Banking and Finance Industry [Archive]

sugarboy

November 7th, 2006, 01:55 AM

Banco de Oro, Equitable PCI approve merger

By Doris Dumlao
Inquirer
Last updated 03:15am (Mla time) 11/07/2006

EQUITABLE PCI Bank and Banco de Oro Universal Bank, both controlled by mall tycoon Henry Sy, announced Monday approval of a merger that would create the country’s second-biggest bank, with assets of P613 billion.

The merger of currently the third and fifth largest banks will edge out the Ayala group’s Bank of the Philippine Islands from the number 2 slot in ranking based on asset size. BPI has about P529 billion in assets. At the top rank will still be Metropolitan Bank and Trust Co., has assets of P629 billion.

The merger will be done via a stock swap. Banco de Oro will exchange 1.8 of its shares for each share of Equitable PCI. The combined entity will be called Banco de Oro-EPCI Bank, with Banco de Oro as the surviving entity.

Teresita Sy-Coson will chair Banco de Oro-EPCI Bank. Her father, Henry Sy, will be chairman emeritus.

Banco de Oro president Nestor Tan will be the president of the merged bank. Equitable PCI Bank president Rene Buenaventura will become vice chairman for retail banking, while Jesus Jacinto will be vice chairman for corporate banking.

“It will significantly widen the combined entity’s base,” Sy-Coson said at a press briefing Monday. “We will be among the largest banks across all measure. We will have combined market capitalization of $2 billion.”

Governor Amando Tetangco Jr. of the central bank, Bangko Sentral ng Pilipinas, said, “The proposed merger of Banco de Oro and Equitable PCI will create a bigger and stronger institution which will be among the leaders in the industry.”

Tan said the legal closing of the transaction could be expected by the first quarter of 2007 and operational consolidation of all 698 branches would be completed in 24-30 months.

The merger plan was approved by the two banks’ directors in separate board meetings Monday. It was also approved by the Securities and Exchange Commission. The plan will be submitted to stockholders in December for the final imprimatur.

Under corporate law, a merger needs the consent of 67 percent of stockholders.

Sy’s SM group has yet to consummate its purchase of a 25.84-percent stake in Equitable PCI held by the Social Security System, but the state-run pension fund voted in favor of the merger with Banco de Oro.

At Banco de Oro’s closing price of P44.50 a share on Monday, the merger would be valued at about P80.1 for each Equitable PCI share. Equitable PCI closed Monday at P72.50 per share. With INQ7.net

kevinb

November 9th, 2006, 11:35 AM

Is it true that BDO Unibank will buy BPI?

Lili

November 10th, 2006, 04:32 AM

HSBC became one of the most successful global banks by merging with and/or buying small banks and community banks.

sugarboy

November 10th, 2006, 05:07 AM

i like HSBC. i bank with them

marites4

November 22nd, 2006, 02:06 AM

Where would you cash a larger sum of dollars into pesos other than the bank. The bank rate is always way below the market rate isn't it? So if you're cashing a huge amount 5 pesos per dollar can be a big difference.

sugarboy

February 8th, 2007, 12:18 AM

‘New head, new direction’ boosts RCBC stock
Inquirer
Last updated 04:53am (Mla time) 02/08/2007

SHAREHOLDERS of Rizal Commercial Banking Corp. (RCBC) together are P12.8 billion richer, with the stock price almost doubling in just a month, according to the latest data from the Philippine Stock Exchange.

The data show RCBC’s performance since early January has outstripped the stock market index and other banking stocks -- a behavior market watchers attribute to a recent change in the top management of RCBC, the banking arm of the Yuchengco group.

Market analysts believe the share price has benefited from the appointment of Lorenzo V. Tan as the new chief executive of RCBC.

“That can be part of the reason the price per share is aggressively rising,” UBS Securities research head Jody Santiago said. “Lorenzo Tan was instrumental in turning PNB [Philippine National Bank] around.”

Santiago added that sentiment toward the banking sector was also getting a boost from a favorable macroeconomic environment, which makes it easy for banks to raise fresh capital.

RCBC's capital adequacy ratio -- the proportion of equity to assets exposed to risk -- is one of the lowest among big-league banks.

