PHILDEVFINANCE (old news)

Monday, May 2, 2011

GCash Remit delivers cash to remote barrios

Special Feature

By EMMIE V. ABADILLA

April 30, 2011, 1:41am

BALABAC ISLAND, Palawan, Philippines – Mobile money now reaches the remotest places in the Philippines to alleviate poverty in 70 areas where no banks operate, with P2 Billion already distributed in over 600,000 transactions via Globe Telecom’s domestic cash pick-up service, GCash Remit.

Just this month, over a 3-day payout, the Department of Social Welfare and Development (DSWD) and state-owned Land Bank of the Philippines (LBP)’s Conditional Cash Transfer (CCT) program carried out over 5,000 transactions to give P9 million aid to thousands of impoverished beneficiaries in Balabac Island, Palawan, at the Southernmost tip of the archipelago.

Late last year, the CCT program piloted a payout for 3,000 beneficiaries in Balabac over a one week period and for 7,000 beneficiaries Taytay, Palawan as well as in Burdeos, Quezon.

The CCT program, also known as Pantawid Pamilyang Pilipino Program (4Ps), now covers Palawan, Quezon, Sorsogon, Aklan, Iloilo, Masbate, Lanao del Norte, Albay, Aurora, Cebu, Sarangani, Sulu, Tawi-Tawi, Maguindanao, Basilan and Shariff Kabunsuan.

It is a vital component of the state’s poverty alleviation agenda and helps the country’s poorest families by providing cash assistance for food, education and health care, provided the beneficiaries comply with certain conditions like attending school, regular health check-ups and vaccinations.

Before, the poor waste so much time and money just to claim cash grants from payment centers in provincial capitals and major cities.

Sometimes, what they spend for transport is bigger than the cash grants they receive.

Martasia Aminola, member of the Molbog indigenous tribe of Balabac, had to spend P1,500 to reach the nearest Land Bank branch in Brooke's Point, Palawan to claim P1,100 monthly assistance for two children in elementary school and a toddler aged two.

She has to travel about 70 nautical miles from her home – walk down a mountain for an hour, take a P200 hour-long motorcycle ride to reach the poblacion. From the pier, she has to take a 4 hour P380 boat trip to Rio Tuba, take a P25 tricycle ride then a one-hour bus ride to reach Brooke's Point. She has to leave home at dawn to catch the only boat trip that leaves Rio Tuba at 6 a.m. If she fails to return to the same port by noon, she has to spend the night there and wait for the next scheduled boat ride to Balabac.

Ironically, Aminola still lives in a barangay closest to the poblacion. Beneficiaries from six other barangays live in the satellite islands of Balabac, of which Mangsee is the farthest – four hours away from the poblacion by boat though only 15 minutes sailing from Sabah, Malaysia.

For beneficiaries residing in far-flung islands, claiming their CCT grants means even higher transportation costs and longer travel.

Mothers with children who have no minders at home are forced to bring their kids with them.

“Using GCash Remit, families in remote villages don’t have to shell out money to travel just to get their monthly CCT cash grants. We bring the money closer to them through our wide network of outlets in a safe and secure manner,” noted Globe Telecom President and CEO Ernest Cu.

For their part, state agencies, do not have to worry about security anymore as they transport millions of pesos in cash in the remote, poverty-stricken areas. No bank operates in Balabac Island. Only 3 Land Bank branches operate in the entire Palawan province, all of them in town centers.

In the 5 island provinces of the MIMAROPA region (Occidental Mindoro, Oriental Mindoro, Marinduque, Romblon and Palawan) LBP has only 9 branches of which only 2 are in 4Ps-covered areas. Hence, 4Ps beneficiaries in the region’s 30 other towns have to spend on transportation.

In the past, Land Bank tellers risked their lives travelling long hours bringing millions of pesos. “We pay out over P1 million per day,” one LBP cashier at the Balabac payout acknowledged. “We have to carry the cash by boat. It’s scary.”

"Our tellers have to literally hug the money bags close to them even in their sleep," explained Ma. Belma Torla, LBP Assistant Vice President, noting that the offsite cash distribution lasted for more than one day to accommodate thousands of beneficiaries in a single municipality. Police and military personnel escort the tellers and maintain order during payout.

Now, CCT will also be more protected from political influences as security, whether through manpower or use of "more secured vehicles," will no longer be needed. Secretary Dinky Soliman was relieved that DSWD can finally implement the program with "less room for outsider influence."

“This is such a big help. We don’t know what we will do without it. We use the money for the education of our kids,” according to Mussah Ishmael, 41, the leader of a 32-member CCT beneficiary group from neighboring Bangcalaan.

She fled the fighting in Jolo and settled in the island with her husband, who is also from Jolo. She finished only Grade 3 and her husband is illiterate.

To feed their 8 children, he ekes out a living making coal, selling 3 sacks per day at P50 per sack. She plants agar and kamote and makes P3,000 every two months.

On the average, they spend P85 per day for rice alone. Her two sons fish for their food. But they also spend for 4 liters of gas for their boat per round trip. The children often get sick from drinking water from the deep well. There’s no doctor in the island. They have to go to the clinic in the poblacion, two hours boat ride away.

A handful of the Ishmael children are in school, two didn’t finish their studies and a single daughter is working as a domestic help. So far, the family has received 3 grants totalling P14,100. The bulk of money goes to food and the children’s school expenses.

For Globe Telecom’s GCash Remit sub-dealer Johnny J. Diaz, 57, “It’s not just a business but a public service.

If you help people, you develop loyalty. I agreed to do the GCash Remit because no one else will do it.”

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Peso appreciates on second day

Peso appreciates on second day

THE VALUE of the peso appreciated for the second straight trading day on Friday on the back of improving investor confidence, analysts said.
The currency gained 12.5 centavos to settle at P42.80 per dollar from its P42.925-per-dollar close on Thursday.

The peso firmed up by 29 centavos on Thursday against a closing rate of P43.215 per dollar the previous day.

"The peso gained against the dollar for the second straight day on the back of the positive news on the country’s fiscal performance and [Finance] Secretary Cesar [V.] Purisima’s statement on the possible rating upgrade of the country’s debt rating," a trader said in a phone interview.

The government incurred an P18.131-billion shortfall in March, bringing the deficit for the first quarter to P26.197 billion, well below the P111.986 billion ceiling. It was also lower than the P134.179 billion shortfall booked in the same period last year.

After meeting with representatives of Moody’s Investors Service in Washington, D. C. and Fitch Ratings and Standard & Poor’s Ratings Services in New York City two weeks ago, Mr. Purisima said, "I believe we have a very good case. I am confident that they will give us the benefit of the doubt."

Such news of a ratings upgrade, the trader noted, has a positive effect on investors who may be enticed to invest in Philippine assets.

