PHILDEVFINANCE (old news)

Thursday, December 29, 2011

Resilient rural banking system

Published : Thursday, December 29, 2011 00:00 Article Views : 115

The year 2011 has proven a very challenging year by most accounts. The
initial sense of anticipation among members of the rural banking
community for bigger and more profitable transactions at the start of
the year eventually led to a more guarded stance, particularly with
respect to making profits.

The sovereign debt issues hounding countries in the euro area and the
low growth prospects in the United States then, as now, still hang like
the proverbial sword of Damocles over the global economy and make
economic life even among emerging markets like the Philippines more
complicated than usual.

Which is why we at the Rural Bankers Association of the Philippines are
happy to note, and not a tad shy about letting our consumers know that
the industry remains healthy and looks set to deliver more down the line
no matter the knock-on impact of external events on local lending.

Consider, for example, that we are now better able to reach previously
unserved or underserved areas of the country as a direct result of
regulatory easing on branching activities. Also as a result, the number
of rural bank branches and other offices now total 1,997 at end-March
this year with three more added to our membership base. This essentially
means greater scope for members to engage in micro-lending activities
and reach out to a more expanded client base.

While 38.5 percent of our members are still predominantly located in the
National Capital Region, our presence in Mindanao happens to be second
largest with 560 rural bank offices established and compares favorably
against 998 rural bank offices in the NCR. Supplementing this network of
branches are our automated teller machines to which 68 was added to the
year ago number of only 119, or a total of 187 units.

Add to this the 55 rural banks that provide so-called electronic wallet
services plus two of our members that offer mobile phone banking.
According to the Bangko Sentral ng Pilipinas itself, the use of mobile
money platforms is expected to post significant expansion in the future
as major players in the industry and the telecommunication companies
have been working together to develop the system to facilitate more
rural banking transactions.

Micro lending has become mainstream, with 287 of our members said to be
microfinance-engaged and six more as microfinance-oriented banks. This
is part of what we mean when we say we are practical partners in the
government's desire to have a more inclusive financial system, one in
which clients in even remote places of the country have effective access
to services offered by our colleagues in the countryside.

We also note with pride that on the aggregate the rural banking industry
posted profits of P3 billion, which was one percent, or P29 million
lower than a year ago and a mirror of the challenging times we are in.
But as had been said, we have proven resilient. Total operating income
at end-March rose 7.3 percent, or by P1.3 billion to P19 billion. Of
that amount, 79.4 percent represented net interest income while 20.6
percent represented non-interest income. According to BSP data, net
interest income expanded in the manner it did due to growth in loan
portfolio and financial assets other than loans.

Rural bank assets grew by 5.8 percent or by P9 billion to P165.8 billion
from a year ago. Loans also grew by 5.3 percent, or by P5.3 billion to
P105.8 billion, in part because of the significant recovery of the
agriculture sector in the first quarter and the promotion of financial
inclusion in the countryside. The agriculture sector posted a 14.5
percent growth in the first quarter from only 2.8 percent last year.

Deposits also grew 4.7 percent to P113.5 billion versus only P108.4
billion last year and aggregate capital grew by another 11 percent or by
P2.9 billion to P29.2 billion As a result, the aggregate capital
adequacy ratio stood at 18.9 percent or higher than CAR of only 18.2
percent at end-2010. Regulations require banks to recapitalize whenever
the ratio falls below 10 percent.

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

Wednesday, December 28, 2011

Bank and NGO synergy encouraged

By LEE C. CHIPONGIAN

December 28, 2011, 3:24am

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said there
are advantages to having related non-governmental organizations (NGOs)
or foundations that are also engaged in microfinance services and the
BSP still encourage NGOs to become regulated financial institutions (RFIs).

Sources, citing a BSP study on the issue of NGOs/foundations that have
evolved to become RFIs, said despite the recent issuance of a
restricting circular last June the central bank is still supportive of
NGOs with microfinance operations to becoming RFIs in order to gain
access to capital.

The circular, said the same sources, only allowed the BSP to check the
risks of the relationship of a bank to their related NGO/foundation
microfinance operations such as the weakness in board and management due
to interlocking directorship issues, control of the microfinance loan
portfolio and how capital is being utilized.

The issue on DOSRI (directors, officers, stockholders and related
interests) in particular, is one of the most significant risks addressed
by the new circular, or Circular No. 725. Specifically, the BSP now
applies DOSRI caps to the loans these NGOs/foundations operating as an
RFI. Presently the BSP monitors 18 microfinance-oriented banks operating
as RFIs.

These NGOs/foundations, while classified as non-stock and non-profit
organizations, offers financial assistance to its customers.

The BSP's Manual of Regulations for Banks (MORB) defines "related
interest" as any "corporation, association or firm which a director or
officer of the bank or his spouse is also a director or officer of such
corporation …"

Based on this definition, the BSP deemed it appropriate to impose the
DOSRI limit to related NGOs/foundations. All loans, other credit
accommodations and guarantees to such related NGO/foundation will be
included in determining a related bank's compliance with DOSRI caps,
which is 10 percent and five percent for unsecured limits, and aggregate
20 percent limit on loans.

Of the 18 RFIs, 13 are operating as rural banks, the rest as thrift banks.

The BSP have had to issue the circular since based on studies and
monitoring, such close relationship between a bank and its
NGO/foundation may be subject to abuse that could increase operational,
governance and reputational risks, brought about by common board
memberships, shared resources and loan transfers, among others.

"The new regulations and governance standards aim to mitigate risks
resulting from the unique relationship and increased volume of
transactions entered into by banks and their related NGOs/foundations,"
said the BSP.

The new circular did not only redefined what related microfinance
NGOs/foundations mean, but also prohibited bank officers from holding
any positions that may cause them to be involved in the daily
microfinance operations of a related NGOs/foundations

Tuesday, December 27, 2011

Bancnet’s ATM switch service gaining clients

Bancnet's ATM switch service gaining clients

INTERBANK network provider Bancnet, Inc. expects a 10-15% increase in
transactions volumes after small banks expressed their interest in the
company's ATM switch outsourcing service.

"ISLA Bank, Inc., Valiant Rural Bank, Inc., D' Asian Hills Bank, Inc.,
Central Equity Rural Bank, Inc., Rural Bank of Canlubang Planters, Inc.
have agreed to tap Bancnet's ATM (automated teller machine) switch
outsourcing services," said Aristeo P. Zafra, Jr., Bancnet executive
vice-president and chief operating officer, in a telephone interview
last week.

Bancnet's monthly average volume of switched ATM transactions reaches
around 30 million, Mr. Zafra said.

He said nine small banks had tapped Bancnet's ATM switch outsourcing
service: BPI Globe BanKO, Wealth Development Bank Corp., Card Bank,
Inc., Producers Savings Bank Corp., Finman Rural Bank, Inc. and
Enterprise Bank, Inc. are current users while Quezon Capital Rural Bank,
Inc. Philippine Postal Savings Bank, Inc. and Tong Yang Savings Bank,
Inc. are still in the testing process.

Another six institutions are reviewing the service, Mr. Zafra claimed.

"Our switch outsourcing service include a card management system, which
enables banks to issue ATM cards," he added.

"It also includes ATM monitoring services to check the status of the ATM
machine whether its online or offline."

Tapping Bancnet's ATM switch system, Mr. Zafra said, will allow small
banks to focus on core businesses such as deposit-taking and lending.

