Tuesday, October 18, 2011

Chinabank Savings starts ’em young

Chinabank Savings starts 'em young

By JENNIFER AMBANTA

Responding to the central bank's call to educate the young on being
financially responsible, Chinabank Savings, a subsidiary of the China
Banking Corp., has launched a start-them-young savings program.

Children as young as 7 are now considered an important component of the
savings account portfolio of Chinabank Savings.

At present, 5 percent of Chinabank Savings' deposit portfolio is from
its kiddie savers product called "Easi-save", where children can save as
little as P500 initially and build up their savings from there.

If parents opt to start their children's account at a much bigger sum of
P3,000, the kiddy depositors get a free "biggy bank" as an incentive to
even save more.

The savings account will yield a 1.25 percent interest per annum with a
maintaining balance of P500.

According to Janice Ty, deputy senior manager for product development
and marketing services of Chinabank Savings, the bank hopes to improve
the 5 percent share of the children's savings in the total deposit
portfolio.

"We aim to improve it in the coming months, we will have tours and we
will partner with schools to encourage savings," Ty said.

Data show that only 5 percent of Filipino kids have a savings account
and only 22 percent of Filipinos have a savings account with a minimum
deposit of P3,000.

"Most of the youngsters' first savings accounts are payroll accounts, so
it is really best to start teaching the kids the value of money at an
early age," said Ty.

Chinabank Savings recently opened its 21st branch in Daraga and will
open five more before the year ends.

BSP and Citi Foundation have joined hands in maintaining an exhibit that
aims to educate kids about the value of money.

Citi Foundation, the social responsibility arm of Citi Philippines, aims
to keep kids in the know about saving through an exhibit tagged as
"Money Matters for Kids".

The exhibit opened in 2009 and will be housed this year at the BSP.

Sanjiv Vohra, Citi country officer for the Philippines, represented the
Citi Foundation during the signing of the deed of donation to the BSP,
together with Philippine Business for Social Progress executive director
Rafael Lopa and Museo Pambata executive director Maricel Montero.

Vohra said financial education should not be taken lightly by parents.

"Financial education should not be underestimated. Even at a young age,
it is important to start a conversation with our children on how they
can become wise savers, careful spenders and smart consumers. So, we are
very grateful that our long-time partner in advocating financial
literacy, Bangko Sentral ng Pilipinas, will continue and develop what we
have started with 'Money Matters for Kids!,'" said Vohra.

The exhibit aims to educate both kids and parents the value of saving at
an early age.

According to BSP Gov. Amando Tetangco Jr., "This exhibit will be a great
help in enriching our financial literacy initiatives and we look forward
to transporting it to different cities, municipalities and provinces
around the country. Being involved in financial education is a process,
a long-term investment."

"Our taking over 'Money Matters for Kids!' is certainly in line with our
advocacy and we will pursue its thrust to educate children about the
values of money for them to have good financial decisions," Tetangco said.

"Money Matters for Kids!" introduces money concepts to children through
different sections and fun activities.

They can learn how to identify authentic bills in "Spot the Difference,"
develop their budgeting skills at the mock grocery store, and get
familiar with bank transactions through the child-friendly automated
teller machine (ATM).

The exhibit will run until Oct. 29, 2011, after which the BSP will take
it around the country as part of its financial education campaign.

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Small business lending up sharply

BY IRMA ISIP

Lending to micro, small and medium enterprises (MSMEs) by state-owned
Small Business Corp. (SBC) reached a record high of P4.2 billion in
2010, up 43 percent from P2.9 billion in 2009.

Benel P. Lagua, SBC president and chief operating officer, said last
year's lending brought SBC's total loan funding to MSMEs to P28.9
billion since 2002.

SBC's largest portfolio is its wholesale lending, amounting to P1.9
billion which was released to 151 partner financial institutions, of
which 30 were new accounts.

Lagua attributed the higher lending to stepped-up partnership with the
banking sector. SBC has also taken steps in sharing risk-based lending
technology with its partner financial institutions through seminars and
trainings.

According to Lagua, wholesale microfinance is still SBC's best
performing lending program, reaching P1.6 billion in 2010 from P1
billion in 2009.

Of this, P844 million was released to the 19 poorest provinces through
the Rural Micro-Enterprise Promotion Program (RuMEPP).

A 7-year program with funding from the International Fund for
Agricultural Development, RuMMEP complements the government's programs
for poverty alleviation by providing sound credit delivery matched with
business development services.

According to Lagua, the MSME retail lending recovered in 2010 after a
slight slump in 2009. Working capital and fixed asset financing
increased by 41 percent reaching a total of P506 million, against P359.9
million in 2009.

Retail accounts stood at 241, of which 102 were new.

SBC also last year issued credit guarantees of P136.6 million, up 65.6
percent from P82.5 million in 2009.

"SBC has proven that adopting a risk based approach as opposed to
traditional collateral based lending helped us maintain a reasonable
default rate and a good earning portfolio without compromising our
mandate of lending to non-bankables," Lagua said.

Luzo has the bulk (65 percent) of the SBC's loan portfolio.

SBC is trying to increase its portfolio in the Visayas and Mindanao.

Mindanao increased its share to 21 percent as of year-end 2010 while the
Visayas also increased its share of the portfolio to 14 percent in the
same period.

Monday, October 17, 2011

World goes gaga over buko juice

World goes gaga over buko juice
By MARVYN N. BENANING
October 16, 2011, 10:37pm

MANILA, Philippines — International demand for coconut water (buko
juice) is expected to grow dramatically as more and more people become
health-conscious. To Philippine Coconut Authority (PCA) Administrator
Euclides G. Forbes, the global craving for coco water is good news for
the nation's coconut industry.

For the first semester alone, countries thirsting for buko juice raised
their imports by 315 percent, Forbes said.

Since coconut water became in vogue, more countries purchased the liquid
and chances are, they will export it in the future, he said.

The PCA's first semester figures showed 7,500,742 liters of coconut
water exported to the Americas, Europe, Asia-Pacific, Latin and Central
America, and the Middle East.

In comparison, last year's record for the same semester was 1,807,087
liters.

The highest increase was registered by the US, which raised its imports
by 387 percent, taking in 6,196.211 liters compared with last year's
1,273,324 liters.

Coco water exports to Europe grew to 213,220 liters from last year's
72,280 liters.

For Asia and the Pacific, the exports rose from 145,778 liters to
360,412 liters, while the exports to Latin and Central America zoomed to
483,338 liters from only 190,990 liters for a comparable period in 2010.

In the Middle East, the exports skyrocketed to 166,561 liters from only
37,450 liters.

Forbes said coco water is a natural beverage rich in potassium and
magnesium and contains a considerable amount of vitamin B, like thiamin
that strengthens the muscles, delays fatigue, and maintains normal heart
function.

The liquid is regarded as a good source of electrolytes and glucose, and
has been found to be suitable for intravenous rehydration. It is
considered to be an effective treatment for urinary stones.

After his US visit to the US last month, President Benigno S. Aquino III
said two American firms expressed interest in investing in the country's
coconut industry.

Forbes said the high demand for coconut water compels the country to
plant more trees to meet the demand not only for coconut water, but for
other coconut byproducts as well.

He reaffirmed his vow to implement vigorously the Participatory Coconut
Planting Project.

Under this program, farmers are not only beneficiaries of the project,
but also active partners in the development process.

Dairy co-op has 50,000 cows

Dairy co-op has 50,000 cows
By ZAC B. SARIAN
October 5, 2011, 3:41pm

MANILA, Philippines -- Let's take a peek at the biggest dairy
cooperative in Thailand. This is the Nongpho Dairy Cooperative in
Ratchaburi province located over a hundred kilometers from Bangkok.