Fitch has a BB credit rating -- two notches below investment grade -- on the Philippines’ long-term foreign currency debt; S&P last November raised the credit rating a notch to BB with a stable outlook; while Moody’s rating is Ba3, three notches below investment grade, but it raised its outlook to positive from stable in January.

In a separate phone interview, another trader said the peso’s value was buoyed by remittance.

Currency dealers expect the peso to trade within the band of P42.50 to P43 per dollar next week.

The value of dollars traded on Friday reached $1.089 billion, lower than $1.346 billion traded the previous day. -- A. R. R. Gregorio

New bank rules seen to avoid scandals

New bank rules seen to avoid scandals

A NEW monetary regulation has been issued to protect the banking system from scandals that may arise during transactions involving the transfer of voting shares.
Under Circular 718 issued on April 14, the Monetary Board -- the policy-making body of the Bangko Sentral ng Pilipinas (BSP) -- introduced changes to a set of rules under the Manual of Regulations for Banks (MORB) on limits of stocks in a single bank and transactions relating to voting shares, among others.

"The amendments were agreed upon by the Monetary Board in order to prevent cases like the Legacy Group’s which basically involved transactions of voting shares of rural banks," BSP Deputy Governor Juan C. de Zuñiga told BusinessWorld in an interview last Thursday.

He was referring to the failed financial group of businessman Celso G. de los Angeles, Jr. who was alleged to have diverted client funds for personal use.

Specifically, the new rules set broader coverage on transfer of voting shares, Mr. de Zuñiga said.

"Transfer of voting shares only involve current shareholders owning voting rights of banks, while other transactions like subscription, purchase, transfer, conversion of preferred shares or debt instruments into voting stocks are not covered," he explained.

Transaction of voting shares that exceed "ceilings" as prescribed by laws will be deemed "null and void," according to the circular.

Current ceilings are:

• 40% -- voting shares of a stock of a Filipino individual or a Philippine non-bank corporation in a domestic bank;

• 40% -- voting shares of foreign individual or a foreign non-bank corporation in a domestic universal, commercial, thrift and rural bank;

• 40% -- combined ownership of the voting shares of stock of foreign individuals and/or foreign non-bank corporations in a domestic universal and commercial bank;

• 60% -- combined ownership of the voting shares of stock of foreign individuals and/or foreign non-bank corporations in a domestic thrift bank;

• 40% -- combined ownership of the voting shares of stock in a domestic bank of an individual and corporation/s which is/are wholly-owned or a majority of the voting shares of stock of which is owned by such individual;

• 60% -- voting shares of stock of a qualified foreign bank or qualified Philippine corporation in a domestic bank; and,

• 60% -- combined ownership of the voting shares of stock of qualified foreign banks under the Foreign Banks Liberalization Act in a domestic bank.

Meanwhile, the circular stated that transactions resulting in "ownership of 20% of voting shares of an individual" or "effect a change in the majority ownership or control of the voting shares of stock of the bank from one group of persons to another group" is subject to Monetary Board approval.

Further, such transactions shall be reported by a bank’s corporate secretary to the Monetary Board "within 60 calendar days from [the] date of transaction or 30 calendar days from receipt by [the] corporate secretary of request for registration of the transactions," the circular said.

Failure to do so, it noted, will invalidate the transaction while those involved in the deal will be subjected to "appropriate legal actions."

"It is part of the duties of the corporate secretary to report such transaction within our prescribed time. It is necessary for the Monetary Board to know these transactions in order to supervise banks well," Mr. de Zuñiga said.

"Transactions like these involving Legacy were not dutifully reported."

The BSP has filed numerous cases such as falsification of public documents and false statements against officials, employees and agents of four shuttered rural banks under the Legacy Group

The shuttered banks are Rural Bank of Parañaque, Rural Bank of Darbci in South Cotabato, Rural Bank of San Jose in Batangas, and Bank of East Asia. --
Antonio Siegfrid O. Alegado

Sunday, May 1, 2011

DOE mulls tapping World Bank for renewable energy sector

DOE mulls tapping World Bank for renewable energy sector
12/28/2010 | 02:36 PM

As the Aquino administration tries to unravel the best way of putting in place the portfolio standards and feed-in tariff rate on renewable energy, the Department of Energy (DOE) is thinking of tapping the World Bank (WB) to attract more investors into the sector.

"The idea is to really try to find the best possible way to encourage the investment into renewable energy that's needed without overdoing it by punishing the consumers," Energy Secretary Jose Rene Almendras told reporters in an interview.

“There's a good economic balance that's being looked for," he said.

"Fortunately for us, the Renewable Coalition has invited a very powerful resource person from the World Bank who has had experience on both implementations," Almendras said.

A World Bank official, who cannot be named because he is not authorized to speak on the matter, told GMANews.TV the multi-lateral lender “has several renewable energy experts."

Almendras wants to invite the WB expert “to sit with the National Renewable Energy Board (NREB) and the Technical Working Group."

The experts are not necessarily in the Philippines but in various places in the region and in the US, and can be informed once the bank has received an official invitation, according to the WB official.

A standards portfolio is a market-based policy that requires suppliers to make a portion of their electric supply in renewable energy form.

The feed-in tariff, on the other hand, is a policy that guarantees payments to sources of renewable energy for every kilowatt-hour produced.

Experts believe only with such policies in place can the renewable energy sector succeed.

Almendras said the delays in the implementation of the feed-in tariff were a result of NREB’s reconstitution.

"The NREB reconstitution took a while. We went through a real consultation process with the groups that were supposed to be represented. The objective was to find the most appropriate representation for each of the groups that have a stake in the NREB," he said.

The board also asked the Energy Regulatory Commission to extend until March 31, 2011 the final numbers for the feed-in tariff on renewable energy. The original deadline was Aug. 4, 2010.

"We need to acknowledge that there are delays on that side. We will push as much as we can. We will try our very best to meet those deadlines as best as we can. Those targets are very reasonable," Almendras said.

The Energy department has so far approved P87.735 billion of renewable energy projects since the 2008 Renewable Energy Law was passed. — VS/KBK, GMANews.TV

Monday, April 25, 2011

BSP adopts same collection practices for all consumer loans

BSP adopts same collection practices for all consumer loans

By LEE C. CHIPONGIAN

April 25, 2011, 10:04pm

MANILA, Philippines – Unknown to a lot of people, the central bank now uses one regulation governing the credit operations of banks and other Bangko Sentral ng Pilipinas (BSP)-supervised financial institutions to better protect all financial consumers, not just credit card holders who, understandably, have front row seats in the complaints department.

“We’ve made it (policy on credit card collection) applicable to all types of loans because it works and the most effective we have,” says BSP Deputy Governor Nestor A. Espenilla Jr. This allowed the BSP to implement a single credit collection standards on all types of consumer and household loans.

A report prepared by the Supervision and Examination Sector (SES) that Espenilla heads, and the Financial Consumer Affairs Group (FCAG) said that while there are existing regulations that promote the protection of financial consumers, the central bank continues to receive complaints from the public.