"It will help banks to expand and improve on the services they provide
to their clients," he added.

Using the Bancnet platform means banks do not need to purchase and
install their own ATM switch that costs about $1 million, he said.

Mr. Zafra declined to state specific amounts when asked how much it
would cost to access Bancnet's services, only saying that banks would be
charged either on a per transaction or an annual fee basis.

Bancnet's settlement figures, he said, will continue to increase as the
firm continues to explore functionalities that can be extended across
networks.

"We also plan to provide a new service for our member banks, which is
the cash loading or cash replenishing service, but we are still in the
process of discussing this with banks.

"We target to rollout the service in the first quarter."

The cost, again will also be either on a per transaction or an annual
fee basis.

Bancnet has 89 members with more 6,000 ATM units nationwide and over
16,000 point-of-sale terminals.

Credit Bureau launch hit by delays

THE FULL operation of the central credit information bureau has been
pushed anew to 2013.

The Credit Information Corp. (CIC), which Republic Act (RA) No. 9510 or
the Credit Information System Act of 2008 set up to oversee a credit
information system, has been beset by delays.

"Our original target to have the CIC operational by December 2012 has
been moved by a year or to December 2013," Baltazar N. Endriga, CIC
president, said in a phone interview last Friday.

"When we (the CIC's board of directors) started to draw the timeline of
our operations, we realized that our target of December 2012 was not
feasible because we have been delayed by various issues. We settled the
issue regarding our legal identity only last month," he said.

The CIC, as he explained, needed to register with the Securities and
Exchange Commission (SEC) and pay the P1 million registration fee in
order to seal its legal identity as a corporation. It could not do so
right away because as a government-owned and -controlled corporation, it
needed to get the go-ahead of the Governance Commission for GOCCs (GCG),
which oversees state firms.

The government owns 60% of the CIC, and the private sector, 40%.

The Office of the President completed the composition of the GCG only in
November, five months after RA 10149 or the GOCC Governance Act of 2011
was passed.

"Cesar [L.] Villanueva, chairman of the GCG, sent us a letter dated Nov.
17 stating the CIC no longer needed to pay the SEC's registration fee as
the law creating the CIC already gave us the legal identity to start
operations," Mr. Endriga said.

"We can now proceed to operate as a regular corporation. We should just
submit a copy of the Credit Information System Act of 2008, which will
serve as our articles of incorporation, and the GCG's opinion to SEC,"
he added.

As a state firm, however, the CIC has to abide by RA No. 9184 or the
Government Procurement Reform Act, Mr. Endriga said.

"The service provider that will put up the database will be outsourced.

Following the law, there are publication requirements, bidding
requirements and request for proposals we should send to our prospective
service providers," he said.

"Doing the request for proposals will take four months and the
evaluation of bids will take another eight months. That is already a
year in our timetable."

Five service providers have already offered their services to the CIC,
but Mr. Endriga said the CIC still needs to send them the request for
proposals.

Hiring of employees, meanwhile, cannot proceed as yet because the CIC
still needs to publish its organizational structure in the newspapers as
a required by SEC.

"We also started to look for an office space and we are after an office
located in Fort Bonifacio, Global City in Taguig City," Mr. Endriga said.

As envisioned by RA 9510, a central credit information system will
"directly address the need for reliable credit information concerning
the credit standing and track record of borrowers."

Sought for comment, Rural Bankers Association of the Philippines (RBAP)
President Ian Eric S. Pama, in a phone interview, yesterday said:
"having a central credit bureau in 2013 will benefit all financial
institutions, especially the small banks" as they will have access to
the credit profiles of various clients and thereby make "wise decisions"
on who to lend to.

RBAP at present is using the credit information gathered by the Bankers
Association of the Philippines (BAP), which is made up of the credit
profiles of big banks' clients.

All banks, quasi-banks, their subsidiaries and affiliates, life
insurance companies, credit card companies and other entities that
provide credit facilities are required to submit data to the CIC, making
its database the most comprehensive in the country.

The CIC's private sector investors are the BAP, RBAP, Chamber of Thrift
Banks, Credit Card Association of the Philippines, Philippine
Cooperative Center and the Philippine Credit Reporting Alliance, Inc.

Mobile phones not seen to replace wallets anytime soon

DON'T THROW your wallet away yet.

IT IS EXPECTED to take another two to four years for mobile payment
modes to catch on. -- BW File photo

Many big-name retailers from Gap to Toys R Us are partnering with banks,
payment processors and Google to let shoppers tap their mobile phones
instead of swiping their credit cards to pay for goods.

But the new mode of payment is not expected to take off in earnest for
at least another couple of years.

A KPMG study released on Wednesday last week found only 23% of consumers
were willing to use their mobile phone in place of other forms of
payment, with 30% of younger adults much more willing to do so.

And that means that all those hopes of retailers becoming more efficient
at checkout and banks finding another revenue stream won't be a reality
soon.

Shoppers in cities such as New York, San Francisco and Chicago are
warming up to the idea of paying by phone, but it will still take
another two to four years for widespread adoption, potential
participants in the mobile payment industry said.

One major obstacle to universal adoption of the new payment method is
doubt among consumers and some companies that paying with one's
smartphone is secure and easier than using a credit or debit card or cash.

Jack Koenig, a 52-year-old Broadway actor and New York resident, said he
would wait for a while before he tested it.

"I am in no rush. What is the advantage per se? Is it really that much
more convenient for me? I don't really think so," Mr. Koenig said.

"If you lose your phone, you will be screwed."

Richard Mader, head of the technology division of trade group National
Retail Federation, said, "Multiple things must come together.

Mostly, consumers need to have the right amount of knowledge and
education about the technology, and retailers must be able to accept
mobile payments."

Others agreed.

"Just the act of paying with your phone is a new thing for most of us.

We're also working hard to educate people about why mobile payments
represent the future of commerce," said Marc Freed-Finnegan Sr.,
business product manager of Google Wallet.

Still, it is hard to ignore the small but growing pay-by-phone market.

Research firm Aite Group expects the pay-by-phone transactions to total
$2.1 billion in 2012 and $22.6 billion by 2015.

While the long-term potential seems huge, near-term hurdles related to
security concerns, availability of contactless payment machines and
installation costs for retailers are working against the initiative.

Currently only about 500,000 NFC readers (contactless payment machines)
have been installed at retailers' point-of-sale locations, or checkout
registers, in the United States.

"We feel that it will take time," said David Marcus, vice president of
mobile at eBay's PayPal unit. "We don't want to…solely rely on NFC to go
offline in a big way."

PayPal is watching developments in mobile payments but also getting
ready to roll out a "wallet in the cloud" initiative that lets shoppers
pay using their computers, cell phones and cards that give access to
their coupons, or by simply typing their mobile number and pin at
checkout counters.

Amid other challenges, 71% of 970 companies surveyed by KPMG said they
believed they must overcome security concerns to succeed in mobile payments.

And changing that will take time.

"2012 will be about a beta and expanding that beta test. It will take
some time for these this to become mainstream," said Thomas Kunz, senior
vice president at PNC Financial.

Mr. Kunz oversees the Pittsburgh-based bank's payments and e-business.

"There are 11 million merchants in the United States, and nobody's being
paid to make this change," Mr. Kunz said.

"Using a phone instead of a card is not such a big deal, at least right
now."

So far, US wireless operators Verizon Wireless and T-Mobile USA have
joined with Discover to form a joint venture targeting mobile payments.