On Wednesday, RCBC’s stock price ended at P44, up P1 from Tuesday, with P18.5 million worth of shares traded.

Since Jan. 5, the day Tan’s appointment was made public, the share price has risen by 83 percent.

tigidig14

February 8th, 2007, 02:20 AM

you get $100 free added into your account if you sign up for bank of america as long as youre college under or graduate student, and deposit $25 :D

you get $50 gift card if you sign up for la salle bank and deposit $50

you get $25 free if you sign up for charter one bank if you deposit $50, thats about a year and half ago. i dont know now

you get $25 worth of gift card from chase bank if you first open an account from them, get $15 if you open a savings account with $25 at least money deposit in each account.

and then after three months close them and tell that youre closing your accounts because you became unemployed and need that money for your rent :lol:

you get at least $8 every week if you open an IRA account cornerstone strategy fund at least $5000 to start with and $50 deposit each month

jgacis

February 8th, 2007, 04:17 AM

What are some of the best banks to borrow from to buy a condo in MM? Such as lowest rates, least restrictions, etc..

I'm from the states, and obviously the requirements here in the US are different (but also with few basic similarities). Just wondering if most buyers here finance it through the developer or prefer their own choice of bank instead.

sugarboy

February 8th, 2007, 11:08 PM

^^ i heard from a friend that BDO is really flexing its muscles as the number 2 bank offering super low rates.

however, here are some figures from Metrobank....
(got this yesterday as i was eyeing something on the market)

LOAN AMOUNT: P 1.5million
fixed rate for 10 years : 10.99%pa
monthly ammortization : 20,654.01

LOAN AMOUNT: P 1.5million
fixed rate for 5 years : 9.75%pa
monthly ammortization : 31,666.37

LOAN AMOUNT: P 2million
fixed rate for 10 years : 10.99%pa
monthly ammortization : 27,538.68

LOAN AMOUNT: P 2million
fixed rate for 5 years : 9.75%pa
monthly ammortization : 42,248.49

jgacis

February 9th, 2007, 09:16 AM

^^ Thanks for the info. That gives me some idea of what some of the payment schemes and rates are from commercial banks.

I also heard in the news that the World Bank has praised the Philippines for its improved fiscal position, but wants the country to show sustainability and further reform of it's fiscal policies. They mentioned that Philippine banks need to show more liquidity in their foreclosed and repossessed properties. I don't know why they mention that, maybe because the banks want top dollar for their properties? Or maybe because the bidding process for repossessed properties are too complicated (or the process too lengthy) for most people. Hence, maybe the stock inventory of repossessed properties from banks continue to increase on an annual basis, which is not a good economic indicator. Any more insight on this?

Here in the U.S., a U.S. bank will also want top dollar for their repossessed property, but up to a certain time limit. They will assess whatever the market avails for the price and the number of bidders out there. They are in the business of financial lending, not property management and real estate sales, so they will try to sell in the most expedient time possible. They know that every month the property doesn't sell, they are losing money because there is no rental income (U.S. banks do not want to become property managers so they will not rent out the property). This is how investors here in the U.S. can sometimes negotiate very good deals with the banks on foreclosed properties (especially in a slow market).

One of the ways U.S. banks decrease their risk is by looking at a borrower's credit score. We have a good accountable credit system here. There are 3 private (non-government) credit bureaus that monitor the credit payment history of all borrowers and rate individuals by a scoring system. The 3 bureaus are private companies but regulated by Federal consumer protection laws. Each bureau gives a score to an individual with their own proprietory software calculation system. The 3 scores (from each company) gives a "check and balance system" so that no one score is biased against a person's credit history. The banks usually take the median score (the middle score, excluding the highest and lowest score) into consideration for home loan applications.

How do Philippine banks deal with this? Anyone have any experience on this topic?

Dvorak

February 9th, 2007, 09:43 AM

China Bank and Banco De Oro gave me a quote of 8.75% p.a. interest for 5 years.

sugarboy

February 9th, 2007, 07:23 PM

^^ wow. ok yun a!