Credit card complaints still dominate the list, followed by complaints on banks’ deposit operations particularly on ATM-related transactions.

Data from FCAG show that since it started operations in October 2006, the most frequently complained about aspects of credit card operations are: unfair collection practices, excessive charges, unauthorized/disputed charges, issuance of pre-approved credit cards and fraudulent use due to lost or stolen credit cards.

The total number of credit-card related complaints received by FCAG is now 1,575, just 0.02 percent of the total number of credit cards in use, which as of the end of 2010, is 6.7 million. It’s fairly small compared to the number of total credit cards but it is enough to highlight that credit card operators have been perceived by the public as abusive, for example in collection practices, in the charging of interests and fees and issuance of pre-approved cards. “The situation underscores the need to further enhance the existing regulations in order to effectively address the growing sentiment of the public against credit card-issuing institutions,” reports the SES and FCAG.

Still, despite its horrible reputation as a credit enabler, the banking industry’s credit card loans continue to expand last year, with new borrowers thinking banks are easing credit standards to encourage more loan applicants.

At the end of 2010 credit card receivables were up 4.2 percent year-on-year to P120.3 billion, exclusive of credit card subsidiaries. In all, total consumer loans residential property loans, automotive and credit card loans – grew 14.4 percent to P472.6 billion while ‘other’ consumer loans such as personal and household loans also increased by 14.4 percent to P46.4 billion in 2010.

One collection policy

Espenilla says it has been decided that the BSP will apply one regulation, including those on confidentiality of information and unfair collection practices for other types of loans, such as personal loans.

The existing regulations governing credit card operations of credit card-issuing institutions already include the following:

*Requirement that these institutions keep strictly confidential the data on the cardholder or consumer, except under certain circumstances, which include disclosure to collection agencies, counsels and other agents of the bank or card company to enforce its rights against the cardholder; and

*Provision allowing credit card-issuing institutions to resort to all reasonable and legally permissible means to collect amounts due them under the credit card agreement, but requires that in the exercise of their rights and performance of duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous or untoward acts.

These regulations are now applicable to other lending operations of banks and other BSP-supervised financial institutions.

Notify first, collect later

The BSP continues to review existing regulations on the credit operations of banks, quasi banks and their subsidiaries, to further strengthen policies for the protection of the financial consumer.

"The BSP is deeply involved in various projects and activities to support the economic and social development objectives of the government through its advocacies, one of which is on the promotion of consumer protection," says the SES.

The amended loan collection guidelines are considered more ‘humane’. For example, borrowers will now be given time and proper notices of when his/her accounts, which are defaulting, are turned over to third-party collectors.

Not only the name of the collection agency, but borrowers will be given the name of the agent assigned to his/her account once the bank or the card-issuing firm or the lending bank has endorsed an account to a third-party collector, according to BSP new rules and regulations on loan collection practices approved last December 15 under Circular No. 702, which includes new and stricter guidelines for collection practices.

Based on Section 4 of this circular, banks and quasi-banks and their subsidiaries/affiliate credit card companies would have to inform cardholders and borrowers in writing of the endorsement of the collection of their account to a collection agency at least seven days prior to the actual endorsement.

In the original draft circular, the days required was 15 days however the Monetary Board reduced the number of days to just seven days upon the recommendation of the Credit Card Association of the Philippines (CCAP) when consulted on the draft circular.

CCAP also asked the BSP that banks should be given sufficient time to change all communication materials – four months at least – from the date of issuance of the circular, which meant banks should start issuing new loan brochures and application forms printed in plain language and in bold black letters against a white background using the minimum ‘12’ Arial font and size by this month.

The association, however, said they ‘generally agree’ that the adjustments in fonts and size which will make for better disclosure of the summary of the applicable fees, penalties and interest rates that may be charged for the use of credit cards or loans will benefit the consumer.

In the memo explaining the new circular, SES Deputy Director Belinda G. Caraan says collection harassment continue to be a ‘major issue’ as far as credit card-related complaints are concerned, especially when cardholders have no idea that their accounts are already forwarded to collection agencies.

“(The) card-issuing institution oftentimes discloses only the name of the firm to which the account will be endorsed, leaving out the name of the agent assigned to the account. The cardholder then receives calls from agents who do not give their true identity, leaving the cardholder without sufficient information to enable them to go after abusive collection agents,” notes Caraan.

In including provisions in Section 4, Caraan says the BSP will further enhance consumer protection for the following reasons:

*The cardholder will have time to consider his/her options, including the possibility of expediting the settlement of the account prior to its endorsement to a collection agent so that he/she will save on costs including the commissions and fees that the collection agent may charge;

*The cardholder will be informed with whom arrangements for the payment of his/her account may be discussed. This eliminates the chances of confusing the cardholder as to the terms of the arrangement and will not put him/her at a disadvantaged of not knowing the true identity of the collection agent when he needs to be further clarified of these terms;

*It established accountability on the part of the collection agency and its agent/s and will encourage them to properly and responsibly handle the collection process knowing fully well that the cardholder is aware of the agency’s/agent’s true identity; and

*Alerts the cardholder on agents using aliases or pseudonyms and will eliminate the practice of unscrupulous agents who resort to collection practices considered under existing regulations as unfair, including unauthorized disclosure of the details of the credit card account to third parties.

Continued monitoring, but more vigilance required BSP has reminded the public again and again that there are rules and regulations that prohibit credit card issuers and their collection agents from engaging in the following instances of unfair collection practices:

*The use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;

*The use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;

*Disclosure of the names of credit cardholders who allegedly refuse to pay debts;

*Threats to take any action that cannot legally be taken;

*Communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;

*Any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder;

*And making contact at unreasonable and/or inconvenient times or hours (before 6am or after 10pm for past-due accounts).

To further enhance the protection of financial consumers, the BSP has prohibited the issuance of pre-approved credit cards by banks and their subsidiary and/or affiliate credit card companies.

Bank Marketing Association of the Philippines President, Allan Tumbaga, says that in adapting one credit policy, especially on collection practices, it is important to really look at the essence of credit collection.

“It should be humane and not unreasonable. It is like making sure that the relationship between banks and customers have standards,” he says. “A personal loan is like a credit card but there’s a credit card rule already so that can apply. We always advise the BSP that what’s important is making sure that loan collection practices are not detrimental to the character of the person/borrower.”

Tumbaga, also Vice President for Marketing and Communications Group for East West Bank, insists banks are always willing to open talks with clients and borrowers, especially defaulting ones “We want to upgrade the banking code and we want transparency in communicating with the customers and given the transparency we must communicate clearly.”

He adds, “It’s really how we deal as banks and customers we don’t need legislations if we can communicate very clearly. (Credit and the giving of credit) is the lookout of the issuer or lending banks, and at the end of the day it’s their risk and there are no risk-less business.”