Wireless competitor Sprint meanwhile has joined with a host of companies
in a another joint venture.

In it, Google will supply Google Wallet software that today can hold
MasterCards issued by Citi, and FirstData will provide infrastructure
for securely delivering payment credentials to Google Wallet.

Google has also signed agreements with Visa, American Express and
Discover, and hopes to include their cards in Google Wallet, Mr.
Freed-Finnegan said in an interview.

Starbucks, which has had a lot of success with its own mobile apps due
to the overwhelming response from its tech-savvy and relatively
well-heeled consumers, is also optimistic about the potential of mobile
payments.

"It will be a big deal. It is just a matter of time," said Adam Brotman,
senior vice-president and general manager of Starbucks Digital Ventures.

Despite the lack of immediate rewards, some store chains are currently
testing the payment method, and more merchants are expected to join the
pay-by-phone bandwagon in 2012.

American Eagle Outfitters (AEO), Container Store, Foot Locker, Guess,
Jamba Juice, Macy's, OfficeMax, Toys R Us and Gap are among the chains
that let shoppers use "Google Wallet."

They let shoppers pay for goods, redeem coupons and earn rewards points,
all with a single tap of their phone.

"They love it. We did a demo event at our Times Square store in which
customers got to use loaner phones to try out the technology," said Jani
Strand, a spokeswoman for teen apparel chain American Eagle.

"It's still very early, but the goal is to make the AEO shopping
experience as fun and convenient as possible," Ms. Strand added.

"Our customers are rarely without their smartphones, so any engagement
that connects with them through these devices tends to be effective."

Currently, about 200 Toys R Us and Babies R Us stores let shoppers pay
using their smartphones, Toys R Us spokeswoman Katie Reczek said.

"We will continue to evaluate the program to make a determination about
expanding its offering to additional locations," Ms. Reczek added.

In addition to the playing the convenience card, many such as MasterCard
and Google said the pay-by-phone method is actually safer than regular
credit card transactions.

Purchases by phone are safer because of the added software limits in
place to keep people from accessing your data improperly, whereas they
can just swipe a number off a debit card illicitly, MasterCard executive
Mario Shiliashki said.

More addictive than cigarettes

"Google Wallet goes far, far beyond the protections that you have in
place for your wallet today. Google Wallet is a much more secure
platform -- it's truly a wallet you can lock," Google's Marc
Freed-Finnegan said.

Also, consumers are more likely to carry their phone than anything else,
because it has become a key social tether.

"You're more likely to leave your home without your wallet or your
cigarettes than you are your phone," Ms. Shiliashki said.

"And I mention cigarettes because the phone has become more addictive
than the most addictive substance out there," she stressed. -- Reuters

Friday, December 23, 2011

2 rural banks get BSP green light on microinsurance, 50 others in line

December 23, 2011 7:06pm

Bangko Mabuhay in Tanza, Cavite and Mallig Plains Rural Bank in Isabela
province are the first two rural banks the Bangko Sentral ng Pilipinas
(BSP) has allowed to engage in microinsurance services. Some 50 other
rural banks are interested in venturing into financial relief and risk
protection for the low-income sector.

"The recent approval authorizes the banks to present, market and sell
microinsurance products in their branches and offices as provided under
Circular 683 (2010)," the BSP said in a statement Thursday.

Bangko Mabuhay and Mallig Plains Rural Bank committed to limit the
amount of premiums, contributions, fees and charges on their
microinsurance products. The amounts cannot exceed five percent of the
current daily minimum wage, or around P20. The ceiling on guaranteed
benefits must not to exceed 500 times the current daily minimum wage, or
around PhP 210,000.

"The approval validates the potential of rural banks, with a network of
over 2,700 offices nationwide, subject to certain prudential rules and
regulations, to serve as distribution points for authorized
microinsurance products offered by licensed providers," the BSP pointed out.

The BSP has given initial clearance for the 50 other rural banks waiting
in the wings "to apply for the necessary provisional license from the
Insurance Commission."

"Once this provisional license is obtained, the BSP will grant the
appropriate authorization for these banks to sell microinsurance
products during the license validity of one year," the BSP said.

The rural banks seeking microinsurance licenses must amend their
articles of incorporation to include microinsurance as a secondary
activity. "The approved amended AOI must be submitted to the IC on or
before 30 June 2012, otherwise the IC shall no longer renew the
license," the BSP added. — ELR, GMA News

Thursday, December 22, 2011

Noy leads groundbreaking for government housing project in Pasay

By Aurea Calica (The Philippine Star) Updated December 22, 2011 12:00 AM
Comments (0)

MANILA, Philippines - President Aquino led yesterday the groundbreaking
ceremony for the construction of socialized housing units in Pasay City
as part of his government's commitment to provide better shelters for
the informal settlers all over the country.

Aquino had been calling on the local government units to once and for
all relocate informal settlers especially those in the danger areas.

Interior and Local Government Secretary Jesse Robredo, who was with the
President, said 19,282 families in danger areas of Pasay (4,200), Manila
(9,082) and Quezon City (6,000) would benefit from the program with P10
billion allocation from the national government.

The President called on the beneficiaries of the "socialized housing
units" that the government had opened doors for them to have better
homes and they must take the opportunity to improve their lives rather
than go back to their previous situation.

He cited the devastation caused by "Sendong" in Cagayan de Oro, Iligan
and Dumaguete cities as well as other areas in the country and which
affected mostly those who were living in dangerous areas.

The President thanked Pasay City Mayor Antonino Calixto and the other
local officials for working to relocate the informal settlers as it
ranked third among those with the highest number of informal settlers in
the National Capital Region.

He said they inherited a problem that should have been solved since 1994.

Robredo said the pilot sites were selected by an inter-agency technical
working group on informal settlers organized by the President.

The LGUs were tasked to identify the beneficiaries, the proposed sites
for their on-site or in-city housing and financial capacity to pay the
monthly amortization.

Earlier, the Department of Environment and Natural Resources reiterated
its call for local government officials to give serious attention to the
geohazard maps that had been distributed to some 1,600 municipalities
and cities, and about 4,000 barangays nationwide.

Among other things, geohazard maps contain information as to the level
of susceptibility of areas to flooding and landslide, including areas
that could possibly be used as relocation or evacuation sites, in case
of calamities.

Under Republic Act No. 10121 or the Disaster Risk Reduction and
Management, LGUs are tasked to evacuate residents in flood- and
landslide-prone areas and relocate them to safe areas in times of
impending typhoon and other weather disturbances that could bring heavy
rains.

The law also requires all LGUs to have its Local Disaster Risk Reduction
and Management (LDRRM) systems and have a greater responsibility in
building the disaster preparedness of communities and institute disaster
risk reduction within their jurisdictions.

When he visited Dumaguete City on Tuesday, Aquino said the government
was ready to help address the needs of typhoon hit areas. The President
also went to Cagayan de Oro and Iligan cities.

The President told the local officials to present their various requests
in a formal letter so that the release of the funds can be "fast tracked."

Wednesday, December 21, 2011

When the government gives away cash

PROVIDING SAFETY nets to the poor has been a policy embraced by the
national government to improve the living standards of the poorest
Filipinos.

The government's conditional cash transfer (CCT) program borrows from
microeconomics, welfare economics, and behavioral economics — through a
subsidy or financial aid given to extremely poor families in the
country, it aims to alleviate poverty and improve the economy.