Bo B

February 9th, 2007, 07:40 PM

Bo B

February 9th, 2007, 07:41 PM

Rene Ybardolaza

February 10th, 2007, 12:39 AM

I also heard in the news that the World Bank has praised the Philippines for its improved fiscal position, but wants the country to show sustainability and further reform of it's fiscal policies. They mentioned that Philippine banks need to show more liquidity in their foreclosed and repossessed properties. I don't know why they mention that, maybe because the banks want top dollar for their properties? Or maybe because the bidding process for repossessed properties are too complicated (or the process too lengthy) for most people. Hence, maybe the stock inventory of repossessed properties from banks continue to increase on an annual basis, which is not a good economic indicator. Any more insight on this?

John, A little over ten years ago when I was working with The World Bank, we did an analysis of the real estate market and lending practices in the Philippines. At that time, the economy was doing well under the Ramos presidency, and the real estate market was appreciating fast. Given that rosy scenario, government agencies that were lending and providing guarantees had large portfolios of non-performing loans. The foreclosure process then (I don’t know the current practices) was very cumbersome. The system allows the foreclosed borrower one year of redemption period – a loooong amount of time for a non-performing loan to sit idle in one’s books. When I shared with a developer how the U.S. lenders do their foreclosure process, where the property is acquired by the bank in less than 120 days, the comment to me was, “masyadong malupit kayo.” On the personal side, my wife’s uncle, who was a councilman at the time, had been delinquent with his loan for over three years, and no one from the bank has sent him a notice of default. Obviously, there was inefficiency in the system.

Another difference we noted is the way Philippine banks look at non-performing loans in their portfolio. In the U.S., the bank’s objective is to get rid of non-performing asset as quickly as possible by giving it a haircut, sometimes selling assets 50 cents to a dollar, if necessary. Thus, the need for more reserves. The Philippine counterpart is not so willing to realize that loss in the balance sheet. There is cultural belief that property value cannot go below the original value when the loan was created. This is similar thinking in Japan. So instead of getting non-performing assets off their books, they wait for the value to rise – per market demand.

Another cultural difference is the way loans are underwritten. The U.S. lending practices is probably 25 years ahead of the Philippines, where loans are bundled, sliced and diced into securities (Mortgage-Backed Securities) for investors with different appetites for risk. This means loans must be originated with uniform documentation, standard underwriting practices, etc. In the Philippines, we found multi-million peso loans originated with no documentation – all done with a handshake. In a country where your face is more important than your signature, the handshake will do just fine. After the break-up of the Soviet Union, a lot of Americans went in to invest and lost their shirts because they lacked understanding of this cultural difference. The American placed a higher trust to the value of the pen, instead of the value of the person using the pen. Unfortunately, loans originated with a handshake do not have value if the lender wants to sell it to the secondary market.

In summary, what works for one country will not always work for the other. We just need to understand the differences and find commonalities that will allow us to work together efficiently.

jgacis

February 10th, 2007, 06:32 AM

^^ Wow, thanks for that very useful information and insight! Yes, its true, we do need to know our cultural differences and learn from that. Thanks again for that bit of education to me (and hopefully to many others) on that subject.

I do hope that the banks there in the Philippines will still continue to develop and learn to trust more on the pen than just a pretty smile! :D

sugarboy

February 10th, 2007, 08:49 AM

Thanks for the enlightening post Rene. Especially on the item re foreclosure and redemption. I agree with the sentiment na malupit ang banker to act on a property within 120 days but then, business is business. Which is why in my personal experience, when I was also hit by the Asian Financial crisis, I made sure that I'd be able to buy back whatever was foreclosed within 120 days even though 365 days was the provision.

I feel that given the long period of time it takes before a property/collateral gets foreclosed here in the Philippines, the businessman should have had arrived at some back-up plan to avert the inevitable. Without trying to sound too condescending, woe to the businessman who can't come up with a contingency given the ample amount of time allowed to salvage the property taken in as collateral.

Rene Ybardolaza

February 14th, 2007, 03:16 AM

Yes, lending can be a dirty business at times. It’s a balancing act, dealing with the borrower who is having a hard time paying back a loan. On the opposite end, the lender has to protect the assets entrusted upon him by investors.

