Sunday, April 10, 2011

BSP okays 20% risk weight of bank loans

BSP okays 20% risk weight of bank loans

MB – Sun, Apr 3, 2011 1:58 PM PHT

MANILA, Philippines -- The Bangko Sentral ng Pilipinas (BSP) has approved a 20 percent risk weighting of bank loans guaranteed by the P4.5-billion Department of Agriculture (DA)-supervised Agricultural Guarantee Fund Pool (AGFP), which was created three years ago to encourage conduit banks and to cushion risks of lending to the agricultural sector.

The BSP also reiterated its suggestion earlier, and now for implementation, of dividing the fund into two separate funds. One will be used solely for guaranteeing loans of bank conduits and the other fund set up as a guarantee for non-banks, according to a memo presented to the Monetary Board on the week the new Circular No. 713 called the Risk Weighting of Bank Loans Guaranteed by AGFP, was approved. The circular also instructed that the maximum allowable leveraging ratio of the fund maintained for bank loans should be invested in assets that are zero risk weighted under BSP's risk-based capital adequacy framework.

Another revision made to the AGFP guidelines is that conduit banks will include universal and commercial banks besides thrift and rural banks, and the loans and guarantees will be extended to fisherfolk, not just small farmers.

On December 7, two months before approval of the new circular, the AGFP forwarded to the BSP its amended implementing rules and regulations, signed by the DA secretary. In the letter, the amendment that was incorporated included the allocation of 50 percent of the fund for conduit banks amounting to P2.24 billion.
Credit conduit banks, as defined by the BSP, are banks such as commercial, thrift or rural banks, or non-banks (co-operatives, SMEs, NGOs) allowed to provide financial assistance to small farmers and fisherfolk.

The fund allocation has been divided to 50 percent equal or P2.42 billion each to banks and non-banks.

The AGFP IRR has also been amended three times since 2008. The latest amendment now covers loans granted to fisherfolk in addition to palay farmers. Conduit banks were also expanded to include commercial and universal banks, not just thrift or rural banks.


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Banking system remains strong, stable


Banking system remains strong, stable
BSP sees no threat from BF closure
By Michelle Remo
Philippine Daily Inquirer


MANILA, Philippines—The failure of Banco Filipino Mortgage and Savings Bank, which was placed under receivership on Thursday, does not pose any threat to the strong and stable banking system of the country.

This was according to regulators, who said Banco Filipino was an outlier in the industry given that its counterparts have been profitable and able to meet the growing financial services requirements of Filipino depositors and borrowers.

Amando Tetangco Jr., governor of the Bangko Sentral ng Pilipinas (BSP), said Friday that the closure of Banco Filipino was not expected to pose a systemic risk. He expressed optimism that the public would remain confident of the country’s banking sector.

“The overall banking system remains sound and stable. There is no negative impact [of the closure of Banco Filipino] on the banking system,” Tetangco stressed.

Cristina Orbeta, executive vice president of Philippine Deposit Insurance Corp. (PDIC), echoed the statement from the central bank chief by saying that regulators were keen on keeping the “financial sector stability” that the country currently enjoys.

Orbeta said one way to maintain confidence of the public on the banking system was to promptly service deposit insurance claims following bank closures.

In a press conference on Friday, Orbeta assured depositors of Banco Filipino that PDIC would service all valid deposit insurance claims and expedite the process of validation of those claims.

Insured deposits

Preliminary figures showed that there were P9.4 billion worth of insured deposits in Banco Filipino.

“This [amount of insured deposits] is something we can easily pay,” Orbeta said, noting that the deposit insurance fund managed by PDIC stood at P64.6 billion.

The policymaking Monetary Board of the central bank decided to place Banco Filipino under the receivership of PDIC after the thrift bank had been on a bank holiday for three days, failing to service withdrawals by its clients.

The decision also came amid losses of Banco Filipino, which regulators said had been losing an average of P2 billion a year since 2007 and that its liabilities far outweighed its assets.

The BSP said the condition of Banco Filipino was in contrast to that of the overall banking system.

Latest documents from the central bank showed that resources of the Philippine banking system amounted to P6.8 trillion as of the end of October last year, up nearly 9 percent from P6.2 trillion the year before.

The BSP said it expected the country’s overall banking sector to remain strong this year, projecting a further rise in its profits and resources.

Consolidation

But while the overall banking system—whose growth was driven mainly by universal, commercial, and thrift banks—was assessed by regulators to be financially sound and stable, there has been a spate of closures of smaller players, particularly rural banks.

According to PDIC, Banco Filipino has added to the more than 500 banks that were currently under its receivership. Most of these banks are small, rural banks that failed to meet the higher capitalization requirements of regulators.

This backdrop has prompted the BSP and PDIC to push for consolidation in the banking sector, particularly one that involves acquisition by bigger industry players of some undercapitalized rural banks.

The BSP and PDIC are offering incentives to financially strong banks that will acquire rural banks.


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BSP dangles 8 incentives to rural banks under SPRB


BSP dangles 8 incentives to rural banks under SPRB

Manila Bulletin

The Bangko Sentral ng Pilipinas (BSP) will grant eight merger and consolidation incentives to rural banks participating in the P5-billion Strengthening Program for Rural Banks (SPRB) with the Philippine Deposit Insurance Corp. (PDIC), including condonation, restructuring and waiver of past due BSP loans and all due dividends.

Based on the BSP Guidelines on the Grant of Regulatory Relief, rural banks acting as "white knights" may avail of the following perks:

*Conversion of the existing head offices, branches and/or extension offices of the merging or consolidating rural banks into head office, branches or extension offices of the merged/consolidated rural bank;

*Relocation/opening of existing/approved but unopened branches, extension offices and/or other banking offices of the merged/consolidated rural bank within two years from date of merger or consolidation, subject to applicable requirements on relocation of branches, extension offices and/or other banking offices;

*Condonation of liquidated damages on past due rediscounting/emergency loans with the BSP and/or monetary penalties for violation of BSP issuances on rediscounting of the eligible rural banks as of the end of the month immediately preceding the date of request for the loan restructuring;

*Restructuring of past due rediscounting/emergency loans of the eligible rural banks with the BSP as of the end of the month immediately preceding the date of request for loan restructuring;

*Waiver of all dividends due on the Land Bank of the Philippines preferred shares of stock of the eligible rural banks as of date of merger and consolidation;

*Staggered redemption of matured Land Bank preferred shares of stock of the eligible rural banks, representing the rediscounting arrearages with the BSP converted into Land Bank equity;

*Rediscount ceiling of at 150 percent of the adjusted capital accounts of the merged/consolidated rural bank for a period of one year reckoned from the date of merger or consolidation; and

*Waiver of monetary penalties imposed on the eligible rural banks for violation of existing laws and BSP rules and regulations, except penalties accruing to other parties.

As part of the arrangement between BSP and PDIC, an SPRB lane was established at the PDIC office to expedite the processing and approval of SPRB applications.