"Government subsidy is important in alleviating poverty because it
bridges the gap between the needs of the poor and the capability of the
poor to acquire them," Cid L. Terosa, University of Asia and the Pacific
senior economist, said in an e-mail.

Based on the latest poverty data from the National Statistical
Coordination Board, poverty incidence in the country slid to 20.9% in
2009 from 21.1% in 2006. Two families per 1,000 were lifted out of
poverty between those periods.

Data showed that a Filipino family of five should have at least P4,869
in monthly income to meet their basic food needs and P7,017 to stay out
of poverty. By estimates, about 45% of Filipinos are vulnerable to
poverty if confronted by shocks such as health problems and deaths, loss
of employment, natural disasters and increasing food prices.

The CCT program involves providing money to extremely poor households to
keep kids in school and to make sure children and mothers have healthcare.

"Conditional cash transfer is a social safety net that can help the poor
jumpstart their way to self-sufficiency and economic independence," Mr.
Terosa said. However, this program should not be a long-term aid for the
poor, he said.

"As I mentioned, CCT is supposed to provide the momentum that the poor
need to become economically self-sufficient," he added.

According to a Policy Brief produced by the Senate Economic Planning
Office of the Senate of the Philippines, cash assistance is seen as more
efficient than in-kind assistance since it gives beneficiary families
the flexibility to allocate resources according to their needs and
circumstances.

"Cross country studies on CCTs showed that they have impacted the
beneficiary households' aggregate consumption not only in terms of level
but also its composition, with beneficiaries spending a greater share of
total consumption expenditure on food," the paper said.

This project is spearheaded by the Department of Social Welfare and
Development. A P500 subsidy per month is given to beneficiaries for
health and nutrition expenses and P300 a month per child (not exceeding
three children per household) for educational expenses.

University of the Philippines economist Solita C. Monsod said "the CCT
would bring economic benefits in the long run but not now."

"Right now, what the families are receiving is not enough to support
their needs and to take them out of poverty," Ms. Monsod said.

However, this cash transfer program of the government is not a one-way
street. Recipients must meet the following conditions set by the government:

1. Pregnant women must get prenatal care starting from the first
trimester, must have childbirth attended by skilled/trained
professional, and get postnatal care thereafter;

2. Parents/guardians must attend family planning sessions/mother's
class, parent-effectiveness service and others;

3. Children 0-5 years of age must get regular preventive health
check-ups and vaccines;

4. Children 3-5 years of age must attend a day care program/pre-school;

5. Children 6-14 years of age must be enrolled in schools and attend at
least 85% of the time; and

6. Children 6-14 years of age must receive deworming pills twice a year.

Traditionally, government subsidies are not tied to conditions as
mentioned above as they convey the message that beneficiary households
cannot be trusted to spend cash transfers.

"The idea is to transfer cash to the poor 'on condition' that the poor
will commit to empower themselves and help bring future generations of
poor families out of poverty. That conditionality makes this new
generation of social programs an instrument for longer-term human
capital investments as well as short-term social assistance," the Senate
publication read.

The proposed CCT budget for next year is more than 70% higher than the
current P23 billion. The CCT fund has the largest share in the
Department of Social Welfare Development's budget of P49 billion. —
Daniel Anne Nepomuceno-Rodriguez

Increased investments seen

THE BOARD OF INVESTMENTS (BoI) expects pledges to rise by 10% to nearly
P400 billion next year, driven by both local and foreign businesses
despite a sluggish global economy.

"The BoI ... is looking at P350 billion for this year and we are looking
to increase that by at least 10%. Our registration in BoI should
therefore amount to about P380-390 billion toward the end of [2012],"
said Cristino L. Panlilio, Trade undersecretary for investment promotions.

Drivers for next year's growth will come from sectors such as tourism,
energy, agribusiness, high-impact strategic projects, and ship building,
Mr. Panlilio told BusinessWorld, adding that most projects also expected
to be export-oriented.

The bulk of foreign direct investments (FDI), he said, will still come
from traditional trade partners such as Japan, South Korea, China, the
United States, the United Kingdom, and European Union members such as
Germany and Spain.

"We are very happy that in 2011, in spite of the Middle East crisis and
the western economic [downturn], our investment registration hit an
all-time high. That will set the tone for the coming year," Mr. Panlilio
claimed.

Aggregate investments hit P337 billion as of October, a 42.31% rise from
a year earlier, he noted. Last year's result of P302.1 billion,
meanwhile, was surpassed in August.
"We are not worried by the Western crisis, because what we're trying to
attract are companies looking for a low-cost destination. We also have
to consider that the world economy is still projected to grow by 4%,"
Mr. Panlilio said, referring to an International Monetary Fund forecast.
"We are also striving to become a replacement destination for displaced
companies in Japan and Thailand," he said.
"We've already identified a dozen Japanese companies in Thailand that
also have operations here in the Philippines, so it's just a matter of
expanding operations here."
Apart from setting an overall investment pledges goal for next year, the
BoI is also attempting to set separate targets for domestic and foreign
sources.
Ideally, said Mr. Panlilio, there should be an even "50-50" share.
Currently, local businesses take up almost three-quarters of investments
approved by the agency, he noted.
"We're hoping the FDI component will grow faster, because local
investments will not be enough to reduce our poverty levels," Mr.
Panlilio said.
"We have to hit around $3.5 billion in FDI and over P200 billion in
local investments. Combined, that should come out at around P400 billion."

RCBC wants microfinance subsidiaries merged by April

RIZAL Commercial Banking Corp. (RCBC) targets to integrate the
operations of its microfinance subsidiaries by April next year, a bank
official said.

"We target to integrate the operations of J.P. Laurel Bank and Rizal
Microbank by April 2012. We want the two banks to operate as one bank by
then," said John G. Deveras, RCBC executive vice- president and head of
strategic initiatives, in a phone interview last week.

In September, RCBC's board of directors approved the merger of Pres.
Jose P. Laurel Rural Bank, Inc. (J.P. Laurel Bank) and Rizal Microbank,
formerly the Merchants Savings & Loan Association, Inc.
Rizal Microbank, a thrift bank, will be the surviving entity.

Mr. Deveras, who also sits as the president of Rizal Microbank and
Chairman of J.P. Laurel Rural Bank, said RCBC submitted its application
to merge the two banks to both the Philippine Deposit Insurance Corp.
and Bangko Sentral ng Pilipinas two weeks ago.

He said there will be no changes in the two banks' main thrust once they
are merged.

"The two banks will continue to offer microfinance lending to small and
medium businesses, only this time, this will be under one entity that
will have the flexibility of a thrift bank and the expertise of a rural
bank in terms of microfinance," he said.

RCBC ventured into microfinance -- the first large bank to do so -- in
July 2009 after buying J. P. Laurel Bank based in Batangas in February
2009 and Rizal Microbank, which had branches in southern Mindanao, in
May 2008.

"Integration of the two banks' integration is ongoing, the two banks are
currently being run by one management team, headed by me," Mr. Deveras said.

"The way the two banks handle their lending activities and their core
banking systems are the same so there is really nothing to change," he said.

Once RCBC obtains the necessary regulatory approvals, Mr. Deveras will
resign from his post in Rizal Microbank. RCBC Senior Vice-President and
Head for Microfinance Ma. Lourdes Jocelyn S. Pineda will sit as the new
president of the new bank.

Regarding the banks' employees, he said: "all the staff and management
of J.P. Laurel will be separated and rehired by Rizal Microbank the next
day."