There is a double standard when doing a workout with a borrower who defaults on his loan. There is leniency towards the homeowner versus the commercial borrower. The logic being - mom and pop is not savvy financially when compared to the commercial borrower who should be a big boy and show responsibility by dealing with the situation like a business.

kalabaw

February 14th, 2007, 03:37 AM

Is it true that BDO Unibank will buy BPI?

Hindi siguro. BPI is one of the largest banks. Sabi nga sa opening post, number 2 sila... just behind MBTC. And I don't think the Ayala's would do that. It's their financial service arm.

But kung may ganyan ngang news, super mega bank na ang kalalabasan niyan -- EPCI, BDO and BPI rolled into one. Yun nga lang, anong itatawag sa bagong bangko? Kung ako, I will still go with BPI... may historical value eh. =) Pero sabi ko nga, malabo yang mangyari...

jgacis

February 14th, 2007, 07:03 AM

There is a double standard when doing a workout with a borrower who defaults on his loan. There is leniency towards the homeowner versus the commercial borrower. The logic being - mom and pop is not savvy financially when compared to the commercial borrower who should be a big boy and show responsibility by dealing with the situation like a business.

That's correct because I read about that too in an article once. It stated that in order for the Philippine economy to grow, it needed to reform its commercial lending practices to more favorable terms. Especially for start-up entrepreneurs, who are looked at as the frontiersmen in leading the growth for the economy.

kiretoce

May 10th, 2007, 05:23 PM

Filipinos turn to pawnshops instead of banks for quick cash (http://www.asahi.com/english/Herald-asahi/TKY200705100053.html)

A woman in a T-shirt and sandals wanders into a pawnshop in the busy shopping district of Pasay city in the Manila metropolitan area.

She pulls a blue piece of paper from her pocket and hands it to the store clerk along with 3,000 pesos (about 7,080 yen).

A few minutes later, the clerk returns and hands her back her gold necklace. The pawnshop had been keeping it as collateral for a loan.

"I had to hand over the necklace because I did not have enough money to pay my house rent. I couldn't wait until the day when my husband, who works in South Korea, got money to me," she said.

The necklace comes and goes between her and the pawnshop several times a year. The woman has no qualms about the exchange.

"I bought it to use as collateral. I pawn my own stuff, so I don't feel guilty."

In less than five minutes, another customer shows up. She hands over a necklace and receives 1,800 pesos (about 4,250 yen).

"My daughter is sick. But I bought a personal computer. (So now I need some extra cash)," she said.

The store is an outlet of Ablaza, a pawnshop chain operating in the Manila metropolitan area. The store is one of the busiest pawnshops in the area.

Many of the customers borrow about 1,000 pesos each, said 38-year-old clerk Marilou Fajardo, who has worked at the store for 18 years.

She says she gets an insight into the lives of her customers when they pawn their articles.

One man comes to her throughout the year to pawn his wedding ring. Each time, he comes back several days later to return the money and take back the ring.

A female customer comes to pawn an item and begins weeping as she starts talking about her personal life.

Fajardo smiles as she says that when she appraises the value of her customers' goods, she does not think about the memories attached to the items or hardships of their lives.

But she also says, "When I think that I'm useful to the customer, I feel that this job is worth doing."

The pawnshop business is said to be the oldest financial service in humankind's history. In recent years, it has been growing rapidly in the Philippines.

According to the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, as of December 2006, there were about 13,000 registered pawnshops across the nation--three times more than in 1995.

The money lent by the pawnshops also grew to 10 billion pesos (23.6 billion yen) in 2004 from 5.5 billion pesos (13 billion yen) in 1995.

One of the reasons the business has grown so much is because of the convenience and immediacy in which customers can receive loans.

The average turnaround from the appraisal of items to lending money is only about 20 minutes. It is much shorter than those required by banks, which implement complicated examinations and procedures.

The interest rates stand at around 5 percent compounding every 30 days, much lower than those of loan sharks.

Despite the common perception, the borrowers are not necessarily poor. Rather, many of the customers are middle-class people who have family members working abroad.

In the Philippines, more than 10 percent of its gross national product (GNP) comes from people working abroad. Many family members depend on this money to survive.

Also Filipinos have little interest in saving money.

A survey shows that families with members working overseas save only 1 percent of the money they get from overseas. When they spend all their cash, they are forced to pawn items such as pieces of jewelry, to get funds to survive. They use the cash until the next lot of money arrives from overseas.