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Teachers must cross a sea to get their pay



Teachers must cross a sea to get their pay
By Tarra Quismundo
Philippine Daily Inquirer
First Posted 04:26:00 04/10/2011

MANILA, Philippines—With no choice but to comply, more than 100 teachers on Sibuyan Island, Romblon, on Saturday made the long trip to the province's main island, chipping in for the P80,000 boat rental, to enroll in the Department of Education's (DepEd) automated payroll system.

Nazarine Romano, principal at Don Carlos Mejias Municipal High School in San Fernando town on the island, renewed the teachers' appeal for any government service bank to install an automated teller machine (ATM) on Sibuyan.

This would spare the teachers the from risks and the expense of having to cross the Sibuyan Sea just to get their wages — a trip that in good weather takes at least six hours one way.

“We are asking the DepEd to please facilitate the installation of an ATM in San Fernando,” Romano told the Inquirer on Saturday.

He corresponded with the Inquirer via text while on the long sea trip to Odiongan town on Tablas Island, where the 110 teachers had arranged to go to the local Land Bank branch on a weekend to open ATM accounts to receive their salaries. An earlier batch of teachers had left Sibuyan on Friday for Tablas, Romano said.

Special boat trips

As the regular trip from San Fernando to Odiongan usually takes several rides by land and sea, the teachers arranged for special direct boat trips, renting two boats for about P750 per passenger to cover the P80,000 fee for both boats.

The regular route, which includes long jeepney and boat rides, costs at least P1,000 both ways, said former San Fernando Mayor Nanette Tansingco.

The DepEd had long been pushing to automate its payroll system using ATMs to pay the wages of 600,000 employees nationwide. This saves the government the cost of printing and sending out paychecks of P6 a piece.

Regional finance officers for Region IV-B (Mimaropa) have explained that consultations with DepEd personnel on Sibuyan had been held and they promised to facilitate the installation of an ATM on the island.

“The DepEd can save P6 per employee every month, but an ordinary teacher has to spend hundreds just to get their salary,” said Romano.

Tansingco said Sibuyan residents had long been appealing for government banks to establish a presence on the island
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Globe launches Facebook service



Globe launches Facebook service
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 04:10:00 04/09/2011

MANILA, Philippines—Filipinos who can’t stand five minutes without checking their Facebook accounts now have a way to stay connected with their “friends” at a cheaper cost.

Globe Telecom Inc. announced in a statement the launch of its Super Facebook service, allowing users to enjoy their favorite social networking site on their mobile phones at a very affordable rate.

Exclusive to Globe prepaid subscribers, Globe Super Facebook is a mobile surfing plan that allows subscribers to surf on Facebook on their mobile phones for five straight hours for only P10.

The new service is part of the company’s efforts to increase the usage of Internet services with mobile phones.

This means that Globe Super Facebook users can enjoy Facebook for only P2 an hour. To access Facebook on their mobile phones, subscribers can open their mobile browsers and key in m.facebook.com, the company said.

“As one of the most popular social networking sites in the world today, Facebook continues to evolve to provide its users with a slew of interesting features,” Globe portfolio management head Joanna Africa said.

“Through this offer, we have brought the popularity of Facebook to our subscribers’ mobile phones, making it more convenient for them to truly enjoy Facebook, their way,” she said.

To register for the service, Globe prepaid subscribers can text SUPERFB10 to 8888. A maintaining balance of P1 is required to enjoy the service.

Meanwhile, users who surf Facebook from time to time can subscribe to Globe PowerSurf, which is a consumable mobile surfing plan. Globe PowerSurf allows users to surf and stop as they wish and have full control on how they use their mobile Internet minutes.



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CAPACITY BUILDING of MFIs



CAPACITY BUILDING of MFIs

Among the challenges of microfinance is ensuring the constant supply and continuous professional development of field staff to help MFIs reach more of the poor.  In the next five years, the microfinance sector will require, at least, 10,000 new loan officers. The sourcing and training of these loan officers and other personnel is a challenge that the PinoyME Capacity Building Working Group seeks to address by offering a microfinance course in colleges and universities.

Led by Professor Ron Chua, Academic Champion of Microfinance in MBA Project at the Asian Institute of Management, the Working Group has designed a dual training system and competency-based education for microfinance (DTS-CBE) to provide students with the knowledge, skills, and attitudes to be a proficient microfinance officer. To date, six schools located in priority areas have agreed to offer both the TESDA and CHED track for loan officers.

The DTS-CBE offers tremendous potential to professionalize the human resources of the microfinance sector. Firstly, the training expense for new loan officers is reduced as graduates already have the requisite skills. Moreover, as the curriculum is “ladderized”, the loan officer can continue his/her studies and earn a degree even while working. Field staff meanwhile who were unable to finish a degree will have the opportunity for further studies that are related to their profession. The presence of DTS-CBE may also attract many enrollees because of the prospect of immediate employment.



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Lack of president stymies credit information bureau’s operations

Lack of president stymies credit information bureau's operations

A CENTRAL credit information bureau cannot start operating because Malacañang has yet to appoint its top executive.
"There is no president yet," Fe B. Barin, Securities and Exchange Commission (SEC) chairman, told BusinessWorld Friday night.

"[The president] is necessary to draw up a plan. We have to decide on the organizational structure of the corporation. And also... where to put up the office," she added.

The implementing guidelines of Republic Act (RA) 9510 establishing a credit information system state that the President of the Philippines shall appoint seven to the Credit Information Corp.'s board of directors, including the corporation's president, who shall also serve as an ex officio board member.

Five board members are to come from the private sector, and two independent directors shall be appointed as well.

The SEC chairman will serve as the board's ex officio chairman.

Ms. Barin said the Credit Information Corp.'s board is almost complete and the government and the private sector have come up with the initial funding to set it up.

But since President Benigno S. C. Aquino III has yet to name a president for the
corporation, she said she cannot tell when operations can start.

"No new appointments yet [for the Credit Information Corp.], according to the Office of the Executive Secretary," said Presidential Legal Counsel Eduardo V. de Mesa in a text message yesterday.

The Credit Information Corp., according to the law, has an authorized capital stock of P500 million, divided into 1.25 million common shares with par value of P100 each and 1.875 million preferred shares with par value of P200 each.

The government must contribute P75 million, and the private sector, P50 million.

Ms. Barin said the government has provided P17.5 million, while the private sector has come up with P12 million, which are enough to set up the corporation.

Six private sector groups represented in the Credit Information Corp. have contributed P2 million each, she said.

These are: Chamber of Thrift Banks formerly represented by past President Pascual M. Garcia III but to be replaced by the new President Patrick D Cheng; the Bankers Association of the Philippines (BAP) represented by its Director Omar T. Mier, Credit Card Association of the Philippines represented by Executive Director Elizabeth L. Legarda; Philippine Credit Reporting Alliance, Inc. represented by Marlo R. Cruz; the Rural Bankers Association of the Philippines (RBAP) represented by President Corazon L. Miller; and the Philippine Cooperative Center represented by Fr. Mar R. Arenas.