Consumer protection, and why pre-approved loans are disallowed

The prohibition on the issuance of pre-approved credit is just the latest of the SES amendments on credit card rules. The rationale why the BSP disapproved issuance of pre-approved credit was that it was not consistent with the general guidelines on the grant of loans and other credit accommodations under the BSP's Manual of Regulations for Banks (MORB).

Based on the MORB, before granting loans and other credit accommodations, a bank must ascertain that the borrower is financially capable of fulfuling his/her commitments to the bank. The requirements for the granting of loans include latest income tax return or financial statements submitted to the Bureau of Internal Revenue.

The SES however noted that since credit card issuing banks and firms determine the paying capacity of a credit card applicant, the regulations may have created the impression that it is alright to issue pre-approved credit cards as long as the credit card-issuing institution has in place the system to manage risk exposures.

BSP to expand P5-B rural bank consolidation program

BSP to expand P5-B rural bank consolidation program

By Lawrence Agcaoili, The Philippine Star
Posted at 04/24/2011 7:09 AM
Updated as of 04/24/2011 2:36 PM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is looking at the possibility of expanding a P5-billion program that encourages mergers and consolidation currently limited to rural banks to cover other “small” banks.

BSP Deputy Governor Nestor Espenilla Jr. said in an interview with reporters that monetary authorities are eyeing the expansion of the coverage of the Strengthening Program for Rural Banks (SPRB) that was launched August last year.

“There are ongoing discussions in that area. There are talks to cover or expand SPRB to other small banks,” Espenilla stressed.

He did not elaborate on the planned expansion saying the BSP is still looking at how to improve the SPRB.

“This a great idea to change the financial market. We strive for banks that can adequately give quality credit and service,” he added.

The BSP and state-run Philippine Deposit Insurance Corp. (PDIC) launched the SPRB last Aug. 4. It involves a P5-billion financial assistance as well as grant of regulatory relief by the PDIC and BSP over a period of two years or until 2012 and intends to encourage mergers and consolidations of rural banks to further strengthen the rural banking system.

Rural banks qualified to join the program are those whose risk based capital adequacy ratio (CAR) fall below the BSP required 10 percent and those that are merging or consolidating with an eligible STPIs.

Third party investors that are qualified to join the SPRB include those that are not under the central bank’s prompt corrective action (PCA) program and those that are not engaged in unsafe and unsound banking practices. Furthermore, the STPIs should have a CAMELS (capital adequacy, asset quality, management quality, earnings, liquidity, sensitivity to market rating) of at least “3.”

The P5-billion financial assistance covers the equity component in the form of preferred shares equivalent up to 50 percent of additional capital required to bring the CAR to the eligible level of 10 percent and should have a dividend rate equal to five-year fixed rate Treasury notes.

The shares should also be non-voting, cumulative, and convertible to common shares and should be redeemable starting the fifth year but not later than 10th year from the issuance of the preferred shares.

The direct loan component of the financial assistance covers the principal amount equal to such amount that would allow the merged or consolidated rural bank to earn a net interest spread over loan tenor and involved an effective interest rate of governmnent securities purchased using loan proceeds less three percent.

On top of the financial package, the BSP agreed to extend regulatory relief to those who would participate in the program including the waiver of the monetary penalties imposed of eligible rural banks for violations of existing laws and BSP rules and regulations as well as the condonation of liquidated damages on past due rediscounting or emergency loans as of the end of the month immediately preceding the data of request for loan restructuring.

Other sweeteners include the restructuring of past due rediscounting or emergency loans of the eligible rural banks with the BSP subject to the compliance on the guidelines of amount to be restructured, interest rate, terms of repayments, collateralization, default clause, and documentary requirement.

Other incentives include preferred shares for staggered redemption as well as the rediscounting ceiling of at least 150 percent of adjusted capital accounts of the merged rural bank for a period of one year.

The BSP and PDIC also signed an agreement to harmonize their procedures to expedite the evaluation process for mergers and acquisitions of banks to further strengthen the country’s financial system.

Latest data showed that the number of banks retreated by 27 to 758 last year from 785 in 2009 due to mergers as well as the closure of some banks. The number of universal and commercial banks was steady at 38 followed by thrift banks with 73 while the number of rural banks fell to 647 from 674.

The data showed that the operating network including branches of the banking system inched up by 2.9 percent to 8,869 last year from 8,620 in 2009 reflecting mainly the increase in commercial and rural banks’ branches or agencies.

Thursday, April 21, 2011

BSP may expand rural bank support program

BSP may expand rural bank support program
04/20/2011 | 05:00 PM

Rural banks aren’t processing more credit than what the Bangko Sentral ng Pilipinas would like them to, forcing the regulator to rethink its current program that was supposed to encourage mergers and acquisition in this subsector of the industry.

The Special Program for Rural Banks or SPRB was designed to encourage financial institutions in the countryside to fuse with or acquire each other with a view to making them stronger.

It was supposed to create larger and more competitive rural lenders on the premise that larger banks have more capital to lend more BSP Deputy Gov. Nestor Espenilla told reporters on Wednesday.

“We’re actually looking at expanding the program to cover possibly other entities. But it’s still too early to say," Espenilla said.

The original concept of the SPRB was to give rural banks in the process of merging preferential treatment, including the condonation of fees or fines for violations of BSP rules and higher rediscounting ceilings

The BSP and the Philippine Deposit Insurance Corp. contributed P2.5 billion each as seed money for the program in which the government, represented by state-owned Land Bank of the Philippines, was to become part owner — for a limited period — of banks undergoing ownership transformation.

The program authorizes LandBank to subscribe to the preferred shares of merging entities to safeguard government money until rural bank has grown larger.

Espenilla said expanding the SPRB program is a “great idea to cleanse the financial system [and] to expand the availability of credit."

“Weak banks are not in a good position to provide credit, and for credit to happen a basic precondition is that we must have financial institutions that have the ability to extend credit," the deputy governor explained.

Credit thrives when industry members do not have to worry over liquidity levels or solvency issues or need only to lend to themselves in order to survive, he said.

“In fact, they might only be lending to themselves which is what we are trying to eliminate. We have many kinds of small financial institutions and we’re trying to see if we can promote further consolidation resulting to stronger small entities," Espenilla added.

A few bank executives and another regulator acknowledged the program has languished from a lack of interest, especially from rural banks whose offers fear that enlisting in the program would send the message that their banks are in some form of financial difficulties.

Sources said rural banks were interested in the program but fear the unintended consequence of creating trouble for themselves when word goes out that some of them were seeking some form of assistance from the regulators. — VS, GMA News

Wednesday, April 20, 2011

Microfinance players to get their own credit info bureau

Microfinance players to get their own credit info bureau

MICROFINANCE institutions will begin using an online credit information bureau in a bid to prevent over-indebtedness due to multiple borrowings among their clients -- a practice that gave rise to a repayment crisis in India.

