Financial IQ: Government encourages individuals to start businesses

Department of Trade and Industry (Philippines) (Photo credit: Wikipedia)

Financial IQ Philippines Quick Hit(s):

It is nice to see the government taking steps in pushing for more persons to venture to businesses.  It would even be better to provide these persons the proper mindset and basics of money management, aside from the technical aspects... to make it sustainable.


The government is beefing up efforts to reintegrate returning overseas Filipino workers (OFWs) through programs encouraging them to start businesses, the National Economic and Development Authority (Neda) said.

Socioeconomic Planning Secretary Arsenio M. Balisacan said micro-, small-, and medium-sized enterprises (MSMEs) can harness the resources, experience and expertise grained by OFWs to generate employment and contribute to development.

Balisacan is also Neda director general.

The government, through the Commission on Filipinos Overseas and the Department of Trade and Industry (DTI), has put up the BALinkBayan (Business Advisory Link para sa Bayan) website to help OFWs set up businesses and investments in the Philippines.

The website provides a link to DTI’s One-Town-One-Product (OTOP) program, as well as other community-level convergence programs of the Departments of Agriculture, Agrarian Reform, and Environment and Natural Resources.

Neda said that other enterprise programs under the MSME Development Plan: 2011-2016 also aim to encourage local entrepreneurs and returning OFWs to invest their resources in the country.

As of June 2012, 19,403 participants were trained in weaving, bamboo processing, making handmade paper, branding, management and values formation to increase their productivity and access to markets.

In 2011, 2,034 OFWs were provided training by the Overseas Workers Welfare Administration and the Philippine Trade Training Center to encourage them to become entrepreneurs.

Similarly, the Rural Micro Enterprise Promotion Program continues to provide financial (microfinance) as well as technical assistance to promote the development of microenterprises.

http://business.inquirer.net/106991/govt-encourages-ofws-to-start-their-own-firms

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Financial IQ: Fewer households allot remittances for savings

Coins (Photo credit: Wikipedia)

Financial IQ Philippines Quick Hit(s):

Hopefully, households were able to find alternative investments that provided good returns... instead of just spending money on items/services for immediate gratification.  Remember to first set aside at least 10% for investment, and the remaining for expenditures.


The proportion of Filipino households that set aside remittances for savings and investments dropped in the fourth quarter from a year ago, highlighting the need to provide financial education to more people in the country.

The Bangko Sentral ng Pilipinas said that households dependent on remittances would need to learn how to save and invest the money they receive to secure their future and stimulate growth of the economy.

Results of the latest quarterly BSP survey showed that only 39.5 percent of respondents said they used a portion of their money for savings. This marked a drop from the 42.6 percent recorded in the same period last year.

Still, the fourth-quarter figure was better than the 36.8 percent recorded in the previous survey three months ago.

Results also showed that respondents who said they used a portion of their money for investments settled at just 3.1 percent. This represented a decline from the 6.4 percent registered a year ago, and the 4.9 percent of the previous quarter.

The survey was conducted in the first two weeks of October and had a sample of size of 478 households that regularly receive money from abroad.

The drop in the number of households that save up and invest the money received coincided with the current low-interest-rate environment, which led to shrinking yields on bank deposits and portfolio investments.

Economists said that in times of low interest rates, people tend to spend more of their money rather than save up or invest in fixed-income securities.

BSP Deputy Governor Diwa Guinigundo earlier said that if OFW households were to use their money to put up their own businesses, the multiplier effect of remittances on the economy would be much bigger. This is because, when one puts up a business, even a small one, he or she will create jobs.

At least 10 million Filipinos are estimated to be working overseas. Their remittances amounted to $20.1 billion last year. The World Bank expects remittances to the Philippines to rise to $24 billion this year, making it the third-biggest recipient next to India and China, with $70 billion and $66 billion, respectively.

http://business.inquirer.net/98477/bsp-fewer-households-allot-remittances-for-savings

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Financial IQ: Revised SSS home loan rates

TED Spread Chart - Data 2008 zh-hant (Photo credit: Wikipedia)Financial IQ Philippines Quick Hit(s):

In case you are looking at getting home loan that are less than 1 million pesos, it may be worthwhile to check out SSS.  Though I have not personally tried it yet, seems like interest rates were reduced.


State-run Social Security System (SSS) has cut down its interest rates and raised the maximum amount of its housing loans to help members gain wider access to decent shelter at affordable terms.


In a statement, Emilio de Quiros Jr., SSS president and chief executive said members can now borrow up to P2 million, which is double the amount offered in the past, while annual interest rates were reduced by as much as five percent.


“The revised guidelines aim to align SSS housing loan programs to current industry practices. Our longer payment terms and fixed interest rates also make SSS loans competitive to lending facilities offered by other institutions such as banks,” De Quiros said.


The new interest rates for individual members are pegged at eight percent per annum for loan grants of up to P400,000; 9 percent for up to P1 million; 10 percent for up to P1.5 million; and 11 percent for up to P2 million. Interest rates are fixed for a period of 15 years.


Employees, self-employed individuals and overseas Filipino workers with at least 36 contributions, including 24 months of continuous payment of premiums, and have no retirement or total disability claims can borrow. They and their spouse must have no delinquent SSS loans.