In an email last Tuesday, Ms. Barin said the six have been appointed by Malacañang to the Credit Information Corp.'s board: Candido R. Belmonte, Priscilla Marie T. Abante, Alfredo Ramon Herrera, Wilson U. Tecson, Richard Alvin M. Nalupta and Dalmacio L. Lim.

Ms. Barin said she has yet to discuss with Budget Secretary Florencio B. Abad the funds needed to complete the government's counterpart.

Regarding the private sector's contribution, she said: "It is not fair to ask the private groups to pay immediately when you don't have the government counterpart."

RA 9510 or the Credit Information System Act of 2008 seeks to establish a centralized credit information system to improve the availability of credit, especially to micro, small and medium enterprises.

The Credit Information Corp. shall collect credit data from banks, including their subsidiaries and affiliates, life insurance companies, credit card companies and other entities that maintain credit facilities.These same "submitting entities" may access the data for their use.

Industry players, however, said the absence of a central credit information bureau has not curtailed their operations.
Banco de Oro Unibank, Inc. President Nestor V. Tan said in a text message last Tuesday pointed out: "They (banks) are already used to operating without it."

In a separate text message, Cesar O. Virtusio, BAP executive director, said banks' lending operations have not been affected.

"In addition to banks' [information], they (banks) may also access the BAP credit bureau," he said.

In a phone interview yesterday, RBAP's Ms. Miller said: "In the absence of a [central] credit bureau, I am encouraging the rural banks to tap the BAP's negative file information system to check on prospective clients' profile."

Ms. Miller noted that although BAP's credit bureau is limited to information on "bad accounts," it will still be helpful in coming up with precautionary measures such as a higher collateral for those with negative records. -- Louella D. Desiderio with a report from Ann Rozainne R. Gregorio

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SSS tapping cooperatives as collection agents

Posted on March 17, 2011 08:47:36 PM

Pension fund SSS tapping cooperatives as collection agents

THE SOCIAL Security System (SSS), the pension fund for private sector workers, is tapping cooperatives as additional collection agents for members’ contributions and loan payments.

“Members may pay their regular contributions and remit loan payments through SSS-accredited cooperatives, giving them an easy and convenient remittance and fast posting of payments,” SSS President and Chief Executive Officer Emilio S. de Quiros was quoted as saying in a statement yesterday.

“Self-employed and voluntary members who don’t have employers to facilitate their payments every month [may go to accredited cooperatives],” he added.

Cooperatives can apply at any SSS branch nationwide for accreditation.

“They just have to submit an accomplished application form that they can get from any branch with the 14 supporting documents...,” Mr. de Quiros said.

Articles of cooperation, by-laws, certification of registration with the Cooperative Development Authority (CDA), endorsement from any government agency, audited financial statements for the last three years, names and addresses of present members of the board are a few of the required documents.

“An SSS accreditation is an opportunity for cooperatives to earn additional income because SSS will pay them a service charge per transaction,” Mr. De Quiros said.

In a text message to BusinessWorld, Mr. de Quiros said, “[SSS] is paying each cooperative P6 per transaction, but we have not accredited any cooperative yet and the accreditation period is ongoing.”

He stressed that a cooperative applying for accreditation must be registered with the CDA as a primary cooperative and must have been in existence for at least three years immediately preceding the date of its application.”

“The cooperative must pass our financial evaluation and should be in good standing with SSS as a registered employer, which means it has no delinquent contributions and loan amortizations,” he added.

CDA data shows there are a total of 78,611 registered cooperatives in the country, of which 23,800 are active and have a combined membership of over 5.8 million. -- Ann Rozainne R. Gregorio

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ENCASH revenue up 77% in 2010


Posted on March 04, 2011 06:54:37 PM

ENCASH revenue up 77% in 2010

Independent ATM deployer Electronic Network Cash Tellers, Inc. (ENCASH) reported a three-fourths increase in profit in 2010, as it set up more automated teller machines in the provinces.

"Our revenue last year amounted to P64 million, higher than the P36 million we made in 2009 due to having the right business partners, right ATM locations and tight management compliance," ENCASH President Eric J. Severino told BusinessWorld in a phone interview on Friday.

He said EBITDA -- earnings before interest, taxes, depreciation and amortization -- amounted to P13 million last year.

ENCASH with its 139 rural bank and cooperative partners, had a total of 263 units in 51 provinces last year, up from 85 partners and 171 ATMs in 2009.

The number of ATMs increased to 272 units as of end-February.

Mr. Severino said, "the more ATM machines we deploy, the more transactions could take place, which means higher revenue for us."

ENCASH charges a "convenience fee" that ranges from P28 to P99 for every transaction.

"The farther the location of our ATM, the higher the fee we charge," Mr. Severino said.

The total cash dispensed last year increased by 62% from a year ago, he added.

"We have two types of location: the ’in lobby’ where ATMs are placed inside the banks and the ’through the wall’ where ATMs are put outside the premises of a bank," he shared.

Mr. Severino said ENCASH targets to deploy around 200 to 300 ATM units this year. -- Ann Rozainne R. Gregorio



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Microfinance gains ground

BY MIA FRANCES AGCAOILI and JACKSON UBIAS

Microfinance gains ground

When the poor and the underserved need to borrow money, they often turn to informal lenders who slap them with exorbitant interest rates.

As an alternative, microfinance is starting to get noticed. Aside from the poor and low-income earners, small household-based entrepreneurs have begun to tap microfinance to cover the short-term needs of their enterprises.

Unknown to many, the Philippines has actually had a longer history of microfinance. More than 400 years ago, the Spanish colonizers granted some form of loans to local farmers to prop up production of exportable goods such as tobacco.

The American colonizers also provided similar lending programs to support various social and economic goals

Direct credit programs such as these were formally institutionalized in the country in the 1970s via government-subsidized loans to the poor. Serious loan recovery problems, however, led to the decline of the program in the mid-1980s.

The subsidies were also cornered mostly by the more affluent borrowers, thereby defeating the purpose of targeting poor and deserving recipients. Still, it was not totally stamped out, and it persisted even through the 1990s.

These days, the government is not the only source of microfinance. Rural cooperative banks, non-government organizations, and credit unions or cooperatives all provide some form of micro-lending programs.

This is perhaps inspired by the success of Grameen Bank in Bangladesh, which underscores the capacity of microfinance to help the poor progress out of poverty.
Still, microfinance is not a cure-all approach to poverty.

In fact, even if it aims to target the less privileged, beneficiaries still have to satisfy certain criteria. The entrepreneurial poor, for example, will need to demonstrate adequately their capacity in managing a successful business.
Ultimately, and just like the bigger, more established lending channels, the success of microfinance depends on ensuring that the loans it gives out are also repaid.
The market for such loans exists and, unfortunately, persists in the Philippines.
Data from the 2006 Family Income and Expenditure Survey showed that about 33% of Filipinos (or about 27% of households) live under poverty. In addition, over 40% of families in rural areas in the country are poor.

There clearly is much room for microfinance to serve the rural poor, but its success entails significant risks or even prerequisites. The productivity of these potential beneficiaries are highly dependent on agriculture.