The association of large banks, the Bankers Association of the Philippines (BAP), will develop the online facility. Microfinance institutions will run it.

“We are slated to launch an online credit bureau independently run by microfinance institutions in June to July [this year] to avoid the risk of multiple borrowings by bad creditors,” BAP credit bureau managing director Leonilo G. Coronel told BusinessWorld at the sidelines of the Microfinance Stakeholders Summit at the Bangko Sentral ng Pilipinas (BSP) yesterday.

“Microfinance institutions will voluntarily provide credit information about their clients. They will provide the inputs but they will also get the output,” he added.

Microfinance involves the extension of credit to poor borrowers who are normally turned away by the banks.

The loans are often used to jumpstart enterprises -- mostly buying and selling on a micro scale -- and is regarded as a poverty alleviation tool.

Interest rates are high, ranging from 24% to 36% per annum, but this is because microfinance is labor intensive on the part of lenders. Still, microfinance, at least in the Philippines, is enjoying high repayment rates.

The multiplity of lenders and the lack of a credit information bureau, however, has allowed borrowers to tap different microfinance institutions at the same time, giving rise to the risk they might take on too much debt and default on their borrowings.

This was what happened in India, particularly in the Andhra Pradesh state. Borrowers, mostly women, did not use the loans to start businesses that would have provided cash flows. They instead used them to settle household expenses. Burdened with debts, they went from one microfinance provider to another to borrow in order to settle their earlier debts.

Multiple borrowings have been noted in the Philippines.

“Multiple borrowings by clients, which have increased in the past years, pose a risk not only to local players but to the borrowers themselves,” said Elisabeth Rhyne, managing director of US-based ACCION International’s Center for Financial Inclusion, at the sidelines of the summit yesterday.

She also gave a talk on “How to Avoid an Indian Type Microfinance Crisis in the Philippines” yesterday.

“Credit bureaus are very much needed in a multiple lender environment to avoid over-indebtedness of their (microfinance institutions) clients,” she added.

A credit information bureau mandated by Republic Act (RA) 9510 or the Credit Information System Act, which was passed into law three years ago, has failed to take off the ground.

“The problem here is information asymmetry, as lenders do not know whether the borrowers have multiple loans. Information on these borrowers’ credit background is important,” Mr. Coronel said.

Ms. Rhyne, in her talk, said the absence of a credit bureau, which permitted multiple borrowings, was the major cause why India’s microfinance sector is now in a slump.

Right after reports of suicides among borrowers who could not pay their debts, the Andhra Pradesh state imposed interest rate caps last year. Lending and collections by micro-lenders have grounded to a near halt there.

Ms. Rhyne, however, singled out the Philippines’ sensible microfinance regulatory environment, active industry associations, product diversity and the cooperation among stakeholders as “assets.”

While Malacañang takes its time appointing the president of the Credit Information Corp. -- the body that RA 9510 seeks to establish -- industry players are running their own credit bureaus.

The BAP has its own, which the Rural Bankers Association of the Philippines, the association of rural banks, is also using.

Mr. Coronel said, “It doesn’t matter who runs the credit bureau as long as it serves its purpose”.

“The lack a credit bureau or some sort of information sharing, is like journeying in the sea without a lighthouse,” he added. -- A. S. O. Alegado

Sunday, April 17, 2011

Plantersbank gets top credit rating

Plantersbank gets top credit rating
By Zinnia B. Dela Peña (The Philippine Star)
Updated February 18, 2011 12:00 AM

MANILA, Philippines - Planters Development Bank, the country’s largest private development bank, has obtained an issuer rating of PRS A plus from the Philippine Rating Services Corp. (PhilRatings).

An issuer rating of PRS A means that the obligor has an above average capacity to meet its financial commitments relative to that of other Philippine corporates. The company, however, is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated corporates. A plus sign is added to further qualify the rating.

An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within a time horizon of one year. The focus is on financial strength and stability under normal and stressed conditions to be able to meet existing and prospective financial obligations.

Plantersbank’s key strength is in the small and medium enterprise (SME) market, where the bank has a very strong franchise. As of end-2010, SME loans accounted for approximately 62 percent of the bank’s portfolio.

The issuer rating assigned to Plantersbank reflects the bank’s established presence in its chosen market niche, good management, improving asset quality and modest profitability.

Plantersbank continues to have a strong franchise in the SME market, which it has chosen to focus on since the bank’s beginnings in the early 1960s. Efforts to reinforce Plantersbank’s image as the bank for SMEs is not limited to its products and services, but also includes the bank’s social advocacies. This consistency in purpose has been a plus factor in the continued recognition of Plantersbank as an important market player in SME credit, despite increasing competition from other financial institutions in the past years.

“Plantersbank’s strong corporate identity is the foundation upon which its management is based. PhilRatings considers the quality of Plantersbank’s management to be good. Sound leadership is provided by Ambassador Jesus P. Tambunting, chairman and president, who has ably directed Plantersbank’s growth from its small beginnings. Recent changes in management are viewed as positive developments, with the extensive banking experience of new senior officers expected to support and give direction to the aggressive growth that Plantersbank has set for itself in the near future,” PhilRatings said.

Government urged to start operating Phl credit bureau

Government urged to start operating Phl credit bureau

By Lawrence Agcaoili (The Philippine Star)
pdated April 17, 2011 12:00 AM

MANILA, Philippines - Sen. Edgardo Angara is urging the government to start operating the Philippine credit bureau to further strengthen the country’s capital markets and at the same time unlock much needed financing for small entrepreneurs, farmers, and consumers.

Angara said in his speech during the 30th National Credit Congress organized by the Credit Management Association of the Philippines that the Credit Card Information Corp. (CICC) is yet to be fully functional more than two years after the enactment of Republic Act 9510 also known as the Credit Information System Act (CISA) of 2008.

“I hope the government realizes the urgency to finally implement this important law which will certainly strengthen our capital markets,” he stressed.

He pointed out that the government has yet to name the president of CICC despite the fact that the Bangko Sentral ng Pilipinas (BSP) has issued the implementing rules and identified the members of the board last year.

The CICC is supposed to be 60 percent controlled by the National Government and 40 percent owned by qualified investors such as industry associations of
banks, quasi-banks, other credit related associations and associations of consumers is tasked to receive and consolidate basic credit data.

It is tasked to gather and consolidate credit information from banks, credit card companies and government financial institutions into a centralized databank that would serve as a common storehouse which both consumers and financial institutions could access to facilitate smoother credit transactions.

“Millions of Filipino employees and entrepreneurs experience difficulty in obtaining credit because banks are rightfully wary of their lack of credit history. As a result, high interest rates are imposed on them to compensate for perceived high risks,” Angara lamented.

Angara explained that credit is badly needed to spur growth in the countryside.