This is the biggest dairy cooperative in Thailand that boasts 5,000
members who produce more than 200 tons of fresh cow's milk every day.
The members have about 50,000 cows which the Thai animal breeders have
developed by crossing the Holstein Friesian from the United States and
the native Thai cow. The result is what they call the Tropical Holstein
which is adapted to the tropical and humid condition of Thailand.

The cooperative was officially formed in 1971 about eleven years after
the government of Thailand started to promote dairying in the country
with the use of dairy cattle. The government program was so successful
that it didn't take long for the farmers to produce excess milk that
could not all be consumed as fresh milk. The milk had to be turned into
milk powder initially, and the farmers needed a processing plant where
they could sell their milk production.

Fortunately King Bhumibol Adulyadej saw the farmers' plight and decided
to contribute substantial cash to help the cooperative build its
processing facilities. Today, the co-op runs several processing plants
producing fresh milk in bottle and in pouch, ice cream, yoghurt, UHT
milk and others. The co-op runs its own feed mill to service its
members. It also has its own convenience store, gas station and an ice
plant.

The co-op has been very profitable. In 2010, it netted Bht100 million
equivalent to more than P140 million in Philippine money. In 2011, it
expects to earn more as its sales are expected to grow by 7 to 8
percent. Sales of milk could reach Bht1.7 to Bht1.8 billion.

In Thailand, it is said that unemployment is less than 1 percent. And
that's because the farmers in the provinces, like the Nongpho dairy
farmers, are making good money. One who is taking care of 8 cows could
expect an income of Bht10,000 a month. Since the average holding is 18
head, the income is much more than that. Besides, the dairy farmers have
other sources of income. They also plant cash crops like sweet corn,
fruits and vegetables.

Dairy cows in Nongpho are much cheaper than in the Philippines. The
price of a yearling ranges from Bht28,000 to Bht35,000 compared to the
P135,000 Filipino farmers have to pay for the imported Holstein
Friesians from New Zealand.

Artificial insemination is very widely used in Thailand. And the
government is very helpful. The semen is given free. Only the service of
the technician doing AI is paid 60 baht.

Bill seeks to encourage use of small solar power systems

By Donnabelle L. Gatdula (The Philippine Star) Updated October 17, 2011
12:00 AM Comments (2)

MANILA, Philippines - Bayan Muna party-list Rep. Teddy Casiño has filed
a bill that would "reduce electricity rates and revolutionize the power
industry by putting it in the hands of the people."

The proposed One Million Solar Rooftops Act or House Bill 5405 mandates
the government to encourage the use of small solar power systems in
homes and business establishments through various financing packages and
fiscal incentives.

In his bill, Casiño said government financial institutions such as
Pag-IBIG, GSIS and SSS can offer soft loans for members who want to
install solar power rooftops in their homes and businesses. The proposed
act covers solar power systems with a capacity of 10 kilowatts (kW) and
below for residential and 500 kw and below for business establishments.

The bill also requires electricity distributors like Meralco to allow
small solar power users to feed excess power into the system and get
paid for it through a net-metering arrangement, resulting in savings in
their monthly bills.

"This measure will make ordinary electric consumers producers of
electricity as well, thereby empowering them and opening up various
options for reducing their electricity bill. It even allows the
homeowner to earn extra money when he is at work and his kids are at
school, since the solar power rooftop produces electricity the whole
day," Casiño said.

"It is hoped that through this, the demand for clean solar energy, as
well as the opportunities for local manufacturing and related solar
energy products and services, will increase," the lawmaker said.

At the House Committee on Energy hearing, Casiño insisted that one way
to reduce electricity rates is for government to immediately allow the
installation of 200 kw of solar power to reduce the expensive peak power
rates offered by the Wholesale Electricity Spot Market (WESM).

He said Meralco's announcement over the weekend to increase its
electricity rates to an average 14.19 centavos per kilowatthour (kwh) is
sufficient proof of how prices in WESM affect the monthly power bill of
consumers.

The solar industry already shared its findings to government on the
alarming prices at WESM, particularly in the months from May to July
this year, where clearing prices have been above P10 per kwh, spiking to
as much as P19 per kwh in June. Last year, in the month of February and
September, WESM prices reached as high as P60 per kwh to a low of P35
per kwh, respectively.

"On the other hand, cost of solar power is declining as global prices of
panels are rapidly falling. Installing solar now is a wise investment.
Solar will prepare the country for the summer months, and arrest a
possible increase of peak power prices next year in WESM. If government
is serious in implementing the Renewable Energy Law, it has to
accelerate its permitting process, start awarding solar service
contracts, and allow homeowners and commercial establishments to produce
their own power needs by using their rooftops," Casiño said.

BPI Globe BanKO eyes tieup with International Rice Research Institute

By Marianne V. Go (The Philippine Star) Updated October 17, 2011 12:00
AM Comments (0)

MANILA, Philippines - BPI Globe BanKO is studying a possible tie-up with
the International Rice Research Institute (IRRI) as part of the savings
bank's novel approach to provide microfinance services and assistance to
the country's rice farmers and eventually to corn farmers as well.

In an interview, BPI Globe BanKO president Teresita B. Tan said research
is still currently being undertaken on how the tie-up would be to help
the country's rice farmers.

According to Tan, IRRI has an existing "nutrient" mobile assistance
program whereby farmers can text IRRI certain data about their palay
(unhusked or paddy rice) production and IRRI would text them advice on
how much nutrient they should use to increase their production.

IRRI's mobile assistance program, thus, Tan said, dovetails with BanKO's
own mobile banking approach to microfinance.

BanKO, which is a joint venture among Bank of the Philippine Islands (40
percent), Globe Telecom (40 percent) and Ayala Corp. (20 percent), is
the country's first fully mobile savings bank that offers
banking/financial services to the country's lower income and "unbanked"
segments.

BanKO's approach to banking makes it easy and convenient for the
"unbanked" sector to open an account through so-called "partner-outlets."

Transactions - which they prefer to call as "cash-in" or deposits and
"cash out" or withdrawals are then all conducted via mobile phone,
specifically of course through a Globe line.

However, cash in transactions are free of charge only up to four times a
month and are subsequently charged for additional deposits.

On the other hand, all cash out transaction are subject to a nominal fee.

Securing a loan, Tan said, is now more accessible to small borrowers to
fund their micro or small and medium enterprises — all through mobile
banking.

However, Tan points out that BanKO's approach to microfinance adopts a
wholistic plan whereby it "packages" its lending program to ensure a
more sustainable business.

For instance, in its PuhunanKO or microloans program, Tan explained,
BanKO has tied up with multinational manufacturing firms such as Procter
& Gamble, Unilever and Nestle, whereby a small borrower can loan P2,000
to fund a "sari-sari" start-up package from either of the three companies.

Similarly, BanKO offers a "packaged" approach for small home loan repair
loans with such entities as Habitat for Humanity, thus ensuring that the
small borrower do not misuse the funds.

BanKO's possible tie-up with IRRI, Tan said, would offer a similar
packaged approach to rice farmers in terms of technical assistance and
access to IRRI's rice seed bank.

BanKO's microfinance loan portfolio already amounts to P1.8 billion, Tan
said.

Sunday, October 16, 2011

Lowly ‘suman’ eyed as Antipolo’s top export

Lowly 'suman' eyed as Antipolo's top export - 2 TONS NEEDED PER MONTH

By Niña Calleja
Philippine Daily Inquirer
1:50 am | Sunday, October 16th, 2011

If the country's lowly buko juice can reach the US shore, why can't
Antipolo's "suman?"

Antipolo Mayor Nilo Leyble told the Inquirer on Friday the pleasant
prospect of exporting tons of suman—glutinous rice wrapped in coconut
frond leaves—to the US and European markets after joining
Chinese-Filipino businessmen and other government officials in trip to
Beijing, China.