The merged bank will have P1.2 billion in assets.

Ms. Pineda earlier said that she targets to have 27 to 30 branches by 2014.

Currently, J.P. Laurel Bank has 10 branches in southern Luzon while
Rizal Microbank has eight branches in southern Mindanao.

RCBC shares closed unchanged at P30.20 apiece yesterday. -- Ann Rozainne
R. Gregorio

Sunday, December 18, 2011

8% growth for Phl possible - UK think-tank

By Lawrence Agcaoili (The Philippine Star) Updated December 18, 2011
12:00 AM Comments (0)

MANILA, Philippines - London-based think-tank Capital Economics Ltd said
it is possible for the country to achieve a gross domestic product (GDP)
growth rate of eight percent through improved infrastructure and
business environment.

Gareth Leather, Asian economist from Capital Economics, said in a report
that a growth rate of eight percent could be attainable but a six
percent expansion is more likely.

He said the Philippines is unlikely to achieve the growth rates seen in
neighboring economies at a similar stage of development while its
business environment remains so weak.

"The government has ambitions to boost the annual rate of growth to
eight percent, but this will only happen if it is able to push ahead
with plans to improve infrastructure and the business environment,"
Leather stressed.

He pointed out that the Philippines has slipped from being one of the
richest countries in Asia in the 1960s to being one of the poorest today.

The think-tank said GDP growth in the Philippines averaged just 2.8
percent per year in the 1990s compared to 6.7 percent in Asia ex-Japan
over the same period.

Although growth picked up in the 2000s to an annual average of 4.4
percent, Leather said this was still around half the rate that most
other economies in the region achieved when they were at the same level
of development.

"What's more, rapid population growth in the Philippines means that its
relative performance on a GDP per head basis has been even worse. In the
1960s the Philippines was one of the richest countries in Asia."

He added that the GDP per capita of the country fell to 40 percent of
the emerging Asia average in 1980 and just 15 percent in 2010.

"The Philippines' low level of GDP per head means there is plenty of
room for catch-up growth. In addition, the Philippines' geographic
position in the fastest growing region of the world economy and
proximity to some of the busiest shipping routes in the world are big
plus factors. As a result, growth could potentially accelerate
significantly," he said.

Capital Economics said the main cause of the weak performance of the
Philippines has been low investment.

"We believe that the key reason for the Philippines' under-performance
has been weak investment. Investment boosts productive potential, which
is why there is a strong relationship between investment-to-GDP ratios
and growth rates in subsequent years for many Asian economies," it added.

It explained that demographic factors should push the savings rate
higher over the next decade, which should in turn support stronger
investment and faster economic growth.

"There is no universal optimal rate of investment, but in a poor country
with a low capital stock, there is plenty of potential to boost growth
through investment in new machinery and infrastructure," Leather said.

At the moment, the investment ratio in the Philippines of around 20
percent is similar to that in Japan and some euro-zone countries, and
well below the levels seen in other fast-growing Asian economies.

Capital Economics said the poor business environment in the Philippines
has also undermined the country's export sector. Exports were the
equivalent to just 32 percent of GDP in the Philippines.

Saturday, December 17, 2011

PNB, Allied bank merger finalized

Respective boards approve amended plan

By JAMES A. LOYOLA

December 16, 2011, 11:52pm

MANILA, Philippines — The amended plan of merger of Philippine National
Bank and Allied Banking Corporation has been approved by their
respective board of directors.

In disclosures to the Philippine Stock Exchange, the banks said ING Bank
NV, financial adviser to the Lucio Tan Group of companies, have prepared
a proposal recommending a share swap ratio between PNB and Allied Bank
to approximate the relative contribution of both banks to the merger bank.

Under the amended plan, 130 PNB common shares will be issued for each
Allied Bank common share while 22.763 PNB common shares will be
exchanged for each Allied Bank preferred share.

They said the exchange ratio for the Allied Bank preferred shares was
calculated based on the conversion ratio of these into Allied Bank
common shares. Based on the book value of the common shares, each
preferred share is equivalent to 0.1751 common share.

The PNB common shares to be issued will be taken from PNB's authorized
but unissued capital stock at a price of P70.00 per share and listed
with the PSE. PNB said it will be issuing a total of 423.96 million new
common shares for the merger.

Last 2008, the approved exchange ratio was 140 PNB shares for each
Allied Bank common share and 30.73 PNB shares for each Allied Bank
preferred share with the issue price at P55.00 per PNB common share.

The effectivity of the merger will be subject to the approval of the
Bangko Sentral ng Pilipinas, the Securities and Exchange Commission and
the Philippine Deposit and Insurance Corporation.

Once merged, PNB will be the surviving bank while Allied Bank will cease
to exist.

The PNB was established as a government-owned banking institution on
July 22, 1916.

The privatization of the bank started when 30 percent of its outstanding
stocks was offered to the public and its stocks were listed in the stock
exchange in 1989.

With its successful exit from the government's rehabilitation program
and the strong income performance, PNB has demonstrated its ability to
sustain its heightened competitiveness based on the three tenets of
reducing non performing assets, strengthening core businesses and
increasing profitability.

The bank remains as one of the largest banks in the country with a wide
array of competitive banking products to answer for the diverse needs of
its huge clientele including more than 2 million depositors.

PNB maintains its leadership in the overseas remittance business with
remittance centers in the United States, Canada, England, Spain, the
Netherlands, France, Germany, Austria, Italy, Hong Kong, Japan,
Singapore, Malaysia and the Middle East countries.

PNB, Allied Bank update share swap terms

PHILIPPINE National Bank (PNB) and Allied Banking Corp. have updated
their merger plan, as the union of the two Lucio Tan banks heads for
completion.
In separate disclosures to the stock exchange yesterday, PNB and Allied
Bank said their respective board of directors held a meeting on Friday
to update the number of shares that PNB will swap for each Allied Bank
common and preferred share.

According the disclosures, PNB will exchange 130 common shares for each
Allied Bank common share and 22.763 common shares for each Allied Bank
preferred share.

"On April 30, 2008, the board had previously approved exchange ratios of
140 PNB common shares for each Allied Bank common share and 30.73 PNB
common share for each Allied Bank preferred share," PNB's disclosure read.

PNB said ING Bank N.V., financial adviser of the Lucio C. Tan Group of
Companies, proposed to update the share swap ratio based on PNB and
Allied Bank's contribution to the merged bank.

A share swap has been decided on as the strategy to effect the merger,
which was announced in 2008.

PNB, the country's sixth largest in terms of assets as of the third
quarter, will be the surviving entity once the merger is completed, very
possibly next year. It will also become the country's fifth largest in
terms of assets.

The PNB board also approved yesterday to reprice a common share to P70
each from the P55 apiece approved in 2008.

"The issuance by PNB of a total of 423.96 million common shares from its
authorized but unissued capital stock to the stockholders of Allied Bank
[is] subject to the approval of the Securities and Exchange Commission
of its merger application," PNB said.

The new shares, added Allied Bank in its disclosure, will be listed on
the Philippine Stock Exchange.

The two banks said the changes to the merger plan are still subject to
the approval of their respective stockholders.

The merger itself will need the approval of the Bangko Sentral ng
Pilipinas, Securities and Exchange Commission and the Philippine Deposit
and Insurance Corp.

