in manufacturing, trading, real estate and services, particularly in food, hotels and transport sectors.

Borromeo said companies that have substantial credit lines with Land Bank include conglomerates like San Miguel Corp., the Ayala Group, Metro Pacific Investments Corp. and Filinvest Land Inc.

The executive said that Land Bank has earmarked P110 billion for corporate lending this year. At end-November, the lender is already close to hitting the target.

“We hope there would be more borrowers next year. Banks are very liquid and those funds need to be deployed,” Borromeo said.

The Bangko Sentral ng Pilipinas (BSP) has kept its overnight borrowing or reverse repurchase rate at a record-low of 4 percent and the overnight lending or repurchase rate at 6 percent.

The rates have been steady since July 2009 after the BSP cut a total of 200 basis points from December 2008 to July last year to boost lending activity and stimulate the economy during the US-led global financial crisis.

Borromeo said companies are turning to banks for loans to finance their expansion plans, as well as other capitalization requirements because of stable and low interest rates.
KATRINA MENNEN A. VALDEZ

Saturday, December 25, 2010

DSWD focused on poverty alleviation

Yearender: DSWD focused on poverty alleviation

By Helen Flores (The Philippine Star)
Updated December 25, 2010 12:00 AM

MANILA, Philippines - The Department of Social Welfare and Development (DSWD) under the new administration has focused on improving the government’s poverty alleviation programs, but continues to be criticized for its controversial P21-billion conditional cash transfer (CCT) program.

During her first week in office, Secretary Corazon Soliman announced the convergence of the three DSWD programs – the Pantawid Pamilyang Pilipino Program or 4Ps, Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS), and the Self-Employment Assistance-Kaunlaran (SEA-K) – aimed at enhancing the impact on poverty reduction beyond what each project can accomplish on its own.

Soliman said the DSWD was able to achieve its target of one million beneficiaries this year for the 4Ps, the government’s CCT program.

“I think they did a very good job because the expansion of one million (4Ps beneficiaries) has been achieved,” Soliman told The STAR.

The DSWD will get its biggest budget in history in the proposed outlay for 2011, with P34.2 billion or a 123-percent increase from its 2010 budget.

The bulk of the DSWD budget has been earmarked for the 4Ps initiated under the previous administration.

But the huge increase of the 4Ps budget next year received widespread criticism.

Some lawmakers said the DSWD did not have an efficient monitoring system in place to keep track of disbursements in the CCT program, which was raised from P10 billion to P21 billion.

Soliman said the program is not a dole-out but a “lifesaver” to those drowning in poverty.

“If the family beneficiaries fail to comply with the terms and conditions under 4Ps, their accounts will be suspended,” she said.

Soliman said families who repeatedly fail to comply with the conditions will be removed from the list of beneficiaries.

Under the program, a family receives P1,400 monthly allowance conditioned on their fulfilling certain activities such as keeping children in school.

The program seeks to improve the health and education status of mothers and poor children, respectively, and reduce poverty in the long run.

The DSWD has also intensified its efforts to address the increasing number of abandoned children in the country.

A number of babies, as well as fetuses, were reportedly abandoned in several areas this year, including Baby George Francis, the newborn found inside a trash bin of a Gulf Air flight from Bahrain last Sept. 12.

Soliman said Baby George and his mother, an overseas Filipino worker from Apayao, are still under the custody of the DSWD.

Challenge for 2011

Soliman said she will work very hard to accomplish the three goals she set for herself next year.

“Next year I have three challenges for myself – one is the implementation of the convergence strategy which includes the component of the conditional cash transfer,” she said.

“We’re adding 1.3 million families as beneficiaries by December 2011 to make it 2.3 million.”

Soliman said the DSWD will also expand the coverage of its community-driven development program.

“We’ll be using funds of the Millennium Development Account and additional funding and we will expand it to sustainable livelihood, which means we will be working with the beneficiaries of both the community-driven development and the conditional cash transfer to move them into livelihood programs,” she said.

Soliman said “the second challenge is to institute the performance governance score card, which is the DSWD’s way of measuring their performance.

“It’s a way of instituting measures where from the utility person to the secretary, all know what we are about and what our contribution is to the overall plan of inclusive economic growth and poverty reduction,” she said.

“It would encourage and make sure that we are transparent and accountable.”

Soliman said the DSWD plans to post in its website all the agency’s disbursements.

“I hope we will be able to put up in our web a tracking of our disbursements,” she said.

Soliman’s third challenge is to rid the country of street children by next year.

“The third challenge is to move the street children and street families into stable, safe and sustainable communities so they don’t have to live in the streets or in the islands of our streets,” she said.

The DSWD has embarked on a comprehensive program for street families and children, which aims to extend social protection services for immediate relief and provide poverty reduction programs for sustainable solutions.

Job well done

Soliman said she was satisfied with the DSWD’s performance this year and gave her co-workers a “very good” rating.

“It is important that the agency is organized, the regional and top officials of the agency have committed to ensuring that the programs will be implemented well and social services will be efficiently delivered to the poor,” she said.

Soliman said she was elated by the results of recent polls by the Social Weather Stations and Pulse Asia where she received the highest satisfaction rating among Cabinet officials.

“I think the reason why we received high ratings in surveys is because of the hard work and commitment of my fellow workers,” she said

“It’s a credit to the department, the professionalism, commitment, and passion of the people. Because they are always No. 1 or 2 regardless of who the secretary is.”

Soliman was named DSWD secretary in 2001 during the term of former President Gloria Macapagal-Arroyo.

She is part of the so-called “Hyatt 10,” a group of former senior government officials who called for the resignation of Arroyo at the height of the “Hello, Garci” scandal in 2005.

IFC to guarantee up to 50% of BDO loans for energy efficiency and RE projects

IFC to guarantee up to 50% of BDO loans for energy efficiency and RE projects

December 24, 2010, 5:26pm

MANILA, Philippines – The International Finance Corporation (IFC), a member of the World Bank Group, and Banco de Oro Unibank Inc. signed a risk-sharing facility that aims to encourage private enterprises in the Philippines to invest in sustainable-energy projects and become more profitable, while addressing climate change.

IFC will guarantee up to 50 percent of Banco de Oro Unibank’s loans for energy-efficiency and renewable-energy projects through the bank’s Sustainable Energy Finance program. The program shows that clean energy combined with energy-efficiency solutions can help companies improve profitability and at the same time help lower greenhouse-gas emissions.

“This is an important agreement for IFC,” said Jesse Ang, IFC Resident Representative for the Philippines. “It will enable Banco de Oro Unibank to expand its reach, particularly among small and medium enterprises that need financial support to help lower their energy costs and improve competitiveness.”

Nestor Tan, President of Banco de Oro Unibank, said, “The risk-sharing facility allows the bank to leverage IFC’s support and global experience to successfully develop the market for sustainable-energy investments.”

IFC and Banco de Oro Unibank have been partners since 2002. IFC’s support for the Sustainable Energy Finance program builds on a $150 million equity investment in the bank earlier this year and a $90 million subordinated note investment in 2007.