Unless support infrastructure such as irrigation and farm-to-market roads are provided adequately, their incomes, and thus capacities to repay their loans, will remain impaired.

That is, microfinance and infrastructure can result in increased agricultural production and productivity, and one without the other seems inadequate in addressing rural poverty.

At any rate, it may take some time before the country reaps the full rewards of microfinance. As it is, microfinance appears to be a short-term strategy to address poverty.

What it needs are complementary strategies -- specifically, those aimed at improving the capacities of beneficiaries to earn incomes and repay their obligations -- to ensure its effectiveness and sustainability in the long run.

The Institute for Development and Econometric Analysis, Inc. (IDEA) is an economic think-tank based in the University of the Philippines - Diliman. For inquiries on IDEA, please contact Eduard Robleza at edjrobleza@idea.org.ph


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BSP says banking services now better

BSP says banking services now better

Filipinos have better access to banking services now compared to 10 years ago with the continued expansion in bank branches, even as the number of lenders declines, a senior Bangko Sentral ng Pilipinas (BSP) official said.

BSP Deputy Governor Nestor A. Espenilla, Jr. told reporters on Tuesday night that while the number of banks has fallen from a decade ago, the delivery of financial services continues to improve with more and more bank branches being added.

“If you ask me, banking services are far more accessible today than it was 10 years ago even though the number of head offices of individual banks is lower,” he said.

Data from the BSP showed that the number of bank head offices -- essentially the number of universal and commercial banks, thrift banks, and rural and cooperative banks -- fell to 797 as of September 2009 from 947 in December 2000.

The number of bank branches, meanwhile, reached 7,117 as of September from 6,607 in 2000.

Universal and commercial banks accounted for more than three-fifths of all branches, followed by rural and cooperative banks (19.5%), and thrift banks (17.21%).

The number of banks fell, Mr. Espenilla said, due to closures and mergers and consolidation.

Banks added branches when the BSP relaxed rules on bank branching in 2005.

That year, the BSP lifted the almost six-year moratorium on bank branching that allowed qualified banks to establish branches anywhere in the Philippines except in the cities of Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig and Quezon, and the Municipality of San Juan.

The BSP likewise allowed microfinance-oriented banks and microfinance-oriented branches of regular banks that cater primarily to the credit needs of micro-enterprises to be established anywhere, even in the still closed areas.

“In addition to the expansion of physical offices of banks, the non-traditional delivery channels are also growing,” Mr. Espenilla said, with the number of automated teller machines rising to 8,207 as of September from 3,680 in 2000.

He added that electronic banking services such as electronic wallets, cash cards and remittance centers are also growing.

Rural banks, meanwhile, accounted for almost four-fifths of the total number of head offices, but Mr. Espenilla noted that the sector holds less than 3% of the banking system’s total assets.

“[But] their total assets and deposits continue to grow. Rural banks are also very liquid, and their CAR (capital adequacy ratio) is well above what is required... ,” he said. “The only thing not growing is the number of rural bank offices because of consolidation.”

Lastest BSP data showed that the rural banking industry has a capital adequacy ratio of 18.41%, higher than the required 10% regulatory requirement.

Last month, the BSP said the consolidation in the banking industry would continue, led by rural banks, due to the P5 billion-fund it raised together with the Philippine Deposit Insurance Corp., which can be tapped for mergers and acquisitions. -- Don Gil K. Carreon
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FICCO Cooperative to establish network of coop banks


FICCO Cooperative to establish network of 18 coop bank branches

DAVAO CITY -- The First Community Cooperative (Ficco) based in Cagayan de Oro City is establishing a network of banks in areas where it has a strong presence.

Vicente B. Rana, Ficco chief executive officer, said his group is only awaiting the approval of the Bangko Sentral ng Pilipinas before it will launch its rural banks.

The cooperative has acquired three small banks from the Cooperative Bank of Davao del Sur, the Cooperative Bank of Surigao del Sur and the Cooperative Bank of Misamis Oriental.

The banks will operate under the name Southern Philippines Cooperative Bank. “We want to grow our banking units to better serve our members,” Mr. Rana told BusinessWorld.

The cooperative is planning to set up 18 bank branches within the next two years, said Jesus G. Cornito, a member of the cooperative’s board of directors.

The banks will complement Ficco’s main business, which is 90% lending.

“With the banks, we can serve even those that are not members of the cooperative,” he explained.

Lending at an 8.5% interest annually, the two officials claimed this will result in more members and more business.

“The cooperative will be in a better position to expand,” Mr. Corinto added, referring to the plan to enter both the Visayas and the Makati City markets.

Mr. Rana added the expansion plan is intended to address the need for a cheaper lending window, particularly for borrowers who have long been clients of usurers who ask for up to 20% monthly interest rates on day-to-day collection basis.

The expansion, particularly the setting up of banking units, he added, will also help address the need for microfinance borrowers to become members of a strong cooperative as well as provide them with cheaper loans that will help them grow their businesses.

The Mindanao Business Council earlier pointed out that even with current government financial packages, small businesses still find it difficult to borrow.

Ficco has total resources amounting to over P3 billion and a capital base of about P1.3 billion in the first quarter of 2009. It was among the first cooperatives established in Mindanao. Ficco was established by Jesuit priest William Masterson as the Ateneo Cooperative Credit Union in July 1954 in Cagayan de Oro City.

Ficco currently has 56 cooperative offices all over Mindanao and a membership of about 150,000. -- Carmelito Q. Francisco


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ADB raises Manila’s growth forecast

ADB raises Manila's growth forecast

By Darwin G. Amojelar, Senior Reporter

THE Asian Development Bank (ADB) on Wednesday raised its economic growth forecast for the Philippines on strong investment inflows and consumption, but warned of a worsening unemployment situation.

In its Asian Development Outlook, the Manila-based lender said the country's gross domestic product (GDP) is likely to expand five percent this year, up from an earlier forecast of 4.6 percent made in September.
"Growth will continue to be driven by investment and consumption," the ADB said.

For 2012, the ADB sees Philippine GDP expanding by 5.3 percent.
A key measure of economic performance, GDP is the amount of final goods and services produced in the country.

The ADB projected that the Indonesian economy will grow 6.4 percent this year and 5.3 percent in 2012; Malaysia, 5.3 percent for both years; Singapore, 5.5 [percent] and 4.8 percent; Thailand, 4.5 [percent] and 4.8 percent; and Vietnam, 6.1 [percent] and 6.7 percent.

The lender's forecast for the Philippines is lower than the 7 percent to 8 percent economic growth target of the Aquino administration in the next six years.

The ADB said its economic outlook for the next two years assumes that monetary policy will be gradually normalized, and that fiscal conditions will be less accommodating amid government commitments to trim the budget deficit.
With rising fuel prices, the ADB said Philippine inflation is forecast to rise to 4.9 percent this year, before easing to 4.3 percent next year.

In the first three months, the country's inflation averaged 4.1 percent, or within the Bangko Sentral ng Pilipinas (BSP) target of between three and five percent.
"Our outlook for the Philippines hinges on the government following through on its plans to reduce the fiscal deficit, and improve governance and the business environment. Jump-starting the planned public-private partnerships will give investment a strong boost," Neeraj Jain, ADB country director for the Philippines said.