PNB and Allied Bank's merger has started to gather steam after many
delays. Allied Bank this year executed a voting trust agreement with
Oceanic Holding (BVI) Ltd. -- which owns San Francisco-based Oceanic
Bank -- and Walter J. Mix III, the designated trustee.

Allied Bank holds a 27.8% stake in Oceanic Holding.

The agreement, approved by the US Federal Reserve Board in November,
placed the entire stake of Oceanic Holding in a trust managed by Mr.
Mix, who will oversee the sale of the stake to third parties.

The voting trust agreement will allow Allied Bank to sell its indirect
stake in Oceanic Bank, which it needs to do before its merger with PNB
can proceed. It had tried to do so in the past but could not find any
buyers.

Wednesday, December 14, 2011

Philippines needs to play catch-up -- IMF

THE PHILIPPINES -- seen as a laggard compared with its neighbors --
needs sustained macroeconomic stability, additional revenues and
increased government spending if it is to equal emerging market peers.

Periods of growth were not sustained given the absence of strong and
persistent economic reforms, according to an International Monetary Fund
(IMF) Working Paper titled "The Determinants of Economic Growth in the
Philippines: A New Look."

"To catch up with its East Asian counterparts, the Philippines will need
to maintain macroeconomic stability, expand its fiscal space and
redirect public spending to agriculture, infrastructure, and research
and development," wrote author Willa Boots J. Tolo, who was a researcher
at the IMF Manila office and now an officer at the central bank.

She noted the Philippine economy was at par with the benchmark in
1965-1983 before it was hit by political unrest, a string of natural
disasters, and economic turmoil in 1984 that was followed by a
deceleration in per capita gross domestic product (GDP) growth. This was
followed by the lack of investments in agriculture, industry,
manufacturing and services.

The paper placed the Philippines in the same group with slower growing
emerging economies such as Argentina, Brazil, Colombia, Mexico and South
Africa.

The top performing emerging countries included Indonesia, Malaysia,
Thailand, China and India, while classified as moderately growing were
Egypt, Turkey, Mongolia and Pakistan.

For faster growth to be recorded, the government needs to increase its
fiscal space to help hike public investments, Ms. Tolo said. She added
that higher government spending would require "raising tax revenue
through both administrative and selective tax policy measures."

Also, "Better irrigation, access to fertilizers, farm-to-market roads,
and storage facilities could support development in the agricultural
sector."
Economic growth was just 3.6% as of September, well below the official
5-6% target and the 4.5-5.5% forecast. This prompted the IMF to cut its
full-year outlook for 2011 to 3.7% from 4.7% previously. -- N. J. C. Morales

Monday, December 12, 2011

Revamp in state banks' board selection seen

STRICTER selection of state banks' board members will likely result from
the Senate's probe on the alleged behest loans extended to a prominent
businessman, a legislator said.

"We will... study different models [of selecting the board members of
state banks]," Sen. Sergio R. Osmeña III, chairman of the Senate banks,
financial institutions and currencies committee, told BusinessWorld in a
text message last Friday when asked about the legislation that will
likely result from the hearings on loans extended by the Development
Bank of the Philippines (DBP) to Roberto V. Ongpin, chief executive of
several companies and former Trade minister.

"Board members of government banks, unfortunately, are objects of behest
or desire letters from the Palace and are not subject to screening by
the Monetary Board... unlike [those of] private banks.

This is wrong," he added.

Nestor A. Espenilla, Jr., Bangko Sentral ng Pilipinas deputy governor
for bank supervision, said in a separate text message last Thursday the
probe should result in the "strengthening of the governance
arrangements" of government banks DBP and Land Bank of the Philippines
(Landbank).

"Primarily, the amendment on provisions pertaining to the board of
directors on how they are selected and their accountability," Mr.
Espenilla added.

According to the DBP charter, Republic Act (RA) 8523, which amended
Executiver Order 81, the bank's board should be composed of nine
members, all to be appointed by the President. The chairman shall
preside the meetings, and the president of the bank will serve as
vice-chairman and assist the chairman. Four members should come from the
private sector.

Qualification of the board members are as follows: natural-born
Filipinos, not less than 35 years old, of good moral character and
proficient in banking, finance, economics, law, agriculture, business
management or government administration.

The Landbank charter, RA 7907, which amended Republic Act 3844, states
that the bank's board of directors be composed of nine members, of which
the Finance secretary will serve as chairman, and the bank president as
vice-chairman. The secretaries of the Agrarian Reform, Labor and
Agriculture departments will serve as ex-officio members. The President
will appoint two members to represent the agrarian reform beneficiaries
and another two to represent the private sector.

As in the DBP charter, RA 7907 specifies that Landbank's board members
must be natural-born Filipinos, not younger than 35, of good moral
character and experts in banking, finance, economics, law, agriculture,
agrarian reform or business management.

The Manual of Regulations for Banks, in contrast, is very strict when it
comes to the board members of private banks. It specifies that at least
two must be independent directors. Directors must satisfy requirements
on "integrity/probity, competence, education, diligence and
experience/training."

Sought for comment, Leonora A. Fernandez, DBP first vice president for
corporate affairs, said in a telephone interview the bank is open to
changes to its charter. "Anything that will improve the charter and
would benefit the public is fine. If the Senate sees it fit to amend it,
we're open to that," she said.

Landbank officials were not available for comment.

The Senate is investigating the loans obtained by Mr. Ongpin from the
DBP, which the businessman used to purchase shares in a mining firm.

Mr. Ongpin later sold his stake in Philex Mining Corp. to the group of
businessman Manuel V. Pangilinan.

Mr. Osmeña earlier said the probe will also result in changes to the
Securities Regulation Code, Anti-Graft and Corrupt Practices Act and the
Corporation Code. -- A. S. O. Alegado

Sunday, December 11, 2011

DBP extends micro-agri financing in Region 1

STATE-RUN Development Bank of the Philippines granted a P20-million loan to Sta. Cruz Savings and Development Cooperative (SACDECO) to allow the latter to extend loans to micro-agricultural entrepreneurs in Northern Luzon.

In a statement on Friday, DBP said it extended a P20-million to SACDECO under its Agriculture Credit Policy Council-DBP Cooperative Agricultural Lending Program Facility.

"Through this credit facility, the bank aims to provide loan financing to viable cooperatives and stable cooperative banks extending agricultural loans to eligible borrowers," DBP said in the statement.

SACDECO is a cooperative in Region I who provides financing for the micro-agricultural entrepreneurs such as farmers and fisherfolk in Northern Luzon that includes provinces of Ilocos Norte, Ilocos Sur, La Union, and Pangasinan, with its head office located in Sta. Cruz, Ilocos Sur.

It has six branches located at the towns of Santa and Santiago in Ilocos Sur; Bangar and Bacnotan in La Union; and Villasis and Asignan in Pangasinan.

ACPC-DBP cooperative agricultural lending facility focused on lending to cooperative banks and cooperatives extending agricultural loans to small farmers and fisherfolk.

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

Saturday, December 10, 2011

IMF explains drop in Phl's GDP ranking

By Lawrence Agcaoili (The Philippine Star) Updated December 10, 2011
12:00 AM Comments (2)

MANILA, Philippines - A study commissioned by multilateral lender
International Monetary Fund (IMF) showed that the Philippines continued
to lag behind its neighboring countries in the Asia Pacific Region in
terms of economic growth due to political uncertainty, weak economic
performance, high government debt, low investments, and weak government
spending.