Marc Ablaza, 40, an executive of Ablaza, said that about 60 percent of its customers come back in order to return money and take back their belongings. It was about 30 percent 10 years ago.

"The sharp rise implies that people who will probably be able to return the money are increasingly using pawnshops," he said.

Meanwhile, at a gem appraisal school in Manila, about 80 percent of the students are pawnshop employees, including those who want to open pawnshops themselves.

While listening to their lecturer, they stare at the 0.5 carat diamonds they hold with their thin tweezers.

"Recently, demand for gemologists who can appraise the value of diamonds has been strong," said the school principal, Lucille Bocobo.

She said most pawnshops have their own in-house training systems to teach their employees how to appraise gems. Recently, however, more expensive gems have been increasingly brought to pawnshops making a higher level of appraisal skills more necessary. That's why they are sending their employees to the school.

According to Ablaza, the image of pawnshops used to be dark. Many of their customers were those who had gone broke. Some of the items brought to the shops were stolen ones.

In the 1990s, a growing number of families with members working abroad began using pawnshops. The stores began revamping their interior designs and processes to make it easier for customers to borrow money.

The Ablaza chain painted all of its outlets in light blue and opened shops with female-only clerks so that women could borrow money without anxiety.

The largest pawnshop chain operator, Cebuana Lhuillier, began to air TV commercials in 1994. Since last year, the company has used a catchphrase which emphasizes its higher appraisal rates compared to other pawnshops.

Competition among pawnshops is increasingly becoming fiercer. And the Philippines is not the only country where the popularity of pawnshops is growing. In other countries, such as Indonesia and Sri Lanka, banks are also opening pawnshops.

According to Nimal A. Fernando, a researcher at the Asian Development Bank (ADB), only state-run companies can operate pawnshops in Indonesia. There are now 722 pawnshops throughout the country. About 15 million people used the shops in 2001.

"The number of customers shows that the pawnshops are now a part of the people's lives," said Fernando.

About 40 percent of them borrow less than the equivalent of $4.5 (about 520 yen) each time.

A local bank in Sri Lanka extended 40 percent of its loans by accepting pawned items in 1999.

Pawnshops still have a negative image with some considering their management style dubious or feeling they are exploiting poor people.

But Fernando said: "If you check the actual situation surrounding pawnshops, you will see that pawnshops are a financial service that is necessary for many people.

"You should put away your prejudice against pawnshops and reconsider their roles," he said.

jgacis

May 10th, 2007, 09:08 PM

^^ Seems like a pawnshop is the Philippines version of microlending....

kyle@1008

May 10th, 2007, 09:13 PM

^^ kaya pala ang yaman ng mga Lhullier...

-TC-

May 13th, 2007, 06:54 PM

Rural Banks and Double Your Money Schemes
By Dr. Johnny Noet Ravalo
INQUIRER.net
Last updated 12:59pm (Mla time) 05/10/2007

What can you say about the 20% interest per annum paid by some rural banks? Interest is paid monthly, covered by the PDIC, tax exempt, with five years maturity. In five years, a time deposit of P1 million will double to P2 million plus? -- Geno Real

A rural bank in my place offers an interest rate of six percent for a regular deposit and as much as 10% for a time deposit. Is the risk worth taking? I will only deposit the amount covered by the PDIC, Where can I check the strength of a rural bank to evaluate the risk I may be taking? Chester Barcenas

Geno, Chester, your respective inquiries are quite similar so let me just take them together.

What is probably being offered to you Geno is a double-your-money type of deposit. This takes advantage of a provision in the law that exempts 5-year deposits from the final withholding tax. With this tax break, you would only need an interest rate of 14.8 percent to double your money in five years.

What are the risks to these? The same law that exempts you from the withholding tax says that if you withdraw before the five years are up, you have to pay the tax. The risk here is whether you have enough resources elsewhere to keep you from withdrawing the money you put in the potentially 5-year deposit. If liquidity is an issue, the chances of doubling-your-money in five years are quite remote.

Oh, just to be safe Geno, please make sure that the bank is indeed offering you a deposit instrument that is duly covered by the Philippine Deposit Insurance Corp.