The ADB also said that the lackluster growth in employment is still a "chronic problem" in the country.

Despite strong economic growth last year, the unemployment rate fell only slightly to 7.3 percent.

"The underemployment rate also remained high at about 20 percent. The proportion of workers classified as vulnerable—unpaid family members and the self-employed, most of whom are in the informal sector—has declined since 2006, but remains high at nearly 42 percent," the lender said.

Moreover, the lack of jobs drives large numbers of Filipinos to work abroad, the ADB said.

"The lack of jobs has undermined efforts to reduce poverty, with the number of poor actually rising by over three million in the six years to 2009," the lender said.
Jain said most jobs shifted from the agricultural sector to the services sector, while employment in the industrial sector remained practically stagnant over the last three decades.

"And, therefore, labor productivity in the Philippines has insignificantly grown over the last 30 years. There's been practically less than one percent increase in labor productivity in the Philippines over the last three years and that to us is the central issue which explains why poverty has been most abundant in the Philippines," Jain said.

Under the draft Medium Term Philippine Development Plant (MTPDP) for 2011 to 2016, the Aquino administration plans to create an average of a million jobs a year, primarily in the industry and services sectors, with the agriculture sector remaining a net shedder of jobs.

Of the six million jobs target over the plan period, two million will be in the micro, small and medium enterprise (MSME) sector.

The plan also aims for 7.7 million tourism jobs by the end of the plan period, and a doubling of visitor arrivals from three million in 2009 to 6.3 million by 2016, with tourism receipts hitting $4.5 billion.

"If the labor force grows at 2.75-percent annually, the unemployment rate should hover at 6.8 percent to 7.2 percent in the plan period, although it should be noted these numbers do not factor in possible reversals in overseas migration trends as more domestic jobs are created," the draft MTPDP read.


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Rural bankers embrace more transparent services

Rural bankers embrace more transparent services

MAKING the pricing of bank products transparent has lately been a hot topic among bankers in line with the global trend towards accountability in the aftermath of a financial turmoil that brought down even the world’s banking giants.

It is widely held that the debacle was caused by fraud and greed and the lack of transparency among these dominant financial institutions.

Last March, the Rural Bankers Association of the Philippines (RBAP) and MFTransparency, a global network advocating transparency among microfinance institutions, and the Microfinance Council of the Philippines held the Transparent Pricing Initiative forum to promote primarily responsibility among financial institutions in providing information to their clients.

Gladly, participants in the timely event embraced the need for more openness in providing accurate information to depositors primarily on interest rates applied on loans.

Emerging economies such as the Philippines are in the process of strengthening institutions and processes to allow equitable economic growth that would include most of the population and this requires the adoption of social principles such as ethical practices in business.

The need for transparency in pricing was, for instance, the basis for a requirement for banks to post the “Truth In Lending Act” in their premises as a guide for the need on accuracy, transparency, and fairness in the provision of financial services.
The rural bank industry, which has been the leader among the Philippine banking sector to expand microfinance services, takes great care to assure consumer protection and the new drive to support transparent pricing is part of this commitment.

Following the series of nationwide workshops, MFTransparency will collect pricing data from all major microfinance banks, rural banks, NGOs, and credit cooperatives that will be published with descriptive and contextual information to illustrate the dynamics of microfinance pricing in the local market.

From these data, MFTransparency will also develop educational and training materials for specific audiences including consumers of microfinance products and the management and staff of rural banks and other microfinance institutions.
MFTransparency, based in the United States, had organized transparent pricing efforts in India, Cambodia, Bangladesh, Azerbaijan, Bosnia, Kenya, Malawi, Uganda, Rwanda, South Africa, Ghana, Senegal, Burkina Faso, Togo, Benin, Mali, Niger, Bolivia, Ecuador, Argentina, Colombia and Peru.

RBAP, the Microfinance Council of the Philippines, Grameen Bank’s Dr. Muhammad Yunus, Elizabeth Littlefield, former CEO of Consultative Group to Assist the Poor (CGAP) and more than 700 industry professionals and organizations have committed to transparent pricing by endorsing MFTransparency and its initiative.
The issue of pricing is seen as symbolic of the rural banking industry’s commitment to provide financial services to the less economically endowed majority of the population and who would benefit the most from accurate information. During the Manila MFTransparency workshop, RBAP President Cora Miller summed up the proactive approach of the sector by sharing that “by demonstrating our seriousness in tackling these issues, we show to the world that the Philippine microfinance industry is at the forefront of change and remains among the best!”
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Saturday, April 9, 2011

Outsourcing industry sales grow to $8.9 billion in 2010

Outsourcing industry sales grow to $8.9 billion in 2010

THE COUNTRY’S business process outsourcing (BPO) sector recorded $8.9 billion in revenues last year, a 26% growth from 2009, industry officials said in a statement last Wednesday.

The industry also recorded 525,000 jobs, up 24% from 2009.

Martin E. Crisostomo, Business Processing Association of the Philippines (BPA/P) executive director for external affairs, said in a phone interview yesterday that growth was due to the strong performance of voice-based BPO -- the Philippines’ traditional strength -- which accounted for 65% of total revenues. He said the group expects revenues to rise further to $11 billion this year.

BPA/P Chairman Alfredo I. Ayala said in the statement that most segments of the industry posted robust growth, with its biggest sector -- contact centers -- growing 21% to $6.1 billion and accounting for 344,000 jobs.

This made the Philippines overtake India as the largest contact center hub in the world, he claimed.

"We achieved robust growth in all major sectors of the industry: voice-based BPO, non-voice business support and complex services, and information technology," Mr. Ayala said.

"We have solidified our global leading position, with our agents providing the best customer service in the world," Contact Center Association of the Philippines President Benedict C. Hernandez added separately.

Moreover, smaller outsourcing sectors like IT services, transcription, animation and game development have recovered from the global financial crisis, as buyers in developed markets have resumed placing orders and started the implementation of stalled contracts, the statement read further.

However, engineering and design services have not yet recovered, with BPA/P Senior Executive Director Gillian Joyce G. Virata noting that related industries in the United States and the Middle East which rely on the Philippines have yet to pick up. -- A. M. G. Roa
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Deal on micro-finance courses inked

Deal on micro-finance courses inked


Three institutions signed a memorandum of understanding (MOU) that will upscale the micro-finance sector in the country through human resource development.

This is to address the challenge in the recruitment of quality human resources to fill in the positions in the micro-finance sector.

The Ramon Aboitiz Foundation Inc. (RAFI) signed the MOU with the University of San Carlos (USC) College of Commerce and PinoyME Foundation last March 2.

RAFI Micro-finance executive director Ma. Theresa Catipay, USC president Fr. Dionisio Miranda, SVD, and PinoyME Foundation president and chief executive officer Danilo Songco represented the three parties in the signing.

The signing of the MOU came after the partner’s forum on dual training system (DTS)-competency based education of the micro-finance capacity program held last March 1 at USC.