The study showed that the ranking of the Philippines in terms of real
gross domestic product (GDP) growth dropped to its lowest level of 22nd
for the period 2005 to 2008 from 15th in 1965 to 1969.

The highest ranking of the Philippines between 1965 and 2008 was 12th
from 1995 to 1999.

Willa Boots Tolo, author of the report and presently a bank officer at
the Bangko Sentral ng Pilipinas (BSP), stated in the paper that the
Philippines placed second in terms of highest per capita GDP in Asia way
back in the 1950s but has now been overtaken by Malaysia at 16th,
Indonesia at 10th, Thailand at 15th, and Vietnam at 7th place.

The ranking was led by China, India, Mongolia, Argentina, and Uruguay.

Tolo said the factors blamed that contributed to the weak economic
performance of the Philippines included weak agricultural productivity;
high government debt; low public, private, and foreign investment; weak
research and development spending; low spending on education; lackluster
tourism sector; relatively high income inequality; high corruption;
strong population growth; more episodes of financial crisis; and
political uncertainty.

She pointed out that the Philippines also lacked a sustained period of
improvement in the key growth determinants indicating that a strong and
persistent period of economic reforms has been absent.

"The Philippines' mediocre performance in a number of
indicators-particularly relative to its Asian couterparts-illuminates
some of the existing pieces of the Philippine growth puzzle," she said.

In order to catch up with its East Asian counterparts, she explained
that the Philippines need to maintain macroeconomic stability, expand
its fiscal space, and redirect public spending to agriculture,
infrastructure, and research and development.

"Expansion of the fiscal space and thus scaling up spending on public
investment requires raising tax revenue through both administrative and
selective tax policy measures. This would include strengthening tax
administration, reform in excise taxes, rationalization of fiscal
incentives, and addressing exemptions in value-added taxation," she added.

According to her, development in the agricultural sector could be
supported by better irrigation, access to fertilizers, farm-to-market
roads, and storage facilities.

The paper said the Philippine government should focus on public-private
partnership (PPP) scheme launched by the Aquino administration for
traditional and nontraditional infrastructure investments that is
beneficial for maximizing the returns to development.

It added that the government should also strengthen its focus of
education on the sciences in all levels would encourage future
researchers and scientists who would be instrumental in nation building.

Latest data from the National Statistical Coordination Board (NSCB)
showed that the GDP growth of the Philippines slackened to 3.2 percent
in the third quarter from 7.3 percent in the same quarter last year due
to weak global trade and underspending by the Aquino government bringing
the GDP expansion to 3.6 percent from January to September this year.

Economic managers led by Socioeconomic Planning Secretary Cayetano
Paderanga said it would be difficult for the government to meet the
revised GDP growth of 4.5 percent to 5.5 percent set by the
Cabinet-level Development Budget Coordination Committee (DBCC).

Sunday, December 4, 2011

Remittances seen to reach $23B in 2011

Remittances seen to reach $23B in 2011
By: Michelle V. Remo
Philippine Daily Inquirer
11:54 pm | Thursday, December 1st, 2011

The World Bank expects remittances to the Philippines to reach $23
billion this year on account of rising demand for Filipino workers
despite the unfavorable economic climate abroad.

The institution's forecast is higher than the Philippine government's
own estimate of $20.1 billion, which represents a 7-percent growth from
the $18.8 billion reported last year.
Also, World Bank said the Philippines would likely remain the fourth l
argest recipient of remittances after India (expected to receive $58
billion), China (seen with $57 billion), and Mexico (with $24 billion).
For all developing countries, remittances are expected to hit a total
amount of $351 billion, representing an 8-percent increase from last
year's $323 billion.
This year may be the first time when remittances to developing countries
will grow since the global financial crisis of 2008, World Bank said.
The Philippines has proved to be an exception as it continues to
experience rising remittances even at the height of the global turmoil
in 2009.
"Despite the global economic crisis that has impacted on private capital
flows, remittance flows to developing countries have remained
resilient," said Han Timmer, World Bank director for development
prospects group.
World Bank also said remittances to developing countries would continue
to grow through 2014 buoyed by prospects of the global economy's modest
growth.
Remittances are a closely watched economic indicator. For the
Philippines, remittances from about 10 million overseas workers
significantly fuel consumption of Filipino households that, in turn,
drives growth of the domestic economy.

In Nueva Ecija, so many owe trade success to so few: Story of ASKI

In N. Ecija, so many owe trade success to so few: Story of ASKI

By: Anselmo Roque
Inquirer Central Luzon
11:03 pm | Saturday, December 3rd, 2011

CABANATUAN CITY – Backed by a compulsion to empower the poor, the Alalay
sa Kaunlaran Inc. (Aski) has evolved into this city's most vigorous
microenterprise development organization.

Aski started operations in a small rent-free room in 1987. Today, the
microfinance provider, now housed in a three-story building here,
oversees 38 branches in 11 provinces in central and northern Luzon.
It also operates a branch in Singapore for overseas Filipino workers.

Aski used to be run by two volunteer employees, who served five clients.
Today, it has 650 workers serving more than 84,000 entrepreneurs who are
also the group's members.

Most of Aski's clients are market vendors, farmers, women, the youth,
and indigenous peoples in Nueva Ecija, Bulacan, Pampanga, Tarlac,
Pangasinan, Aurora, Cagayan, Isabela, Quirino, Ifugao and Nueva Vizcaya.

"We are glad the vision of five men and two women leaders who
conceptualized [Aski] has been realized. [Aski] now has assets worth
P1.2 billion," says Rolando Victoria, Aski executive director.

Victoria is an accountant and a former banker. He was supervisor to a
lone employee who served as all-around assistant and troubleshooter.

The office's prized possessions then were a battered typewriter, a set
of chairs, a table, an old electric fan, and a horizon that could be
viewed from the window of the third floor room – which was all the
inspiration they needed to carry out their tasks, Victoria says.

"It was post-1986 People Power revolution then, and social issues like
poverty and unemployment were widely felt. Out of Christian zeal and
compassion, the organization was put up to help turn around [societal
ills] through microenterprises," he explains.

According to Victoria, Aski's founders were guided by the achievements
of David Bussau, pioneer of microfinance systems and cofounder of
"Opportunity International Australia" and "Opportunity International
Network."

Bussau believes in the "beauty of the poor" who, through their innate
talents, can overcome their circumstances when they are given a helping
hand.

Although Aski's good intentions were there, it took some time for the
organization to secure funds for their projects.
"Slowly, contributions came in. The first [donations came] from a doctor
who gave us P2,000," Victoria says.

The volunteers also spent time caroling during Christmas and mounting
dinners-for-a-cause to raise funds.
"[Eventually], the Maranatha Trust of Australia owned by Bussau gave us
P450,000. We started serving the street [entrepreneurs] and other movers
of the microeconomy who have no access to bigger funding institutions,"
Victoria says.
Potential clients underwent Bible sharing, and were given guidelines for
managing a successful business. Small loans taken out by this sector no
longer required collateral.

Aski's first clients flourished and were able to pay their loans.

"[Their success and payments] started the ball rolling," Victoria says.

In 1990, after a powerful quake devastated Luzon, Aski helped with the
rehabilitation efforts, discharging funds to the marginalized to help
them rise from the disaster.