According to him, exporter Philip Young wanted to invest in the local
delicacy which the city has been known of.

"He wanted us to produce two tons of suman every month. This would
obviously increase and stabilize the income of our suman makers," Leyble
said in a phone interview.

Leyble joined the delegation of businessmen and government officials
headed by Sen. Francis "Kiko" Pangilinan who attended a conference on
economic and social partnership on Sept. 22 to 29.

Excited

The mayor said the idea of suman being sold in the groceries in the US
and Europe excites the around 40 suman makers in the city who earn only
on weekends and Holy Week due to the influx of churchgoers.

Thousands of religious and Catholic devotees visit the National Shrine
of Our Lady of Peace and Good Voyage which houses the 385-year-old image
of the Virgin Mary. Suman makers usually make ends meet from the
earnings they get from the purchases of suman and other delicacies by
local and foreign tourists.

Leyble said the investor will send a technical team on Monday to meet
with the local makers and assess their production.

He said he had proposed the creation of a cooperative to ensure that the
products would meet the quality standards and other export requirements.

"We would also like to equally divide the work among local producers,"
he added.

Asked how perishable goods can be exported without being spoiled during
shipment, Leyble said the businessman knew what he was doing as he has
been exporting delicacies for several years.

"The packaging also has something to do with it," the mayor said.

Leyble, who had worked at a suman factory when he was a child to augment
his baon in school, said the suman export is a big boost to businesses
in Antipolo.

Rebecca de Leon, a 45-year-old suman maker, said she was delighted by
the plan for it would always mean additional income to her.
"We don't have to worry about the capital because somebody would finance
it," De Leon said.

She said her family had been in the business since 1970s and if the plan
is realized, this would be the first time her products would be exported.

"Minana ko na 'to sa nanay ko … Masaya kami na matitikman sa abroad ang
luto namin (I inherited this from my mother … We are happy that our
products may be served and consumed abroad)," she said.

Saturday, October 15, 2011

Chinese housing giant teams up with Solid Group for Phl venture

By Mary Ann Ll. Reyes (The Philippine Star) Updated October 15, 2011
12:00 AM Comments (2)

MANILA, Philippines - A world leader in modular building technology has
teamed up with the Solid Group to bring to the Philippines a prefab
technology that will cut the cost of affordable housing by half.

Representatives from Chinese firm Yahgee Modular House Co. Ltd., led by
its general manager Shang Yuexiang, were brought around Metro Manila by
Solid Group president David Lim recently for a glimpse of the state of
housing in the country.

Yahgee's China-based factory has a production capacity of five million
square meters that produces either standard or customized modular
housing (prefabricated) units built using insulated metal technology.
Its modular houses and buildings can be found all over the world,
including Hong Kong, Macau, Vietnam, Singapore, Pakistan, Bhutan, Qatar,
Ethiopia, Sudan and Caribbean regions.

This is the first time Yahgee will bring its technology to the
Philippines and has agreed to give Solid Group the exclusive right to
distribute it here.

Lim told The STAR that the units will be assembled here in the
Philippines and, depending on the response from the market, their
partnership with Yahgee includes the possibility of not only assembling
the units here but also manufacturing them in the country.

Yuexiang said in an interview with The STAR that they were "touched" by
what they saw during their visit and are honored to bring their
technology to the Philippines for the first time to help improve the
lives of Filipinos.

Because of the durability, affordability and speed by which the units
could be assembled, the Taguig city government immediately ordered 36
units for classrooms and day care centers.

Four school houses were also built in seven days in Nueva Ecija and the
units withstood the wrath of typhoons Pedring and Quiel, SolidGroup
Technologies Corp. president Beda Manalac revealed.

Noted architect Ed Calma said metal houses last longer than cement
houses while another highly acclaimed architect, Gil Coscolluela,
emphasized that modular building technology will be the future in housing.

The Solid Group has joined the Department of Education's adopt-a-school
program and has committed to build a total of 60 school houses (one
classroom every month for the next five years) in areas that include
Lucena, Caritas Manila, Mandaue, Quezon City, Marikina, Paranaque,
Cavite, Mandaluyong, Laguna and Taguig.

But in addition, the Solid Group is also aiming to make affordable
housing "more affordable" using Yahgee's technology by making it
commercially available.

Lim said they will construct affordable housing units in "urban renewal
properties" in Manila, Tandang Sora, Araneta Avenue, United Paranaque,
Pasay, Sucat, Bicutan, and Blumentritt in lands owned by Solid Group
covering a total of over three hectares.

Calma and Coscolluela have indicated their desire to lend their name to
the project while other artists and groups have also volunteered to be
involved, Lim revealed. "They may do it via their respective
foundations," he said.

For his part, Coscolluela said that "it is not much of the design work
where I will be involved with but more of advising and guiding the
MyHouse group in providing efficient planning as well as making sure
that basic needs and requirements of each homeowners are met."

To be called MyRainbow Place, Lim said that three-story buildings
utilizing the metal modular housing technology will not only change the
city landscape but will also provide young professionals with a
dignified lifestyle.

With unit sizes ranging from 18 to 20 square meters, they will cater to
the "renters," some of whom pay as much as P5,000 a month for
bedspacing, or shell out as much as P250 per day just to commute from
outside Metro Manila to their workplace.

"We are targeting to sell to young couples and parents who have no more
than two children and who will actually live in the units and not lease
them out or buy for investment purposes," Lim explained.

He said that based on their computations using Pag-IBIG financing, the
target monthly amortization will be between P3,000 to P5,000 per unit, a
far cry from the P10,000 a month per unit charged by other developers
for similarly sized studio units.

In addition, Lim said the units will be fully furnished and fitted with
customized toilets and bath. "What we want is for the unit owners to
completely change their lifestyle and regain their dignity that is why
we decided that the units should be fully furnished and well-designed,"
he pointed out.

The Solid Group top executive, whose company has pioneered the dual SIM
mobile phone technology under the brandname MyPhone and made brands such
as Sony households names in the country, also revealed that a number of
local government units and companies have signified their intent to
build employee housing projects using the technology, which has been
patented locally jointly by Yahgee and MyHouse.

"We will also make the technology available via franchising. Small lot
owners can also partner with us, build a number of units, and then we
can just divide the profits," he said.

Government abandons prototype for life microinsurance product

THE GOVERNMENT no longer pushed through with its plan of coming up with
a prototype microinsurance product combining life protection and
savings, choosing instead to leave it up to market players to design it.

Rino C. Asuncion, senior adviser at the German Agency for International
Cooperation (GIZ), said the government "called off" the plan after
holding focus group discussions with representatives of the life
insurers' association, Philippine Life Insurance Association, Inc.
(PLIA), and microfinance institutions (MFI) last February.

In January, the Department of Finance, the National Credit Council,
along with the Asian Development Bank and GIZ, announced they were
developing a prototype product combining microinsurance and savings,
with insurance premiums to be deducted from savings accounts. The
product, as well as a non-life microinsurance product called "Buhay,
Bahay at Kabuhayan," was envisioned to give a boost to the nascent
microinsurance industry.

"The result of the FGDs made us decide to not pursue with our plan to
create a prototype product that would combine life insurance and
savings," Mr. Asuncion said.

PLIA, during the FGDs, asked to "leave the product specifications to
them" as some life insurers already offer a life insurance product with
a savings component.

"PLIA wanted the freedom to construct the savings component of the
product. It was just a matter of adjusting their existing products with
a savings component to fit the microinsurance market," Mr. Asuncion said.

PLIA also pointed out the difficulty of administering the savings
component of the product.

"Aside from working as an insurance company, they would have to work as
a 'bank' because of the savings component. So it would require insurance
companies to either work with a bank or buy a new system or invest in a
technical support group, which would be costly for them," he said.