“Microfinance, micro-agri loans, micro-insurance – these are the emerging needs in our countryside. When we push for inclusive growth, we also have to advocate for inclusive finance to ensure that our rural folks also cash in on the benefits of progress,” he added.

The BSP had said that if banks had a better grasp of the credit-worthiness of borrowers, those who have maintained clean credit records may get charged lower interest rates and, therefore, be encouraged to borrow. In the same light, those with poor credit records would either be penalized with a higher premium risk.

“A credit bureau will help banks price risk better. The cost of doing business will also be rationalized in the process,” the BSP said earlier.

A study conducted by the World Bank stated that the establishment of the credit bureau would help increase the probability of small firms to access financing from 28 percent without a credit bureau to 40 percent.

It would also reduce financing constraints for small firms. Under the existing environment, only 27 percent of small firm are without constraints in obtaining borrowed funds. This number is projected to improve to 49 percent.

Sharing credit information, likewise, would increase efficiency of banks in processing loan applications by 43 percent while default rate could drop significantly to only two percent.

PhilPaSS transactions higher by 9.6% to P206.6 trillion last year

PhilPaSS transactions higher by 9.6% to P206.6 trillion last year

By Lawrence Agcaoili (The Philippine Star)
Updated April 07, 2011 12:00 AM

MANILA, Philippines - The total value of financial transactions that passed through the payments facility of the Bangko Sentral ng Pilipinas (BSP) went up by 9.6 percent last year as more overseas Filipino workers (OFWs) coursed their remittances through the central bank’s Philippine Payments and Settlements System (PhilPaSS).

The BSP reported that the value of transactions coursed through PhilPaSS amounted to P206.6 trillion last year or P18.5 trillion more than the P188.5 trillion recorded in 2009 as the number of processed and settled transactions jumped 22.2 percent to 916.3 million

“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 BSP stressed.

Data showed that a total of 112.6 million OFW remittance transactions involving P4 billion were coursed through the PhilPaSS Remit system last year.

The PhilPaSS-Remit system is part of the advocacy of the BSP to help Filipinos abroad and their beneficiaries by providing a safer, faster, and cheaper means of remittance.

The BSP has encouraged banks and financial institutions to course OFW remittances through the central bank’s electronic payment and settlement system so that beneficiaries of Filipinos working abroad could enjoy lower fees. There are about 12 banks that are currently coursing their OFW remittance transactions through the central bank’s PhilPaSS-Remit System .

The project is one of the initiatives undertaken by the BSP in coordination with the Association of Bank Remittance Officers Inc. (ABROI) through a memorandum of agreement (MOA) last December.

The BSP said the settlement of OFW remittances through the PhilPaSS Remit System would result in savings of between P100 and P500 per transaction as current system charges between P150 and P550 per transaction. OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate of P50 per transaction instead of the current range of between P100 and P550 per transaction.

Saturday, April 16, 2011

Smart to expand its mobile money transfer service across the country

Smart to expand its mobile money transfer service across the country

By Ehda M. Dagooc (The Freeman)
Updated April 15, 2011 12:00 AM

CEBU, Philippines - To further boost the eCommerce and mobile money transfer services in the Philippines, Smart Communications vows to further expand its Smart Money network across the country.

During the recently concluded National Microfinance Stakeholders Summit at the Bangko Sentral ng Pilipinas (BSP), Smart’s Financial services senior manager Maybelle Santos emphasized how electronic money, specifically Smart Money, empowers remote, unbanked, and underserved areas in the Philippines, by enabling them to facilitate secure, economical, and convenient financial transactions, bills payment, and airtime reloading through—mobile phone.

The two-day affair showcased products and services that cater to the needs of the microfinance sector, including Smart Money, the world's first re-loadable payment card linked to a mobile phone.

The summit kicked off with a forum entitled "BSP and Financial Inclusion: Using Mobile Phone Technology to Expand Access to Finance”, a discussion by key players in the industry of how mobile commerce and electronic money can create enabling financial ecosystems for members of the base of the pyramid (BOP) to trigger economic development and empower industries.

Out of 1,635 municipalities in the country, only 610 have banks and only 27 percent of Filipinos has access to financial channels.

In 2010, Smart Money was able to successfully facilitate P13.5 billion worth of transactions within the remote communities that used to have limited or no access to financial services.

“Through strategic collaborations with local and international partners, Smart Money is able to provide Filipinos anywhere in the archipelago with simple, secure, affordable and convenient means to send and receive cash, even without the presence of banks and ATMs in their communities,” said Santos.

There are currently over 8.5 million Filipinos using Smart Money who enjoy the benefits of airtime reloading, bills payment, ATM withdrawals from over thousands of ATMs here and abroad, peer-to-peer mobile money transfers, cash remittances from any of 95,000 international partner transfer locations, and purchases from MasterCard establishments all over the world and on the worldwide web.

The platform also allows Smart Money users to send fund transfers directly to any of over 45 million Smart subscribers. Smart Money also provides sustainable livelihood projects and new business opportunities to help the BOP and micro-entrepreneur store owners enhance their lives and maximize their strengths. (FREEMAN)

Web-based POS solution for SMEs launched by PLDT

Web-based solution for SMEs launched by PLDT
By Mary Ann Ll. Reyes (The Philippine Star)
Updated April 16, 2011 12:00 AM

MANILA, Philippines - Small and medium enterprises, who long for a point-of-sale (POS) system that can track how much they sell and how much stock they have left at their stores in real-time and from anywhere, can now turn to PLDT SME Nation.

With PLDT Check Out, SMEs can have a cost-effective POS solution that uses the web to connect their stores to the head office and transmit sales and inventory data. The owners can even monitor sales and inventory while half way around the globe as long as they have an Internet connection.

PLDT SME Nation Head Kat Luna-Abelarde said this is the first web-based POS solution for SMEs in the country.

“PLDT Check Out answers the need of SMEs for information that will allow for timely decision-making,” she said. “Studies have shown that sales can increase by as much as 20 percent and net profits can grow by 30 percent with a POS system.”

POS refers to the location where a transaction occurs. A POS system incorporates the software and the hardware, usually called the POS terminal, which is used to complete the transaction and print the receipt. This terminal is sometimes called the cash register.

“PLDT Check Out minimizes the cost of having a POS system. Convenience of tracking stores’ sales transactions and inventory levels is now within reach for many SMEs,” Luna-Abelarde added.

PLDT Check Out has two components: A POS Front-End System, which is a browser-based POS system, and a POS Headquarter System, which the owner uses to monitor sales transaction data transmitted from the Front-End System in real-time.

For a monthly service fee of P2,750 per store or branch, and a one-time fee of P500, SMEs can now have an automated process for accepting and recording sales transactions, monitoring inventory and sales analytics. The monthly fee already covers software updates, maintenance of software and 24/7 technical support.