Under the MOU, the University of San Carlos will integrate micro-finance courses in its Business Administration curriculum by rolling out a ladderized program using a competency-based curriculum and a DTS.

The DTS will provide students with two venues of learning—the school and the industry—where they can learn how to be competent loan officer, team leader and branch manager.

RAFI Micro-finance will cooperate with USC to enhance the capability of their human resource and that of the micro-finance sector.

With the support of Hanns Seidel Foundation/Germany, PinoyME will provide technical support to USC, including the competency-based curriculum, the copyrighted learning materials, technical assistance, and training of faculty on DTS management.

The ladderized curriculum will allow the students to go through the six-month Tesda-accredited certificate course for loan officers. If the student pursues a four-year course, he or she will graduate with the competency of an MFI branch manager.

A two-year associate course is also available. At the end of each course, the student has a high chance of direct employment by an MFI.
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Consumer loans rise 14%



Consumer loans rise 14%

BORROWINGS TO finance big-ticket items such as homes and cars pushed up universal, commercial and thrift banks’ consumer loans by 14.4% last year compared to the year before.

Banks extended 24% more auto loans last year compared to 2009.
Data released by the Bangko Sentral ng Pilipinas yesterday showed consumer loans totaling P472.6 billion as of December, rising from P413.12 billion a year earlier.

The increase pushed the share of consumer loans to 16% from 15.2% of banks’ total loan portfolio.

The highest increases were noted in auto and residential real estate loans, as a strong economic rebound from the slump in 2009 spurred more consumer purchases.

Auto loans rose by 24.5% to P117.8 billion while residential real estate loans, which accounted for bulk of banks’ total consumer loans, followed with a 15.8% growth to P188.3 billion.

“Car sales last year reached record highs,” Chamber of Thrift Banks (CTB) President Patrick D. Cheng said via text.

Mr. Cheng, also the president and chief executive of HSBC Savings Bank (Philippines), Inc. also noted the bullishness of the real estate market “given the number of projects introduced” last year.

In a separate text message, CTB Executive Director Suzanne I. Felix said, “consumers’ continued confidence in the economy” helped sustain demand for auto and real estate loans.

The Chamber of Automotive Manufacturers of the Philippines, Inc.

(CAMPI) said a record 168,490 units were sold last year. Most property firms also reported record profits in 2010.

Other consumer loans -- used to buy household appliances or furniture, settle taxes or pay tuition -- jumped by 14.4% to P46.4 billion.

Credit card loans summed up to P120.30 billion, up by 4.2%.

Universal and commercial banks accounted for 60.2% of total consumer loans, and thrift banks, the remaining 39.8%.

Universal and commercial banks’ consumer loans grew by 14.2% to P284.5 billion from P249.2 billion previously.

Those extended by thrift banks increased by 14.8% to P188.1 billion from P163.91 billion.

Central bank data also showed banks’ loan quality improved. The ratio of non-performing consumer loans -- loans that are in default or close to being in default -- to total loans eased to 8.7% last year from 9% in 2009 due to loan growth outpacing the non-performing loan (NPL) rise.

Thrift banks’ 8.3% NPL ratio was better than universal and commercial banks’ 9%.

Meanwhile, the banking industry’s capacity to absorb loan defaults by consumers also improved with the ratio of loan loss reserves to NPL at a healthy 66.9% compard to 62.7% in 2009. -- Antonio Siegfrid O. Alegado



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PhilPaSS transactions rise by 22%



PhilPaSS transactions rise by 22%

THE NUMBER of transactions processed and settled through the central bank’s Philippine Payments and Settlements System (PhilPaSS) rose by 22.2% last year after the Bangko Sentral ng Pilipinas (BSP) opened the facility to banks handling the remittances of overseas Filipino workers (OFWs).

The BSP, in its annual report released on Monday, said the number of transactions rose to 916,304 last year from 749,591 in 2009. The value of these transactions climbed as well, to P206.6 trillion from P188.5 trillion.

“The significant increase in the number and volume of transactions stemmed mainly from OFW remittance transactions processed and settled through the PhilPaSS REMIT system,” the central bank explained.

“As of end- Dec. 2010, the total number of OFW remittance transactions was recorded at 112,600 with a corresponding value of P4 billion.”

The PhilPaSS REMIT System, which was launched in October last year, provides safer means of sending remittances to beneficiaries. It does away with couriers that banks tap to transfer remittances to other banks, where beneficiaries maintain accounts. The system also charges lower fees, and is equipped with a feedback mechanism that allows OFWs to trace the status of their remittances.

Remittances rose by 8.2% to a record $18.8 billion last year, accounting for nearly 10% of the country’s gross domestic product (GDP).
“However, average daily transactions for OFW remittances processed and settled through the PhilPaSS REMIT system reached only 667, lower than the target of 6,500 average daily transactions, due to system enhancement being undertaken by banks,” the central bank said.
“Moreover, contracts with tieup remittance partners constrained participating banks from shifting immediately the processing and settling of their transactions through PhilPaSS,” it added.

PhilPaSS is the central bank’s real-time gross settlements system, which faciliates high-value payment transactions between banks through the deposit accounts these banks maintain with BSP. -- ASOA

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SSS now taking baby steps to make funds last forever

SSS now taking baby steps to make funds last forever

Philippine Daily Inquirer
First Posted 04:05:00 04/09/2011

Filed Under: Insurance, Government offices & agencies
Most Read
MANILA, Philippines—The proposed increase in social security contributions is the first step to make pension funds last “forever,” according to Social Security System chief executive Emilio de Quiros Jr.

De Quiros said in a statement that an increase in contribution of 0.6 percentage point to 11 percent of a member’s salary would help the SSS restore fund perpetuity—a status that was last attained in 1980.

Based on the last actuarial valuation done in 2007, SSS funds would only last until 2039. The planned hike would merely extend fund life to 2046, although it would also increase the amount of benefits members receive, he explained.

De Quiros earlier said the proposed increase is needed to address members’ clamor for “more meaningful benefits.”

The last time the contribution rate was increased was in 2007.

Starting 2003, the rate stood at 9.4 percent.

“We are taking small steps towards our goal of having a perpetual fund, or a fund life of at least 75 years,” De Quiros said. “We need to implement reforms, but we don’t want a drastic one-time increase in contribution ... We prefer to do it gradually.”

De Quiros said that from the time the SSS was established in 1957 until September 2010, benefit payments reached P734 billion, exceeding contribution collections of P732 billion.

“Were it not for cumulated investment income of about P350 billion, the fund would have long been depleted,” he said.

The Social Security Commission, the SSS governing board, approved in principle the proposed increase in the contribution rate.

The SSC also agreed to increase the maximum monthly salary credit—the ceiling that serves as basis for contribution payments—to P20,000 from P15,000. Ronnel W. Domingo
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Board to oversee use of $434M in anti-poverty aid


Board to oversee use of $434M in anti-poverty aid

A PERMANENT BOARD has been convened to administer a $434-million grant, to be used for poverty-alleviation programs, from the United States’ Millennium Challenge Corporation (MCC).