MFIs, meanwhile, opposed a microinsurance product combining life
protection and savings as this would "directly compete" with their
savings products.

MFIs are composed of rural banks, cooperatives and nongovernment
organizations.

Mr. Asuncion said PLIA and MFIs instead asked the GIZ and the other
institutions to come up with a simplified and standardized contract for
a life microinsurance product, so a consumer could easily understand the
product he or she was purchasing.

Contracts that covered insurers' existing products were long and
complicated.

"We came up with a contract and PLIA submitted it to the Insurance
Commission (IC) for approval," he said.

The contract was approved "months ago," he said.

For his part, National Credit Council Deputy Executive Director Joselito
S. Almario, in a phone interview, said: "We decided to leave to the
insurance providers the decision to come up with a microinsurance life
product with savings."

"We didn't want the industry players to have the impression we were
dictating to them what product to sell. We didn't want that," he said.

Insurers at present are allowed to design their products in line with
their target market's demand and their products are considered
microinsurance products as long as they comply with the IC's definition
for such products.

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

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

Fifty microinsurance products have been approved since the circular was
issued in January 2010. Of these, 33 were life products while 17 were
non-life products.

Sunday, October 9, 2011

A bank in your pocket

WEDNESDAY, 05 OCTOBER 2011 19:24

EXECUTIVE LOUNGE / THIRD LIBREA

THE pace of change in technology development is truly amazing. And the
trend seems to be to provide consumers with what they need when they
want it, wherever they want it. Back in the day, we had to rent VHS and
Betamax tapes from the local video store to watch movies in the comfort
of our home. Now, we can access on-demand digitally-delivered videos
with just a few clicks of your mouse.

And not too long ago, we had to endure long queues at our banks simply
to update our bank balance, to transfer funds or to withdraw cash. So
many changes have happened to the banking industry in terms of
technology that we have to wonder what's next.

As the Internet moves from desktops to mobile phones, useful mobile
banking (not just SMS banking) will truly take off. Rich mobile banking
applications will be developed to harness the capabilities of the newest
mobile phones, and the continuously improving speed and bandwidth of
mobile Internet access will facilitate the change. Soon, any transaction
that can be made with or through a bank—particularly between different
banks—should be available from a mobile phone.

The major telcos in the Philippines are already performing quasi-banking
functions as money transfer agents. They are making significant inroads
in the OFW remittance and money transfer business. Some retail
establishments also now accept payments through these telcos, creating
debit card-like transactions that match what some banks currently offer.

Considering this, allow me now to make a fearless forecast: In less than
a decade, telcos today will be our consumer banks. Access to your bank
accounts will just be a pocket away, the entire day—even during
holidays. Financial institutions will scramble to acquire
mobile-communication infrastructure in much the same way that banks
today acquire other banks to expand their branch network. Some of the
functions of the National Telecommunications Commission and the Bangko
Sentral ng Pilipinas will merge for the purpose of improving the
regulation of digital money. If I were a bank, I would seriously
consider investing in or controlling a telco in the next 10 years before
my float business disappears.

The possibilities are endless. Imagine a future where interbank
transfers through mobile phone applications, will be as easy as
interbranch transfers, through internet banking services today, when all
establishments can accept wireless mobile payments in addition to cash,
debit and credit cards, and when it will no longer be necessary to go to
a bank branch or even an ATM. Imagine telcos expanding their current
digital-cash offerings—banking regulations willing—to the point where
they can support seamless direct transfers to or from traditional bank
accounts, grant credit and sell investment products.

Think of your phone functioning as an all-in-one debit/credit card. The
point of sale terminals of various establishments can communicate
wirelessly with your mobile phone to determine whether to debit your
digital-cash account—if it has funds—or to provide credit—if your
digital-cash account is running low.

Envision your phone allowing you to transfer digital cash to a mutual
fund or other investment account managed by your cash-heavy telco's
Trust department. Essentially, your phone will become your wallet. It
will be just like having your bank in your pocket.

Obviously, some work needs to be done for this vision to become a
reality. Better mobile identity management and know-your-customer
practices and foolproof wireless transaction security are keys to this
future.

Reliable interoperability standards for transferring cash between
different telco digital cash and old-school bank accounts will also be
necessary although we can say that this has already been addressed in
principle by the major ATM switching networks.

Current regulations on e-banking and electronic money may need to be
reviewed to ensure that safeguards and remedies for consumers and
providers of mobile-banking services are ready for the future. Banks
will also need to accept that in time, more and more consumers will come
to expect instant transfers. If this vision becomes real, demand for
non-corporate checking accounts will become extinct and float income
will be replaced by transfer fees.

As for us consumers, can we trust our mobile phones for our monetary
transactions?

Clearly, there are some barriers that need to be overcome. But as sure
as analog theater has evolved to digital media, consumer banking will
have a pervasive presence in our mobile phones. I eagerly await that time.

(The author is the chief information officer and a partner with the
Advisory Services Division of audit, tax and advisory firm Punongbayan &
Araullo. For comments or questions, e-mail Third.Librea@ph.gt.com.)

G-Xchange, Japanese firm partner to boost OFW remittance

SUNDAY, 02 OCTOBER 2011 18:53 JUN VALLECERA / REPORTER

G-XCHANGE INC., the fully-owned remittance unit of Globe Telecom, has
partnered with Japan's Softbank Payments Service Corp. in an alliance
seen to boost the flow of remittances between Manila and Tokyo.

The agreement links Globe Telecom's GCash remittance brand with Softbank
Corp.'s fund-transfer facilities and the competitive rates they offer to
clients in Japan and around the world.

Softbank Payments Service is a subsdiary of Softbank Corp., a leading
telecommunications and media company in Japan.

Softbank Payments Services president and chief executive officer
Shinichi Ata, in tandem with its Manila partners, announced the alliance
in a statement sent by email on Sunday following the completion of its
registration in Japan under that country's Act on Financial Settlements.

The agreement permits the remitting units to engage in the trassmission
or receipt of Japanese yen and Philippine peso to and from each other.

A customer using GCash Remit in the Philippines may deposit money in
Japanese yen in advance and remit a given amount in pesos from the
deposit to the Philippines on a 24/7 basis by using either a personal
computer or a Smartphone.

The remitting units commit to deliver the remittance to recipients as
quickly as inside of 10 minutes in some 18,000 pick-up outlets
throughout the Philippines, or directly through a mobile phone
previously enrolled with Globe's GCash mobile money platform or
alternately to one's account in a bank.

According to the statement, clients are charged a minimum of ¥500
Japanese for each transaction up to ¥10,000 equivalent, considered the
lowest in the industry.

Remittances exceeding ¥10,000 up to ¥30,000 are charged a fee of ¥700
and anything above ¥30,000 are charged ¥1,350.

Globe Telecoms said the remittance tie-up will benefit Filipinos living
in Japan who may now send their earnings back to the Philippines quickly
in a secure and convenient manner.

Softbank vowed to extend the same quality services not only in the
Philippines but to other destinations in the region.

The move should help facilitate the flow of more remittances from Japan
and in many other places around the world where Filipinos have worked
for many years.

Some $20 billion worth of remittance have been expected this year by
regulators who previously forecasted resilient remittance growth
averaging at least seven percent this year no matter the disruptions in
countries in the Middle East and North Africa where a large population
of overseas Filipino workers abound.

Davao farmers get needed info via SMS

THURSDAY, 06 OCTOBER 2011 18:59 KEITH BACONGCO / CORRESPONDENT

DAVAO CITY—Farmers here do not have to run to the City Agriculture
Office (CAO) at the heart of the city if they need assistance and updates.

Since mobile phones are available even in the most remote barangays,
agriculture technicians are now just a text away.

Leonardo Avila III, CAO chief, said this city is the first in the
country to use the short message service (SMS) called Infoboard to
assist the agriculture sector.