Cooperative stores set up by Aski now sell food, handicraft and other
goods produced by the group's member-clientele.
"We are now looking forward to establishing convenience stores that are
community-operated," Victoria says.
Aski has also developed a micro-insurance service. Each week, members
each contribute P30 for their individual insurance benefits.
Aski is also considering plans to develop a bank. The group and its
member-clients find much pride in its social services program.
"We build hanging bridges, develop spring water systems, put up solar
dryers, repair school buildings, and others. We see in [these programs]
how good partnership with government and other entities works
effectively for a common good," Victoria says.
With its Skills and Knowledge Institute, Aski member-clients are trained
in microfinance management, such as bookkeeping.
"There are many poor but talented people out there who, when empowered,
can make miracles in life. In return [for helping them], they help
others and their communities," Victoria says.

Thursday, December 1, 2011

RBAP remains committed to fostering growth in agriculture sector

Published : Thursday, December 01, 2011 00:00 Article Views : 45

The Rural Bankers Association of the Philippines said it will continue
to be at the forefront of agricultural growth by infusing the needed
capital for small farmers and rural-based small businesses.

According to its president Ian Eric Pama, the organization will remain a
fixture in providing financial assistance to the agricultural sector,
which has showed surprising resiliency despite numerous bouts with typhoons.

"More than ever, we remain essential in providing and extending
financial assistance to our farmers who have achieved a bumper crop
harvest of corn for the first time in recent history," he said in a
speech during RBAP's 54th Charter Anniversary Symposium held at the
Manila Hotel.

The Department of Agriculture recently reported that the Philippines
will be rice sufficient by 2013. This bullish projection is welcome news
for RBAP.

"[The DA forecast] puts us directly in the frontline of sustaining the
financial ability of our farmers and ancillary industries in helping
them move their businesses and agricultural growth forward and upward,"
Pama said. "We can ably move this on by already providing micro
insurance products for the farmers and small businesses that are
dependent on agricultural production."

During the same event, Bangko Sentral ng Pilipinas Deputy Governor
Nestor Espenilla Jr. said the current roster of players in the rural
banking industry, which he affectionately alluded to as the "next
generation," is growing at an impressive double-digit pace in all key areas.

"Loans are up by more than 20 percent; deposits by more than 14 percent.
Return on equity is nearly 16 percent," he said, referring to industry
figures during the first nine months of the year. "The rural banking
sector is fast evolving and clear indications of the continued
consolidation of the sector are increasingly evident."

At end-September, there were 582 rural banks with 2,009 branches and
offices.

Espenilla noted that over the last 30 years, the total deposit base of
the rural banking system has grown exponentially from just P2 billion to
P115 billion today—a 50-fold improvement.

"The message is clear—strong and well-managed rural banks are thriving
and retain the capacity to expand. They will define the rural banking
industry of the future," he said.

Last year, the BSP issued circulars on housing microfinance, micro-agri
loans and microinsurance. Twenty-one rural banks have micro-agri
products, 24 with housing microfinance and 49 that have indicated their
intention to offer microinsurance products.

"Rural banks have evidently embraced innovation and taken pioneering
efforts in the development and delivery of products," the BSP official
added.

Rural banks are mandated to allocate 25 percent of their total loan
portfolio for the agri-agra sector.

Presidential Decree 717 or the Agri-Agra Law mandates that at least 25
percent of banks' total loanable funds should be made available to the
agriculture sector, 15 percent of which (or 60 percent of the loanable
funds) for agriculture stakeholders and the 10 percent balance (or 40
percent of the loans) for agrarian reform beneficiaries.

However, the law also permits banks to invest in other non-agri ventures
like investments in the housing, education and health sectors as a means
of alternative compliance.

Currently, more than 50 percent of rural banks' total loans are invested
in the agri-agra sector.

In addition, more than 32 percent of rural banks' loan portfolio is
invested in the agriculture sector totaling more than P35 billion. Loans
to the agriculture sectors have been exceeding 30 percent of the total
loan portfolio of rural banks for the past several years.

Under the Barangay Micro Business Enterprises Act of 2002, government
financial institutions that set up special credit windows to fund the
operations of micro businesses would be able to use the loans granted to
BMBEs as alternative compliance to the Agri Agra Law, and Republic Act
6977 or the Magna Carta for Small and Medium Enterprises.

In addition, the BMBE law provides that any loan granted by a private
institution will be counted as twice in terms of compliance with the SME
Act and with regard to the Agri-Agra Law.

The RBAP was created primarily to advance the industry's mandate to be
the catalyst for countryside development as it provides the financial
services to the unserved and underserved markets.

Monday, November 28, 2011

Online Computer Support UK

Smartsupportguys provides Online Computer Support , Online Computer Repair, Laptop tech Support, Printer and Email Support for customers of UK, USA and Canada.

For more details have a look on our official website http://www.smartsupportguys.com/or Call 02071939831 Now.

Saturday, November 26, 2011

50 microinsurance products service 2M ‘underserved’ Pinoys

50 microinsurance products service 2M 'underserved' Pinoys

TUESDAY, 22 NOVEMBER 2011 19:49

THE microinsurance space is finally an expanding universe in the
Philippines, with the industry now offering 50 microinsurance products
to date, the government said on Tuesday.

Microinsurance, also called sachet insurance by industry practitioners
because even the poor may now have risk cover that only the more
financially well off could afford before, may be a relatively young
industry but it already extends benefits to two million Filipinos who
are members of so-called mutual benefit associations or MBAs around the
country.

According to the Department of Finance, the various MBAs offer mostly
miroinsurance products to their members, a development that has
effectively raised the country's so-called insurance penetration rate,
considered one of the lowest in the region.

Finance Undersecretary Gil Beltran, who reports on the subject today at
the start of the ASEAN Insurance Congress in Singapore, said some two
million MBA members already enjoy risk cover via the 19 insurance
companies and 17 MBAs that offer the service at present.

According to Beltran, 14 of the 19 MBAs are wholly engaged in
microinsurance and that the government has approved 50 microinsurance
products to date.

Of the total number, 33 were life microinsurance cover and 17 were
non-life microinsurance cover.

Beltran said the numbers result from the government's continuing effort
to capture even the so-called unserved and underserved Filipinos in the
microinsurance space and forms part of the larger goal to promote
financial inclusion in the country.

He said if the much earlier microcredit program pushed by government
addressed the financial needs of the unserved and underserved Filipinos,
the microinsurance program should provide cover for future unforeseen
and unexpected contingent events that threaten life, limb or even property.

Beltran also said the country's microinsurance program is at that stage
of development where the Economist Intelligence Unit, in a study on
microfinance in the Philippines in 2010, ranked the country number one
of 54 countries in terms of putting up the regulatory framework needed
to make the industry viable or attractive.

The same study ranked the Philippines number two in overall microfinance
business environment, number four in institutional development, and
number 18 in investment climate.

Private practitioners earlier estimated the domestic microinsurance
space to be worth at least P2 billion.

The non-life component of that market was estimated to be worth at least
P200 million.

Friday, November 25, 2011

The increasing role of workers’ cooperatives

THINKING GLOBAL

The increasing role of workers' cooperatives

By: Dr. Bernardo M. Villegas

INQUIRER.net
12:31 am | Friday, November 25th, 2011

There are many ways of skinning the capitalist cat. Instead of the
Marxist cry for workers to unite to destroy the free enterprise system
and replace it with Socialism, there is the rising trend towards workers
forming cooperatives to engage in all types of business. I am glad to
see more workers' cooperatives in the Philippine business scene.

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 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, participate 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 UK, 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' refers 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 e-mail address is bernardo.villegas@uap.asia.