The Millennium Challenge Account-Philippines (MCAP) board met on Tuesday and elected Budget Secretary Florencio B. Abad as chairman of the board. Finance Secretary Cesar V. Purisima was elected vice-chairman.

The board members include Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr., Social Welfare Secretary Corazon J. Soliman, Public Works Secretary Rogelio L. Singson, Development Bank of the Philippines President Francisco F. Del Rosario, Jr., Executive Secretary Paquito N. Ochoa, Jr., and an MCAP managing director who has yet to be named.

Non-government organizations are also represented through Veronica F. Villavicencio of Pilipina, Inc., Cesar D. Aculan of the Samar Partnership for Peace and Development and Cesar B. Yu Jr. of the Zuellig Family Foundation.

The MCC and the Department of Finance (DoF) signed the Philippine Compact Program last September which released the $434-million grant to fund three key government projects.

The Secondary National Roads Development Project, which will get $214.44 million, aims to rehabilitate the 220-kilometer Samar Road which passes through 15 municipalities in the Western and Eastern Samar provinces. The project seeks to reduce transportation costs and improve access to markets and social services for an estimated 290,000 Filipinos.

The Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, meanwhile, was allocated $120 million. The project seeks to spur community development by funding crucial local government projects and improving social services for the poor. It is expected to benefit over five million Filipinos over the next 20 years.

The Revenue Administration Reform Project, lastly, will get $54.3 million to help strengthen tax collections and detect corruption in revenue agencies. The grant will fund the Bureau of Internal Revenue’s initiative to redesign its polices and implement the electronic Tax Information System.

It will also support the Revenue Integrity Protection Service by funding the training of personnel and the acquisition of case management software.

Another $8.6 million, meanwhile, will be used for the monitoring and evaluation of MCAP programs, while $36.91 million was set aside for program administration and oversight.

The Compact Program was preceded by a Threshold Program in 2006 which gave the Philippines a $21-million grant. It aimed to assist the country in meeting the selection criteria for the larger Compact Program. -- D. C. J. Jiao


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Hunger keeps rising, poverty also up -- SWS



Hunger keeps rising, poverty also up -- SWS

MORE FILIPINOS are going hungry and consider themselves poor, the Social Weather Stations (SWS) said in a new report, the details of which highlight the challenges facing the Aquino administration.

A March 4-7 poll, the results of which were made exclusive to BusinessWorld, had 20.5% of respondents -- or an estimated 4.1 million families -- claiming to have gone hungry at least once in the past three months.

This was up from the 18.1% (an estimated 3.4 million families) recorded in November 2010 when the rate again began climbing from that year’s 15.9% low.
The result is also almost seven points above the 12-year average of 13.8%, the SWS said.

Last month’s poll, moreover, found that 51% -- an estimated 10.4 million families -- consider themselves mahirap or poor, two points up from November’s 49%. Also, 40% (8.1 million families), consider themselves food-poor, higher than the 36% notched in the previous survey.

A senior government official said external shocks likely contributed and added that the Aquino administration remained committed to its promise of alleviating poverty.
The rise in overall hunger, the SWS said, resulted from increases for both moderate and severe hunger. The area comprising Balance Luzon was the hardest hit, with hunger rates hitting record highs.

Nationwide, moderate hunger -- experiencing it only once or a few times -- rose to 15.7% (an estimated 3.2 million families) from 15% (2.8 million families) in November. Severe hunger -- experiencing it often or always -- increased to 4.7% (950,000 families) from 3.1% (588,000 families).

By area, overall hunger hit a record 25% (2.2 million families) in Balance Luzon from 18.3% (1.5 million families). The new rate topped the previous high of 22.3% in September 2007, and offset declines in Mindanao (16.7% from 18%), Metro Manila (20.7% from 21.7%) and the Visayas (14.7% from 15.3%).

Broken down, moderate hunger hit a record 18.7% in Balance Luzon, overtaking record of 18.1% in March 2010. This also cancelled out improvements in the Visayas (9.7% from 12.7%), Metro Manila (16.7% from 17.7%) and Mindanao (14.7% from 16%).

"The new moderate hunger rates are still higher than their 12-year averages for all areas, except in the Visayas where the latest ... is lower than the 12-year average of 10.2%," the SWS said.

Severe hunger also hit a record high of 6.3% in Balance Luzon, surpassing the 6% hit in December 2008. The rate stayed at 4% in Metro Manila and at 2% in Mindanao but rose to 5% from 2.7% in the Visayas.

The latest rates were also higher than the 12-year averages for all areas except for Mindanao where it is some two points lower.

Self-rated poverty, meanwhile, rose in all areas except Metro Manila, where it fell 10 points to 34% from 44%. This, however, was overwhelmed by an eight-point increase in the Visayas (61% from 53%), a five-point gain in Mindanao (49% from 44%), and by a three-point rise in Balance Luzon (54% from 51%).

It rose by four points to 59% in rural areas and by three points to 45% in urban areas.

Self-rated food poverty fell by four points to 24% in Metro Manila but increased elsewhere: 12 points to 51% in the Visayas, four points to 42% in Balance Luzon and by four points to 38% in Mindanao.

The self-rated poverty threshold -- the monthly budget that poor households need in order not to consider themselves poor in general -- remained sluggish despite inflation.

Compared to the previous quarter, the median poverty threshold for poor households stayed at P15,000 in Metro Manila, P9,000 in Balance Luzon and P8,000 in the Visayas; it rose to P7,000 from P5,000 in Mindanao. These amounts had been surpassed in the past in those areas, the SWS said.

As of March 2011, the median food-poverty threshold for poor households in Metro Manila fell back to P8,000 after a record-high P9,000 in the previous quarter. It went up to P5,000 from P4,000 in Balance Luzon, stayed at P4,000 in the Visayas, and rose to P3,850 from P3,000 in Mindanao. These amounts had also been surpassed in the past, the SWS said.

As a measurement of belt-tightening, the SWS said Metro Manila’s median poverty threshold of P15,000 in Metro Manila was barely above the P10,000 in 2000 even though the Consumer Price Index (CPI) had risen by over 60%. The P15,000, it said, is equivalent to just P8,886 in base year 2000 purchasing power and is a throwback to living standards of over fifteen years ago.

At the March 2011 cost of living, the 2010 median of P10,000 is equivalent to P16,880, and deducting the current P15,000 means households cut living standards by P1,880.

In terms of food poverty, food-poor Metro Manila households tightened belts by P42.
Sought for comment, Social Welfare Undersecretary Celia C. Yangco said: "During the last quarter, we’ve experienced a lot of shocks ... such as the troubles arising in the Middle East ... we’ve also seen an increase in food prices over the past quarter."

She noted, however, that the government was continuing to undertake "sustainable livelihood" schemes such as conditional cash transfers and the KALAHI-CIDSS community development program.