Avila said the implementation of the system is in partnership with Smart
Communications as part of its corporate social responsibility.

He said they are using the technology in sending advisories to farmers
such as price updates on commodities and some important notices from the
agriculture department.

Every month the CAO receives an average of 5,000 queries from farmers in
far-flung barangays, the CAO chief said.

Avila cited a case of caterpillar infestation in Calinan early this year
when a farmer sought their help through SMS.

"After we got the message, we immediately dispatched our field
technician to the field to assist the farmer in containing the
infestation. The immediate response prevented a further infestation of
other crops," he told reporters.

Green caterpillar infestation must be contained in the initial stages
because it multiplies very fast, he said.

To be able to receive advisories and get immediate response from the
CAO, Avila advised farmers to manually register their Smart mobile
phones to their field technicians.

"The registration is free; they can come to our office. The advisories
we are sending them are also free. But if they will send on inquiry to
us, it's just P1 per text message," he said, saying the city has 50
technicians who are readily available to assist the farmers.

Since not all farmers in the far-flung areas have mobile phones, Avila
said his office is still negotiating with Smart Communications to offer
cheap mobile phones to farmers.

"This system is commonly used in schools and universities today. And I
have friend at the company so I asked him if we can use the system to
the farmers," he said, adding the system was introduced to the farmers
in November last year.

Around 3,000 farmers have already subscribed in the Infoboard, Avila said.

Life insurers planning to consolidate

TEN LIFE insurance companies plan to consolidate next year to meet the
government's paid-up capital requirement, the country's insurance chief
said.

"About 10 [life insurance] companies are thinking of consolidating to
meet the P250-million minimum paid-up capital requirement by Dec. 2012,"
Insurance Commissioner Emmanuel L. Dooc told reporters yesterday.

The plan has gotten the approval of some of the firms' boards, he claimed.

He, however, declined to name the companies but said these belonged to
the lower half of the Insurance Commission's ranking of life insurers in
terms of total premiums.

Finance Dept. Order 27 issued in 2006 required insurers to have P175
million in paid-up capital this year and P250 million next year.

Mr. Dooc said the life insurers that plan to consolidate will establish
"one new company" that should be fully operational by "June 2012." -- ARRG

BIR says Pag-IBIG exempt from tax, but not members

THE BUREAU of Internal Revenue (BIR) has set the tax treatment of the
Home Development Mutual Fund (Pag-IBIG) in line with the housing
agency's charter.

The bureau affirmed the tax-exempt status of Pag-IBIG in its Revenue
Memorandum Circular No. 43-2011, dated Sept. 28.

"No tax measure of whatever nature enacted shall apply to the Fund...
Any tax assessment against the Fund shall be null and void," Home
Development Mutual Fund Law of 2009 or Republic Act No. 9679 stated.

All assets, properties, benefit payments, contributions and accruals of
Pag-IBIG will also be exempt from taxes. The income and investment
earnings from these are not taxable as well, the law added.

The charter was signed into law in July 2009 and its implementing rules
and regulations were made effective beginning last year.

However, in the case of documentary stamp taxes (DST), while Pag-Ibig is
exempt from the obligation, the other party in the transaction is not.

"The other party to the taxable document who is not exempt shall be the
one directly liable to pay the said documentary stamp tax," the BIR
issuance read.

"The DST is a tax on on transactions. While the Pag-IBIG is an exempted
party, the transaction is not, so the other party will have to pay the
tax," BIR Commissioner Kim S. Jacinto-Henares said in a phone interview
yesterday.

These transactions subject to DST include loan agreements, the issuance
of stocks, the transfer of shares and the like.

Pag-IBIG members, therefore, will still have to pay DST when they take
out loans from the Fund, Ms. Henares confirmed.

The BIR is the government's main revenue-generating agency, responsible
for 70% of state revenues. It is tasked to collect P940 billion this
year. As of August, it already collected P619.713 billion. -- Diane
Claire J. Jiao

BIR clarifies how deposits by co-op members are taxed

THE BUREAU of Internal Revenue (BIR) has reiterated that cooperatives
are not required to withhold taxes on members' interest income from
savings and time deposits.

It has issued Revenue Memorandum Circular No. 47-2011, dated Oct. 5 that
affirmed that interest from savings and time deposits of cooperative
members are not subject to the 20% final withholding tax.

"The memorandum circular was issued to provide all cooperatives with a
guide that only banks are subject to the 20% final withholding tax on
the interest income of deposits," said BIR Commissioner Kim S.
Jacinto-Henares in a phone interview yesterday.

According to Sec. 24 (B) of the National Internal Revenue Code, a 20%
final withholding tax is imposed on the interest from deposits or yield
from deposit substitutes, trust funds and similar arrangement.

The BIR said this provision does not apply to cooperatives, as members'
deposits with the cooperatives are not currency bank deposits nor
deposit substitutes.

A cooperative is an association where members have a common bond of
interest and have voluntarily joined together to achieve social,
economic and cultural ends.

Republic Act 9520 or the Philippine Cooperative Code of 2008 provides
that "Duly registered cooperatives... which do not transact any business
with non-members or the general public shall not be subject to any taxes
and fees imposed under the internal revenue laws and other tax laws."

For cooperatives transact with both members and non-members, only
transactions with members are not taxed. -- A. R. R. Gregorio

PCIC to release P334-M loans for Luzon farmers

WEDNESDAY, 05 OCTOBER 2011 19:37 CAI U. ORDINARIO / REPORTER

AFTER the onslaught of Typhoons Pedring and Quiel, the Philippine Crop
Insurance Corp. (PCIC) disclosed that it will be expediting the release
of P334-million credit to Luzon farmers whose crops were damaged by the
twin typhoons.

In a report to Secretary Proceso J. Alcala, PCIC President Jovy C.
Bernabe said the amount is the biggest payout the agency will be making
to date. This is done in response to the severity of the twin typhoons
and as an expansion measure of PCIC's insurance coverage in the past year.

"Fast-tracking the indemnity payments will enable particularly rice and
corn farmers to recover their losses and replant again," Bernabe said in
a statement.

Bernabe said their preliminary assessment showed about P333.93 million
worth of crops, mostly palay, were insured in 30 provinces covering the
entire Luzon.

The typhoons affected 26,794 insured farmers and a combined insured farm
area of 40,138 hectares.

Apart from the speedy release of the crop insurance claims of Luzon
farmers, Bernabe said they will also reactivate their adjusters in the
private sector to help the PCIC cope with the huge task of verifying the
crop insurance claims of farmers.

Apart from the PCIC, the DA is also extending other assistance to
affected Luzon farmers. Alcala already instructed the National Food
Authority (NFA) to buy storm-damaged palay to provide farmers enough
money for their daily needs.

The DA will also be providing free certified seeds from the DA seed
buffer stock to help farmers replant as soon as possible. This will help
make a "Quick-Turn-Around" palay production program to recover losses
due to the typhoons.

"The DA will link up with agribusiness enterprises, particularly
fertilizer and seed companies, to encourage them to implement a
plant-now, pay-later scheme, coupled with a rice marketing tie-up with
the NFA," Alcala added.

He said despite the severity of the typhoon damage, particularly on
palay farmers, he remains firm in saying that there is no need to import
additional rice for 2011.

The DA already created an interagency task force to assess and validate
the actual damage, particularly on palay, corn and high-value crops.
Alcala said this effort will complement the ongoing October 2011 palay
production survey which is conducted every quarter by the DA's Bureau of
Agricultural Statistics.

The survey results will include the final estimate of the third-quarter
palay production, the projected fourth-quarter palay production based on
standing crop, and projected 2012 first-quarter production based on
farmers' planting intentions.