"We also increased the P300,000 limit on House Repair and Improvement loans to P1 million. Among those who will benefit are members whose homes were damaged by natural calamities and families who want to expand or renovate their house," De Quiros said.


SSS lowered its 14 percent interest rate to 11 percent for entrepreneurs and developers of subdivisions, condominiums and other residential properties.

http://mb.com.ph/articles/357508/sss-lowers-housing-interest-rates

Financial IQ: Premarital sex among Filipino

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Financial IQ Philippines Quick Hit(s):

You might be asking... how does this relate to Financial stability?

Check John Gokongwei's 12 longevity secrets.  In particular, his 3rd secret - marry a good wife.  As studies show, those who practice chastity has a 70% chance of good marriage.


OFWs working in North America or Europe are very much aware of rampant premarital sex among adolescents in their respective host countries. It is taken for granted that chastity is an old-fashioned virtue that young people can no longer practice because of the sexually permissive environment in which they live. Deep within, these OFWs—especially mothers who left their children behind—are still hoping and praying that their daughters and sons continue to value chastity and do not go the way of adolescents in many Western societies.


These concerned parents must do everything in their power to prevent the controversial RH Bill from being passed. The obsession with the promotion of artificial contraceptives among those pushing the so-called RH Bill is partly based on the assumption that we have to prevent unwanted pregnancies among adolescents who find it impossible to avoid premarital sex. This presupposition is based on the empirical observation that in many countries in the Western world, the majority of teenage girls have had sex before they get married. Those in favor of the RH Bill claim that they are just being “realists.” To them chastity is an impossible ideal. Well, I claim that they are defeatists. They are assuming that the youth in the Philippines cannot rise above their purely animal instincts. Before they even try, these lawmakers have given up on values and character education of the youth and the spiritual formation that can come from religious faith, whatever the creed.


“So, what’s his point? The point is not to put our loved ones in danger. We said that asking ‘how far can I go with a girl without sinning’ can be put more positively into ‘how far can I go with a girl in protecting her innocence.’ Think of it this way. He invited us to think of our future wife who may be dating another guy right now. How far do we want that guy to go with her? It is like Stephen Covey’s ‘thinking with the end in mind,’ the end here being marriage. Then he said, ‘Girls, do not allow a guy to lift the veil of your body before he lifts the veil on your head—in marriage.’


“To illustrate his point further he cited statistics in the US which show that those who married as virgins had a divorce rate of 70 percent less than those who were not. This was taken from a 700-page book compiling the results of a research that had the largest survey respondents. What made me think deeper was his analogy of our love for our future wife with the love of Christ for the Church. He quoted St. Paul’s letter to the Ephesians. I couldn’t help but think of Mel Gibson’s ‘The Passion of the Christ’ where he described how Jesus suffered for us, His Church, His Bride.  He said that that’s how much we have to be willing to suffer for our future wife. And part of that sacrifice is to live a chaste life now. We need to free ourselves so that we can love!”

http://business.inquirer.net/13775/premarital-sex-among-filipino-teenagers

Financial IQ: Can OFWs purchase life insurance?

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Financial IQ Philippines Quick Hit(s):

Yes, but OFW has to return to Philippines (even only while he/she is transacting the insurance) if he/she wants to buy life insurance in Philippines.


Can OFWs avail of life insurance protection? How? My two uncles are overseas Filipino workers and a cousin is a seaman. Are there special requirements for OFWs to buy life insurance and health insurance depending on what countries they’re based in or the nature of their work, etc.? I hope to become an engineer and also work abroad because our government leaders do not create the environment for a good economy here so hardworking people need to work overseas.- I suggest that since a lot of people read The Philippine Star, you write in your column to ask the government and life insurers to give special discounted insurance plans for OFWs. How can OFWs abroad buy life insurance from Philippine companies? Do they have agents overseas?


Renato M. Mendoza, 17 years old, student, Mandaluyong City


Answer


The good news is the Philippine government, by virtue of Republic Act 10022, Section 23, requires recruitment and manning agencies provide insurance coverage for each worker whom they deploy overseas. Included in this compulsory insurance coverage are: life insurance for natural and accidental death, total permanent disability as well as non-life insurance that covers repatriation cost, subsistence allowance benefit, compassionate visit, medical repatriation and medical evaluation. This is a good starting point for workers who are venturing overseas for the first time.


As for your personal life and career progress, you have to continuously assess your financial needs and plan accordingly. Life insurance agents can work with you in developing and implementing your financial plan.


Generally, life insurance companies and their agents can only do business in the country where they are licensed to operate. Further, our insurance law requires that a person buying life insurance must sign the application form in the presence of his/her agent. Therefore, the best time for an OFW to purchase an insurance policy from a Philippines-based company is while he/she is here, during vacation or training.


The country and nature of work are important considerations in life insurance. Premium rates (cost of insurance) vary according to the risk associated with one’s occupation. An office employee, for instance, pays less for the same type of insurance, than a construction worker. In terms of workplace, insurance companies usually refer to POEA advisories on travel bans and apply the same restrictions to life insurance applications.

http://www.philstar.com/Article.aspx?articleId=636460&publicationSubCategoryId=82