The SWS polled 1,200 adults nationwide for the latest survey, which used sampling error margins of ±3% for national and ±6% for area percentages. -- J. D. Poblete


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Party-list groups lead efforts to rehabilitate co-op banks


Party-list groups lead efforts to rehabilitate co-op banks

WEDNESDAY, 06 APRIL 2011 19:16     BONG D. FABE / CORRESPONDENT  

CAGAYAN DE ORO CITY—Different cooperative party-list organizations in the Philippines, led by the Coop-Natcco, have risen to the challenge to rehabilitate at least 15 distressed cooperative banks in the country, infusing a total of P2.5 billion into the effort.

Coop-Natcco Rep. Cresente Paez and Rep. Jose Ping-ay have successfully convinced the Bangko Sentral ng Pilipinas (BSP) to implement a rehabilitation program for the cooperative banks under its Prompt Corrective Action (PCA).

“The burning issue is that there are now 10 cooperative banks that are in trouble and are under Prompt Corrective Action by the BSP due to capital deficiency. The government will stand to lose P1.8 billion if these 10 distressed co-op banks will eventually be foreclosed,” Paez said.

Paez later acknowledged that there are actually 15 cooperative banks now under the PCA.

He pointed out that the P2.5-billion rehabilitation fund will come from  the government to help at least 258,000 ordinary people who are bound to lose their P244.2-million equity funds invested in these ailing co-op banks if these will be foreclosed.

To further strengthen the rehabilitation efforts, Paez also filed House Bill (HB) 4054, coauthored by Ping-ay and Rep. Agapito Guanlao of Butil party-list and Rep. Isidro Lico of Ating Koop party list.

HB 4054 seeks to establish a provident endowment and viability-enhancement fund amounting to P2.5 billion for cooperative banks in the country.

During a recent meeting with the cooperative party-list congressmen, BSP Governor Amando Tetangco Jr. expressed willingness to provide rehabilitation program for the ailing co-op banks.

And in another meeting, BSP Deputy Governor Nestor Espenilla told the House Committee on Cooperatives the BSP’s willingness to strengthen coop banks through a rehabilitation framework so that these ailing co-op banks will not just rely solely on the government.

Espenilla also said these banks’ quality of management and governance should be addressed.

Meanwhile, the Land Bank of the Philippines and the Philippine Deposit Insurance Corp. expressed willingness to help rehabilitate the ailing co-op banks by providing equity and technical assistance (i.e., risk management training) based on the self-help mechanism that the co-op banking sector will come up with.



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Wednesday, April 6, 2011

PNB net income up 61%

PNB net income up 61%

PHILIPPINE National Bank (PNB) closed 2010 with a 61% increase in net
income from the previous year as a result of high returns from trading.

PHILIPPINE NATIONAL BANK said its efforts to improve customer service
helped in boosting profits. The bank disclosed yesterday that its net
income rose to P3.54 billion last year, a 61% jump from the P2.2-billion
net income it reported for 2009.


In a disclosure to the Philippine Stock Exchange, the bank said its
profit amounted to P3.54 billion last year, higher than the P2.2-billion
net income it posted in 2009.

PNB's net gains from trading and investment securities amounted to P3.03
billion as of the end of 2010, more than double the P1.4 billion it
recorded the previous year.

The bank's trading assets likewise jumped by 86% last year from that of
the previous year.

The bank's total deposits increased by 6% to P226.44 billion from P215
billion a year ago as it maintained a large volume of low-cost -- or low
interest-paying -- deposits. Its net loans and receivables rose by 10%.

"Net interest margins remained fairly at the same levels at P7.8 billion
as the increase in earning assets compensated for the reduction in
spreads [generated] by the market's liquidity in 2010," the bank said.

The bank said its P3.54 billion net income translated into an 11% return
on equity, which is net income earned as percent of stockholders'
investments and a key measure of performance.

Its capital adequacy ratio (CAR) -- a measure of a bank's financial
strength -- stood at 19.41%, well above the central bank's 10% minimum
requirement and higher than the 18.5% it posted a year ago.

PNB managed to bring down its non-performing loan (NPL) ratio, or the
ratio of soured loans to total loans, to 4.1% last year from 5.6% in 2009.

As of end-2010, the bank's consolidated assets rose by 7% which is
equivalent to P302.13 billion.

Total operating income increased by 9% to P16.58 billion from that of
the previous year, while its operating expenses, including its
provisions for impairment and credit losses inched up by 0.8%.

"Moving forward, [PNB] is now well positioned to grab market share in
the consumer loans business...as it made a lot of progress in improving
customer service across the organization," the bank said in the disclosure.

"PNB declared 'war' against long customer lines. Through technology
solutions, operational process adjustments, and a relentless campaign to
drive a customer-centered sales and service culture, customer waiting
time in the branches was cut significantly," it added.

"The good numbers may mask the significant effort exerted to put the
derailed bank back on track. We still have a huge load from negative
carry on our acquired assets, but are winning the war against
inefficiency. We can now approve car loans in as fast as a couple of
hours," PNB President Eugene S. Acevedo told BusinessWorld in a text
message yesterday.

PNB shares shed P1.20 to close at P59.90 apiece yesterday against its
P61.10 apiece close last Monday. -- Ann Rozainne R. Gregorio

Microfinance loans pegged at P6.5B–BSP



Microfinance loans pegged at P6.5B–BSP

TUESDAY, 05 APRIL 2011 23:29
JUN VALLECERA / REPORTER  


FROM an activity that counted for almost nothing 10 years earlier, microfinance loans have grown through the years and total P6.5 billion as of latest, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

BSP Gov. Amando M. Tetangco Jr. bared this at the microfinance summit held at the central bank complex along Roxas Blvd. where some 300 microfinance policymakers, regulators, microfinance institutions, donors and investors celebrated the triumphs and milestones of the local microfinance industry.

At the summit, Tetangco urged the various stakeholders to commit to greater microfinance activities, pursue still more financial inclusion programs and engage in more networking activities.

Tetangco said the summit was inspired by the consistently high ranking the Philippines obtained at the survey conducted each year by the Economist Intelligence Unit or EIU.

"Philippine microfinance is cited as the best in the world in terms of regulatory framework, and second-best performing in terms of overall business environment. This is an upward ranking compared to the 2009 survey wherein the Philippines landed number three in overall business environment while retaining its number-one position in the regulatory framework category.

"This recognition affirms the good work that all microfinance industry players are doing. It indicates that each stakeholder ably and ardently performs its roles and responsibilities in order to make the Philippine microfinance market what it is today: viable, sustainable, sound, safe and strong," Tetangco said.

The BSP first crafted the rules and regulations governing microfinance in 2000 when it was mandated by the General Banking Law to recognize it as a legitimate banking activity and as one more tool to combat poverty.

Since then, the BSP has issued more than 20 circulars that promote a microfinance-friendly regulatory environment in the country.

From almost nothing as an industry 10 years ago, microfinance institutions now count among its members more than 200 microfinance-oriented banks servicing the micro-loan requirements of some 900,000 small borrowers

These banks collectively extended some P6.5 billion worth of micro loans. These same micro borrowers were able to amass savings totaling P3 billion as of latest, Tetangco said.


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