ADB grants P17.1M for enterprise development projects in Zambales

THURSDAY, 06 OCTOBER 2011 18:24 HENRY EMPEÑO / CORRESPONDENT

IBA, Zambales—The Asian Development Bank (ADB) has approved some
P17.1million worth of livelihood assistance funds to be given to coastal
communities in this province under the bank-funded Integrated Coastal
Resource Management Project (ICRMP).

Dr. Rene Mendoza, provincial agriculturist of Zambales, said several
non-governmental organizations and people's organizations here will be
receiving equipment, facilities and materials for predetermined
livelihood projects that the ADB has approved under the enterprise
development component of the ICRMP.

The projects were approved after the community groups here, with the
assistance of the Provincial Agriculture Office (PAO), prepared and
submitted project proposals for cooperative enterprises to the
Department of Agriculture, which assessed the proposals.

The beneficiaries come from the coastal towns of Sta. Cruz, Candelaria,
Masinloc, Palauig, Iba, Cabangan, San Felipe, San Antonio and Subic.

 Zambales is said to be the first province in the Central Luzon region
to receive funding under the Enterprise Development and Income
Diversification component of the ICRMP. The other components are Policy
and Institutional Strengthening and Development; ICRM and Biodiversity
Conservation; and Social and Environmental Services and Facilities.

Among the initial projects already approved for funding are rice
retailing and meat and fish processing facility in Subic town, which is
up for funding of P464,467.39; tilapia production in San Felipe,
P204,375.40; iodized salt processing and mud crab fattening projects in
Palauig, P387,074.85; and hog fattening farm in Sta. Cruz, P478,518.20.

Reynaldo Reoligio, Zambales provincial aquaculturist, said the Zambales
PAO will also be responsible for monitoring and providing further
administrative and management assistance to the recipient organizations
to ensure that the projects will prosper.

The assistance program requires that the recipient organization, upon
earning back the full capital invested, can only retain 50 percent of
the amount. The other half would have to be donated to a municipal
federation of farmers or fishers to fund more local entrepreneur
projects, Reoligio said.

Mendoza said these projects "augur well for the program of Gov. Jun
Ebdane to develop the agriculture sector in the province."

He added that under the Ebdane administration, the PAO has become more
active in assisting farmers and fisher folk throughout Zambales on
projects and activities that enhance their livelihood and industry.

"After the governor approved a half-million increase in our department's
budget, we have also improved our mobility and facilities and became
more capable in rendering services under our mandate," Mendoza noted.

Recently, the PAO has also facilitated the distribution of 60 gill nets
to fishers' cooperatives in the towns of Palauig and Masinloc and the
distribution of 432,000 tilapia fingerlings that were dispersed by local
government units in the province's rivers and lakes.

Before this, the Department of Environment and Natural Resources also
distributed 10 motorized patrol boats to local government units here
under the ADB-funded ICRMP to support activities in coastal-resources
management.

The Department of Environment and Natural Resources said that
forthcoming ICRMP projects in Zambales would include the mapping and
establishment of marine-protected areas to address the problem of
overfishing, the establishment of a research center and monitoring
station at the Ramon Magsaysay Technological University, and the
implementation of infrastructure and social-development projects in
consonance with the DENR's "Ridges to Reefs" resource protection program.

Thursday, October 6, 2011

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President Goodluck Jonathan yesterday said there will be no sacred cows in the fight against corruption. He said although the campaign

Anna Hazare ended his hunger strike after the government agreed to a new anticorruption bill. But it will take more than a new law to cleanse

President Ellen Johnson-Sirleaf has defending her government's record on the fight against corruption, but insists that the fight must.

Guestblog by Gladiator

Monday, October 3, 2011

Empowering workers as business owners

Business and Society

Empowering workers as business owners

By BERNARDO M. VILLEGAS

October 3, 2011, 2:26am

MANILA, Philippines — My recent two-year residence in Spain gave me a
glimpse of what could be a most powerful instrument to attain the
aspiration of the Philippine Development Plan, 2011 to 2016 of
"inclusive growth."

As the country finally achieves authentic industrialization, with more
and more workers being absorbed in the various industry sectors of
mining, manufacturing, construction, and public utilities, the fledgling
workers cooperatives that are now beginning to appear in Philippine
business can blossom into powerful conglomerates such as the Mondragon
Cooperative, a workers cooperative in Spain started more than fifty
years ago by a Catholic priest.

Mondragon ranks among the top ten largest businesses in Spain with the
most diversified investments in banking, manufacturing, retailing and
real estate. I met some of the top executives of this famous workers
cooperative--which started in Northern Spain--who briefed me on the
phenomenal growth of their organization which implemented to the letter
the principles of empowering workers found in the social encyclicals of
the Catholic church. In fact, its founder's process of beatification is
now ongoing.

I am glad that the final definition of the role of workers cooperatives
in Philippine business is now coming to a head as the Labor Code is
being updated.

The proposed amendment of the "Rules Implementing Articles 105 to 109 of
the Labor Code" by Secretary of Labor Baldoz has created a perfect
opportunity to enlighten all the stakeholders of business about the
nature and essence of workers cooperatives.

As defined under Article 23 (t) of RA 9520, a workers cooperative is
"one organized by workers, including the self-employed, who are at the
same time the members and owners of the enterprise." More specifically,
it is a social enterprise that is managed by the members who offer labor
as their services to different companies, institutions or entities.

In effect, these members are self-employed individuals, who enter into
commercial agreements with corporations and institutions through the
cooperative that they have duly formed and organized. Through a workers
cooperative, the members are enabled to render work or labor as the
product, service, or business thereof and in return not only do these
individual members earn from their own labor, but they also benefit from
the labor or work of the other members.

This form of business is clearly in keeping with the essence of a
cooperative, which is an organization voluntarily formed by individuals
for their mutual benefit and support, who equitably share in the
capital, participates in the services and become entitled to a fair
share of the benefits, as well as in the other consequences of the
undertaking.

Workers cooperatives have been in existence since the 1930s, initially
formed by hat makers, bakers, and garments workers. At present, workers
cooperatives are globally recognized, with hundreds established in
Europe, North America, South America, the Middle East and India. Among
the more famous ones, in addition to the Mondragon Cooperative in Spain,
are Cheque Dejuener and Acome in France, Kantega in Norway, Suma
Wholefoods in the U.K., Egged-Israel Transport Cooperative Society in
Israel, Indian Coffee Houses in India, and Cooperativa Drapner RL and
Cooperativa Nacional de Ahorro y Prestamo in Venezuela. Italy has about
8,000 existing workers cooperatives. In North America, workers
cooperatives have organized the United Sates Federation of Workers
Cooperatives and the Canadian Workers Cooperatives Federation.

Workers Cooperatives are clearly contemplated in the 1987 Constitution
of the Philippines, which recognizes the rights of workers to form
organizations, associations, or cooperatives for their common benefit.

There is need, however, for the Labor Code of the Philippines to
explicitly recognize the existence of workers cooperatives. In the
already antiquated Labor Code, there is an almost exclusive focus on the
relationships between employers and employees, failing to take into
account situations in which entities and institutions enter into
commercial agreements with laborers who are self-employed workers.

In view of the growing demand for and supply of this form of contractual
relationship, it is necessary to amend certain provisions of the Labor
Code to effectively include, recognize, and protect the rights of these
self-employed laborers who rightfully belong to a workers cooperative.

The revision of the Labor Code should, therefore, include an amendment
of Article 211 under Chapter I, Book V on Labor Relations. The following
State policy should be added: "(h) to promote and foster social
enterprises, such as but not limited to cooperatives and associations
formed by contingent, self-employed or non-regular employees for the
protection of their rights and the promotion of social justice and
development."

This proposed amendment will assure industrial peace because it will
provide for clear guidelines for business-to-business negotiations
between the members of the cooperatives and the corporations, entities
or industries in need of labor services.