SMEs who want to avail of PLDT Check Out must have an existing PLDT SME Internet connection. Clients just need to have a computer to access the web-based POS application.

The benefits of this solution are evident. A client with a grocery store for example can see how much he has sold at any given time. He will also know when to replenish stocks and thus cut handling and storage costs too.

PLDT SME Nation assistant vice president for marketing Amil Azurin said the traditional way of monitoring sales and inventory include pen-and-paper tracking, stand-alone electronic cash registers, and on-site POS, which can cost a lot.

“Acquiring a conventional POS system involves upfront costs for hardware and software,” he said. “This can hamper cash flow. On top of that, there are monthly payments that strain cash flow even further.”

The cost of ownership for one year for a conventional POS system – complete with software, POS terminal, and server – can reach almost P600,000 compared to only P64,988 for PLDT Check Out. The two-year cost of ownership for the conventional setup can cost more than P200,000 compared to only P44,988 for PLDT’s solution.

Since this is a web-based solution, SMEs can monitor their stores’ operations from anywhere using any computer hooked to the Internet. PLDT Check Out is also easy to set up since there is no need for high-end hardware and server requirements. The solution also obviates the need for manual back-ups, reconfigurations and upgrades.

Friday, April 15, 2011

Three telco companies complete nationwide network interconnection

Three telco companies complete nationwide network interconnection

By EMMIE V. ABADILLA

April 15, 2011, 2:48am

MANILA, Philippines – At last, subscribers of rival telecommunication companies in the same town or city will no longer have to pay long-distance rates to call each other via landline phones.

The networks of Globe Telecom, Bayan Telecommunications (BayanTel), and Digitel Telecommunications Philippines (Digitel) are now 100% interconnected nationwide, after the Globe and Digitel networks in Lucena City and the rest of Quezon province were linked.

The National Telecommunications Commission (NTC) required full interconnection among the three carriers under the law, Republic Act 7925, the Public Telecommunications Policy Act of 1995, meant to create a universally accessible, fully integrated nationwide network to attract more infrastructure investments from the private sector.

Globe and Digitel have established interconnection in common operation areas in the National Capital Region and in the provinces of Camarines Norte, Bataan, Lucena, Sorsogon, Ilocos Sur, Nueva Vizcaya, and Zambales. On the other hand, Globe and Bayantel are both present in the National Capital Region and the provinces of Iloilo, Cebu, Eastern Samar, Negros Occidental, Leyte, Southern Leyte, Misamis Oriental, Agusan del Norte, Davao del Sur, South Cotabato, Albay, Camarines Norte, Camarines Sur and Sorsogon.

Meanwhile, PLDT has yet to fulfill full interconnection with its competitors but its recent purchase of the Gokongwei-owned Digitel is expected to hasten interconnection.

To date, both PLDT and Globe are locally interconnected only in Davao City, Batangas, Cavite, Cebu, Bohol, Leyte, Negros Occidental, Negros Oriental and Cotabato City. The two companies’ networks are not yet interconnected in at least 20 more provinces where both have commercial operations, including the provinces of Pampanga, La Union and Benguet.

Earlier, the NTC and the provincial board of Pampanga announced that PLDT and Globe will implement the interconnection of its networks in the province on April 15, 2011.

“We’ve always been ready and waiting to interconnect our network with all our competitors,” declared Atty. Froilan Castelo, Globe’s head for corporate and legal services group. “Interconnection of landline facilities is a must if we want economic development to spread beyond urban areas.”

After completing its nationwide interconnection with Digitel and BayanTel, Globe hopes to speed up interconnection agreements with PLDT to develop the country’s telecommunications infrastructure.

Gov’t launches text message system

Gov't launches text message system

By GENALYN D. KABILING

April 15, 2011, 6:59pm

MANILA, Philippines -- In a bid to fight bogus alarmist messages that cause unnecessary panic, Malacañang has launched the "Official Text Message" system to provide accurate updates to the public in times of disasters and other emergencies.

The government has linked up with major telecommunications firms, namely PLDT/Smart, Globe, and Digitel/Sun, for the establishment of the free public safety advisory system via text messaging.

In a public-private partnership in public safety and disaster communication, the telecom firms have volunteered for the timely broadcast of accurate messages to their subscribers during typhoons, floods, earthquakes and other emergencies.

The "Official Text Message," that will come from concerned government agencies, will come from the mobile number 1456.

Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office (PCOO) said the new public safety advisory program seeks to avoid panic and provide guidance to citizens to safeguard lives and properties during typhoons, floods, earthquakes and even security emergencies.

"In times of crisis, accurate information breeds confidence and silence breeds fear. It is vital for the government to give the correct advisories to the public to avoid panic over unverified statements and hoax messages," Coloma said.

The National Telecommunications Commission has already issued a memorandum on the guidelines for public safety broadcast of text messages during calamities and other emergencies. (Genalyn D. Kabiling)

Pres. Aquino wants shift to electric tricycles to ease impact of high oil prices, pollution

Pres. Aquino wants shift to electric tricycles to ease impact of high oil prices, pollution

13-Apr-11, 5:31 PM | Chichi Conde, InterAksyon.com

MANILA, Philippines -- The Philippines will shift to electric tricycles from oil-powered ones as part of measures to ease the impact of rising prices of oil and petroleum products, President Benigno Aquino III said on Wednesday.

Aquino, who made the announcement during the launching of “e- tricycles” in Mandaluyong City, said an initial 20,000 units will be built under the program. He pointed out that some 3.5 million oil-powered tricycles in the Philippines consume $2 billion dollars worth of petroleum products annually.

Aquino transferred 20 of these e-tricycles to Mandaluyong City. The Asian Development Bank, which donated the vehicles, called today’s event an “important first step towards a sustainable, energy-efficient transport model for the country.”

In a statement, the bank said it “is currently in discussions with the government and other development partners on a proposed project to significantly scale up the rollout of energy efficient e-trikes in Manila and other urban areas as early as 2012.”

The president said e- tricycles will be “cheaper” to operate than fuel-powered ones. The e-tricycles will run on lithium-ion batteries that are commonly used in cell phones and laptop computers. Although more expensive than the ordinary lead-acid battery used in motor vehicles, lithium-ion batteries can be recharged more than 2,000 times, allowing operators and owners to save money in the long run.

The ADB said it will install four charging stations in Mandaluyong City, which will be able to charge the e-tricycle batteries to 50 percent capacity in less than 30 minutes. One of the charging stations will use solar energy, the bank added.

Apart from being cost-efficient, e-tricycles, like electric cars, are decidedly environment friendly.

According to the ADB, motorized tricycles in the Philippines produce more than 10 million tons of carbon dioxide. "Every 20,000 e-trikes that are introduced to Manila's streets will save the Philippines 100,000 liters of foreign fuel imports each day, saving the country about $35 million annually," said Sohail Hasnie, ADB's Principal Energy Specialist. "This initiative not only benefits the environment, but it also supports the Philippines drive to become more energy independent."