Secondly, there should be an additional Article in the Labor Code under
Chapter III, Payment of Wages in Title II, Book III, after Article 106
and 107, addressing the workers cooperative in particular. The amendment
reads as follows: "Whenever a person, partnership, association, or
corporation which, not being an employer contracts with a workers
cooperative, for the performance of any work, task, job or project, the
workers of the said cooperative shall be paid in accordance with the
provisions of this Code. A "workers cooperative" is one organized by
self-employed workers who are at the same time the members and owners of
the enterprise.

The workers cooperative shall not be deemed the employer of its
owner-members but shall be the organization that will ensure that the
minimum standards and benefits as required by law are provided to its
owners-members.

A third amendment is proposed of Article 82 under Chapter I, Hours of
Work in Title I, Book III of the Labor Code to explicitly include
members of workers cooperatives in the provision: Article 82. Coverage
-- The provisions of this Title shall apply to workers in all
establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of
the family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor
in appropriate regulations.

"As used herein, 'workers' refer to those who derive their livelihood
chiefly from the rendition of work or services in exchange for
compensation, which shall include members of a workers cooperative
performing a job, task, or duty for a person, corporation, association,
entity or institution."

The proposed amendments will take cognizance of the evolving nature of
the employer-employee relationship that has to respond to the needs of
global competitiveness and the increasing sophistication and education
of workers in the Philippines.

For those interested in a concrete model of a workers cooperative that
already has 34,000 workers-owners and services some 200 businesses in
the Philippines engaged in agribusiness; merchandising and quick
service; auxiliary, property, and other institutions; manufacturing and
special projects; logistics; and telecommunications, access the website
of Asiapro-Cooperatives, www.asiapro.coop.

For comments, my email address is bernardo.villegas@uap.asia.

Banks Should Lend More – Tetangco

By LEE C. CHIPONGIAN

October 3, 2011, 2:08am

MANILA, Philippines — The central bank thinks the banking sectors'
lending activities are still moderate, that the room for growth is
enormous but then this potential for expanding loan exposures is being
approached rather tentatively.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said
the industry's intermediation or making available funding and finances
to businesses, corporations and individuals could still improve, or grow
higher than the current pace of growth. At the end of July, bank lending
increased 19.1 percent year-on-year, the highest since April 2009.

"Economic growth is helped by the (financing) intermediation done by
banks but there is room for additional lending by banks which would help
the economy to grow more," Tetangco told participants of the mid-year
Philippine investor relations briefing last Friday.

Bank of the Philippine Islands President Aurelio Montinola III, also
head of the Bankers Association of the Philippines, also noted that at a
19-percent growth level, bank lending is about four percent vis-à-vis
the size of the economy as measured by gross domestic product.

Montinola said the loans sector has improved and continues to enhance
lending services. "In the past you have SMEs complaining that they are
not receiving the funding but now they're happy especially since they
are getting low borrowing rates."

Montinola, however, said that banks have much more to do to grow the
business since only 25 percent of the total population has, in one form
or another, some banking transactions such as deposits, loans or tapping
remittance services. Still, he said the loans-to-deposit ratio is on the
low side.

To some extent, he said the BSP has done its job of encouraging lending
growth and the business of banking generally. "We have been aided by
infrastructure related additions to the single borrowers' limit, branch
banking liberalization, a broadened foreign currency investment
capability for thrift banks, and most of all financially inclusive
initiatives in the SME and micro finance sphere," Montinola said.

The BSP has long suspected that a higher bank lending growth may be
restricted by the less risky and costly alternative of parking bank
funds with the central bank through open market instruments such as
special deposit accounts (SDAs).

But according to a continuing BSP study, SDA placements, which as of the
second week of September have reached P1.65 trillion from P1.23 trillion
at the end of 2010, actually do not hinder the growth of bank lending.

The study noted that there are no concrete conclusions yet but the
initial findings show that SDAs continue to be effective in managing
domestic liquidity. It has become one of the BSP's key monetary policy
tools, despite it being a liability, and so far it has been effective in
dealing with liquidity concerns, such as rapid flow of capital into the
country.

Still, BSP is concerned that bank lending are still being affected by
SDAs and they want to eliminate suspicions that SDAs are limiting bank
lending growth. An official source said the aim is to establish the
relationship between SDA placements and bank lending activities.

Saturday, October 1, 2011

UCPB lends Daneco P326M

THURSDAY, 29 SEPTEMBER 2011 20:09 JUN VALLECERA / REPORTER

THE United Coconut Planters Bank has extended a P326-million loan to the
Davao del Norte Electric Cooperative or Daneco whose franchise area on
Mindanao island is host to a number of fast-growing, mainly
tourism-related enterprises with a strong appetite for power.

The loan represents the bank's third such facility for the power sector
and the largest thus far, the two earlier loans having the combined
value of only P110 million or about a third the size of the Daneco
transaction.

The 10-year loan will finance the upgrade of the power distributor's
facilities and double the capacity of two of its 10 substations from 10
mega volts (MVA) to 20 MVA and at the same time, rehabilitate its power
lines, transformers and other distribution facilities and equipment.

Also, the upgrade will benefit the 125,900 households, commercial and
industrial establishments, government offices and public utilities in
Southern Mindanao that get their electricity from Daneco.

All this was made possible because the loan carries a guarantee from the
Local Government Unit Guarantee Corp. or LGUGC, a privately-owned
corporation established by the Bankers Association of the Philippines,
the Development Bank of the Philippines and the Asian Development Bank
which extends guarantee cover on loans for local development.

With the LGUGC cover in place, UCPB is reasonably given assurance the
10-year loan will be paid on the remote likelihood that Daneco is unable
to service its outstanding obligations.

The UCPB loan formed part of LGUGC's regular guarantee program.

The LGUGC also administers the Electric Cooperative-Partial Credit
Guarantee (EC-PCG) program which is a special program put up by the
World Bank meant to encourage the large commercial banks to support
rural electrification by financing the expansion and rehabilitation of
the distribution facilities of electric cooperatives.

The World Bank extended the government of the Philippines a grant worth
$10 million for this purpose.

Daneco is one of the biggest electric cooperatives in the country; it
distributes electricity to 374 barangays in Davao del Norte, Tagum City,
the Island Garden City of Samal and Compostella Valley.

Power usage in these areas has been growing at an average of eight
percent a year on account of the rise in business activities and the
increase in the number of households there.

In particular, the Island Garden City of Samal, with its many fine
white-sand beaches, Dugong sanctuary and numerous other natural
attractions, has been experiencing a surge in investments in
tourism-related infrastructures and in residential property developments.

Davao del Norte and Compostella Valley are the Philippines' leading
producers of banana, a major export crop that generated $250 million in
foreign-exchange earnings for the country last year. The former is also
one of Mindanao's main rice granaries.

Mobile payments competing with cards, checks

By Ted P. Torres (The Philippine Star) Updated September 27, 2011 12:00
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MANILA, Philippines - Mobile payments will make up 15 percent of all
cashless transactions globally, reducing further the use of checks and
plastic money or credit cards.

The World Payments Report 2011 also indicated that mobile payments would
grow globally from 4.6 billion to 15.3 billion transactions between 2010
and 2013 – at a rate of 48.8 percent per year.

The Royal Bank of Scotland, the European Financial Management
Association (EFMA), and Capgemini are the co-authors of the payments report.

The non-profit EFMA encourages research and disseminates knowledge about
decision-making in all areas of finance, and is made up of academics,
practitioners and students from Europe and the rest of the world
interested in the practice of sound financial management techniques.
Operating in 40 countries but headquartered in Paris, France, Capgemini
is a global consulting firm that emphasizes people-centered approaches
through technology.

The World Payments Report 2011 further reported that cards remain the
preferred method of non-cash payments, with a market share of more than
40 percent in most markets. In contrast, check usage around the world
accounted for just 16 percent of all non-cash transactions in 2009, and
it is expected to shrink on an annual basis.

According to the research firm Gartner, in just one year the value of
payments made via mobile devices worldwide has increased 75.9 percent,
or from $48.9 billion in 2010 to $86.1 billion in 2011.

The total value of the mobile payments market is forecast to reach $670
billion by 2015.

In fact, three million impoverished people living in Africa and South
Asia will gain access to a cashless banking experience, with the help of
the United Nations Development Programme (UNDP).

United Kingdom-based technology firm Movirtu's commitment to support the
Business Call to Action (BCtA), a global initiative supported by UNDP
and other international organizations, aims to encourage private sector
efforts to fight poverty.

Instead of sharing a phone number with family members or neighbors,
those provided with a Movirtu cloud phone number will be able to use any
mobile phone to log in with their own unique number to make and receive
individual calls and access critical information and services such as
banking or agriculture support.

Movirtu plans to bring the phone technology to at least 12 markets in
Africa and South Asia by early 2013, giving at least 50 million people
in both continents access to the technology.

In the Philippines, basic mobile phone banking services among the rural
banks is valued at P12 billion ($250 million) in the past five years.
Data from thrift and commercial banks are still unavailable.

Meanwhile, Capgemini said the entry of the US market to the mobile
payment bandwagon would be a critical factor.

Capgemini banking principal Deborah Baxley reported that 2011 is the
breakthrough year of the US market for mobile payments.

Reports show that Google launched its electronic wallet, made available
on the Sprint Nexus S 4G phone. Initially, the Google Wallet app will
let consumers pay by tapping their Citi MasterCard account, but the
service will soon support Visa, Discover and American Express.

Isis, a mobile payment joint venture formed by AT&T,T-Mobile and
Verizon, announced in July that Visa, MasterCard, Discover and American
Express are backing the venture. Isis will get its first big trial
during the first half of 2012 in Salt Lake City. Visa and other
companies are scrambling to get their digital wallets to market and
industry experts expect Apple to announce something soon.

Meanwhile, in a conference held in Nairobi, Kenya led by the MMT Global
Gateway, it was surmised that mobile payment market for goods and
services, excluding contactless NFC transactions and money transfers, is
expected to exceed $300 billion globally by 2013.

The combined market for all types of mobile payments is expected to
reach more than $600-billion globally by 2013.

Mobile money participants agreed that whether it is in the fields, or
buying the most expensive airline ticket, designers cloth or a simple
newspaper on the streets, mobile money presents itself as a the wild
card of economics. The conference participants were mobile money
pioneers of global mobile giants such as Safaricom, Zain, MTN, Orange
and Orascom.

BPI microfinance bank ventures into microinsurance

MOBILE MICROFINANCE bank BPI Globe BanKO will begin offering
microinsurance after partnering with two other subsidiaries of the Bank
of the Philippine Islands.

In a statement, BPI Globe BanKO said it has partnered with BPI Philam
Life Assurance Corp. (BPI-Philam) and BPI-Mitsui Sumimoto Insurance
Corp. (BPI/MS) to offer insurance products that are affordable and
targeted at low-income earning Filipinos.

BPI-Philam, the bancassurance arm of BPI, is an alliance between BPI and
the Philippine American Life and General Insurance Co., the country's
biggest life insurance company.

BPI/MS is a joint venture between BPI and Mitsui Sumimoto Insurance Co.,
a non-life insurance company based in Japan.

BPI Globe BanKO on Friday launched three microinsurance products,
namely, PondoKO, PuhunanKO and PaniguroKO.
PondoKO entitles an individual to life insurance and to a 1% interest
rate per annum on his or her deposit once this reaches P2,000.

In the event of death -- regardless of the cause -- his or her
beneficiary will get five times of the amount of cash in the account.

PuhunanKO provides both life insurance and loan coverage. An individual
who purchases this will entitle his or her beneficiary to P10,000 and to
100% loan coverage in case he or she dies.

PondoKO and PuhunanKO are offered in partnership with BPI-Philam.

PaniguroKO, offered in partnership with BPI/MS, gives the account holder
access to a life insurance policy that costs only P365 for a one-year
coverage.

With PaniguroKO, an account holder is entitled to a P50,000 coverage for
accidental death, P5,000 assistance in case of fire and P2,500
assistance in case of flood, typhoon and earthquake. This insurance can
be purchased through mobile phones, thus doing away the need to fill out
documents.

"Through BanKO's 'banking the unbanked' concept, the market that other
banks have failed to reach will be given options and this is a very good
way of giving back. We at BPI-Philam are hoping that more from the lower
income segment will be empowered and will appreciate the need to save,"
Stephen James Clark, BPI-Philam president and chief executive officer,
was quoted as saying in the statement.

"Getting an insurance used to be expensive or at least that's what a lot
of people think, especially those who are not familiar with it. Through
the BanKO-BPI/MS partnership, we hope more people will realize the value
in securing one," Mr. Takaaki Ueda, BPI/MS president and chief executive
officer, was also quoted as saying in the same statement.

In the same statement, BPI Globe BanKO said it had partnered with the
German Agency for International Cooperation to conduct financial
literacy seminars nationwide. This is in line with the bank's objective
to educate depositors on the importance of insurance. The seminars will
begin in the fourth quarter of this year and will run up to next year.

BPI Globe BanKO is a savings bank that handles the mobile microfinance
operations of BPI, the country's third largest in terms of assets.

It is a shared venture between BPI, Ayala Corp. and Globe Telecom, Inc.
The bank uses Globe's GCash platform to electronically transfer funds to
microfinance institutions and individual borrowers. -- Ann Rozainne R.
Gregorio

Thursday, September 29, 2011

15% interest offered on agriculture loans

TUESDAY, 27 SEPTEMBER 2011 18:38 JENNIFER A. NG / REPORTER

ELIGIBLE small farmers and fishers will now be able to avail themselves
of loans for either agricultural production or microfinance that carry
an annual interest rate of 15 percent.

The Agricultural Credit Policy Council (ACPC) said this is now possible
after it approved the implementation of the depository mode scheme of
the Agro-Industry Modernization Credit and Financing Program-Cooperative
Banks Agri-Lending Program.

According to ACPC Executive Director Jovita M. Corpuz, they were able to
eliminate one layer in the current wholesaler-retailer scheme, which
allowed the attached agency of the Department of Agriculture (DA) to
further lower the interest rates.

"The depository mode scheme offers a pass-on rate to borrowers at a
maximum of 15 percent per annum. This is much lower than the interest
rates offered in our other programs," Corpuz said in a statement.

Under the depository mode scheme, she said eligible cooperative banks
will be given a stable, low-cost funding support, in the form of special
time deposits, which will have a one-year maturity with a maximum
interest of 3 percent per year.

"The earnings from these special time deposits can be used to finance
loans for small farmers and fisherfolk, in addition to the banks'
existing appropriate and incremental agricultural loan portfolio,"
Corpuz said.

Corpuz also said should there be any "material adverse change" in the
financial condition or in the regulatory assessment of the cooperative
bank, the special time deposit is "due and demandable at any time."

As part of the guidelines, participating cooperative banks must also
disburse the proceeds of the special time deposits to eligible
farmers/fisherfolk borrowers within 90 days from the receipt of the deposit.

An initial fund of P400 million has been allocated for the program,
which will be implemented in areas where participating cooperative banks
operate. Rice, corn, fishery and other high-value crops prioritized by
the DA will be financed under the program.

The ACPC is composed of the chiefs of the Departments of Agriculture,
Finance and Budget and Management, the Bangko Sentral ng Pilipinas and
the National Economic and Development Authority.