Aside from emitting carbon dioxide, motorized tricycles are also a major source of noise pollution. Many villages in the Philippines disallow these tricycles from entering their communities, especially during the night, because of the noise they make. “Noise coming from these vehicles is measured at a range of 90-97 decibels (dB). Studies suggest prolonged exposure to noise levels at or above 80 dB can cause deafness,” the Asian Development Bank said in an earlier report.

Trainers for Coops Need to Register with CDA

Tuesday, April 12, 2011

PROVIDERS OF TRAINING SERVICES TO COOPERATIVES MAY NOW REGISTER WITH THE COOPERATIVE DEVELOPMENT AUTHORITY AS REQUIRED UNDER R.A. 9520

Early on in middle of January this year, we wrote about the remarks of Atty. Niel Santillan, executive director of the Cooperative Development Authority (CDA), that not one organization involved in providing training to cooperatives has yet registered with the CDA.

Now, we know the answer why.

The answer was that, apparently during that time, the CDA has not yet issued the rules for the accreditation of providers of training services to cooperatives.

True enough. A memorandum on this (Memorandum Circurlar No. 2011-01, Series of 2011) was issued only following the approval of the implementing by the CDA Board of Administrators (BOA)on February 22, 2011, per BOA Resolution No. 39, Series of 2011.

The said rules were issued pursuant to Article 44 of Republic Act 9520 and Section 5 of Rule 7 of its Implementing Rules and Regulations.

Question. Does this mean that all the trainings received by officers of cooperatives prior to March 9, 2011 (fifteen days from February 22, 2011) will not be credited to them? All because the training providers were not yet accredited by CDA. And all because there were no implementing rules issued yet by CDA then?

Anyway, under the Circular, eligible to secure for accreditation are organizations or institutions conducting training to cooperatives. These include Advocacy and Education cooperatives; cooperative federations; cooperative unions; training institutions; government organizations; non-government organizations (NGOs); local government units; state universities & colleges and academe.

A. The applicant for accreditation must posses the following minimum qualifications:

- Must have a juridical personality;

- Must have cooperative development program/s;

- Must have a pool of at least five (5) competent cooperative trainers who posseses the following minimum qualifications:

a. Must be of legal age;
b. Must be a Filipino residing in the Philippines;
c. Must be a holder of at least a Bachelor's degree;
d. Must have attended/completed training course for cooperative trainers; and
e. With at least two (2) years experience as resource person on cooperatives and must be knowledgeable on basic philosophy of cooperatives.

B. The documentary requirements are:

An applicant who seeks to be accredited as cooperative training provider must file a letter-application directly to the Cooperative Development Authority-Extension Office (CDA-EO) where such applicant is based, attaching thereto duly certified true copies of the following documents:

- For Cooperatives, Federations and Unions:

i. Certificate of Good Standing (CGS) issued by CDA specifically for purposes of accreditation;
ii. Organizational profile:

a. Basic Information (Name/address/contact details);
b. List of programs and services;
c. Historical profile of cooperative training conducted;
d. Affiliations, if any;
e. List of Officers and Staff; and
f. List of Trainers with individual profile/bio-data.

iii. Cooperative Annual Performance Report (CAPR) and Audited Financial Statements of the immediate preceding year.

-For Training Institutions/NGOs/Academe:

i. Certificate of Registration from the concerned Philippine Government Agency;
ii. Articles of Incorporation and By-laws where cooperative development is one of its objectives and purposes or cooperative development is one of its identified program thrusts;
iii. Business Permit;
iv. Organization profile

- Basic information (Name/address/contact details);
- List of programs and services;
- Historical profile of cooperative training conducted;
- Affiliation, if any;
- List of Key Officers and Staff; and
- List of Trainers with with their individual profiles/bio-data.

v. Annual Reports and Audited Financial Statements for the last 2 years.

-For GOs/LGUs/SUCs:

i. Certification from head of the agency that such office/unit has cooperative developmentg program, in lieu of the Certificate of Registration; or appropriate local issuance/s creating the office (in the case of LGUs);

ii. Organizational profile:

- Basic Information (Name/address/contact details);
- List of programs and services;
- Historical profile of cooperative training conducted;
- List of Key Officers and Staff; and
- List of Trainers with their individual profile/bio-data.

BAP to Launch Online Credit Information Bureau Run by Microfinance Institutions

Bankers Association of the Philippines (BAP) to Launch Online Credit Information Bureau Run by Microfinance Institutions

by MicroCapital on Wednesday, April 13, 2011 at 9:51am

The Bankers Association of the Philippines (BAP), a nonprofit organization that was established in 1949 to represent the interest of banks throughout the country, has announced plans to launch an online credit information bureau that will be run by microfinance institutions (MFIs). BAP intends to develop the online platform by June. MFIs will be able to provide information pertaining to their clients and will also be able to access information on clients of other participating MFIs. The platform is intended to identify borrowers with bad credit histories and to prevent multiple borrowing. While it is being developed, rural banks can still access credit information through a database that is being used by commercial banks, a privilege granted to them in January 2011. The advantages of using an MFI-only system instead of the existing one have not been enumerated.

Leonilo Coronel, managing director of BAP, commented on the need for MFIs to use credit reports as follows, “The problem here is information asymmetry, as lenders do not know whether the borrowers have multiple loans.”

MFIs in the Philippines that report to the Microfinance Information Exchange (MIX), the US-based data provider, have an aggregate loan portfolio totaling USD 590 million and aggregated assets of USD 869 million as of 2009.

By Julie Moksim, Research Associate

About Bankers Association of the Philippines: Bankers Association of the Philippines is a nonprofit organization that was established in 1949 to represent the interest of banks throughout the country. In 1964, BAP registered with the Securities Exchange Commission (SEC). BAP works in collaboration with local legal entities and the Philippines Chamber of Commerce to advocate regarding laws that relate to banking. Members of BAP include Asia United Bank, Development Bank of the Philippines, Philippine Veterans Bank and Union Bank of the Philippines.

Sources and Additional Resources:

Business World Online: “Microfinance Players to Get Their Own Credit Info Bureau”, April 4, 2011, http://www.bworldonline.com/content.php?section=Finance&title=Microfinance-players-to-get-their-own-credit-info-bureau&id=29190

MicroCapital.org Brief, January 19, 2011: Bankers Association of the Philippines-Credit Bureau Incorporated (BAP-CB) Offers Rural Banks, Microfinance Providers Access to Credit Information System, http://www.microcapital.org/microcapital-brief-bankers-association-of-the-philippines-credit-bureau-incorporated-bap-cb-offers-rural-banks-microfinance-providers-access-to-credit-information-system/

MicroCapital’s Microfinance Universe Profile: Bankers Association of the Philippines

http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bankers+Association+of+the+Philippines+%28BAP%29

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/tiki-index.php