In both of your questions, the deposit rate being offered is something you should think about. For banks to continue operating, its lending and investment operations have to earn a premium over the deposit rates it pays out.

Under present reserve requirements (that’s the portion of funds banks are required to keep as reserves), this premium would be roughly 27 percent. That means a 10 percent deposit rate translates to a 12.7 percent loan rate to fund itself. This is before taxes, before administrative costs, before regulatory fees and before any premium for taking the additional risks.

Make a judgment if the deposit rates these rural banks are offering seem reasonable to you given its environment and business because, no matter how you spin the calculations, these are the hurdle rates the bank must face to continue doing what it is doing.

The insurance provided by PDIC is a safety net. It should not be counted on as a first way out. The insurance should not give you a false sense of security. The point here is a commonly cited tenet in risk management: 100 year wars do not happen often but they do happen. And when they happen, the chances of you outlasting the war aren't too bright either.

When all have been said and done, the ultimate issue goes back to something Chester asked. It would still be part of your due diligence to judge the stability of your potential bank. It is your money so take the pain to make an informed choice of which bank you can trust with your money.
It all boils down to "trust". Thankfully, this does not have to be a leap of faith since there are clear tangible issues that you can consider and evaluate. But it is also not an exact science. Ask around the place what people think of the bank. Some will like it, others will have their own gripes here and there.

Rafael B. Buenaventura, the former Governor of the Bangko Sentral ng Pilipinas and an internationally seasoned banker was often heard saying: if it sounds too good to be true, it probably is.

Take heed. That is very wise counsel from a man who I consider to have very, very few equals.

(Noet Ravalo is the first Filipino to earn a PhD in Economics from Boston University and is a macro-financial economist by practice and profession. He was chief economist of the Bankers Association of the Philippines until 2002 and has since been doing consulting work for multilateral and foreign agencies. His current engagements are with the Bangko Sentral ng Pilipinas and the PDS Group. Over the past 12 years, he has been asked to provide technical inputs to both the Senate and the House of Representatives on various economic and financial legislation, some of which will have big impact on Filipinos’ personal finances.)

ravenhawk

May 14th, 2007, 05:40 PM

^^ PNB used to have that same package several years back. My aunt placed her money in that account. Pero in todays booming market parang lugi ka. Since entering the Stockmarket October last year my portfolio investments had increased by as much as 300% though bulk of which came from some very succesfull IPO's and very risky stockmarket moves like putting all your funds in single company. Which I did twice at TUNA and GEO and investing in third liners. I guess if you have more time to research and study I think it's better to invest the money yourself than let your banker do it for you. Narealize ko din yan sa UITF's parang feeling ko mas matino pa akong fund managers kesa sa kanila. So I decided to pull out and do all the investing myself. Yun nga lang I have to take all the risk and made extra effort to research.

Risk Taker

May 15th, 2007, 05:26 AM

-TC-

May 15th, 2007, 05:25 PM

Aside from the Legacy Group rural banks, meron pa ba iba that offers this promo now? parang sila lang ata alam ko nag o offer nito eh.

Unless you are really a risk taker as your handle suggests... I wouldn't touch them with a 10 foot pole if I were you.

Risk Taker

May 16th, 2007, 04:11 AM

Unless you are really a risk taker as your handle suggests... I wouldn't touch them with a 10 foot pole if I were you.

i have not taken that risk yet and it's never been an option but i'm very much interested with your inside information. thanks

sandrn

June 3rd, 2007, 08:46 PM

Foreign banks 2006 profits jump 37.7%
05/27/2007 | 06:11 PM
http://www.gmanews.tv/story/44029/Foreign-banks-2006-profits-jump-377

Foreign banks in the country sustained record-high profits in 2006 from trading government securities amid declining interest rates and from high-margin but low-risk consumer lending.

The annual report submitted by the Bangko Sentral ng Pilipinas (BSP) to Congress revealed that foreign banks yielded a net income after tax (NIAT) of P12 billion, up 37.7 percent from P8.7 billion in 2005.

The BSP detailed this in the Annual Report on the Implementation of Republic Act No. 7721 (An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes).

The BSP said in the report that strong trading gains allowed banks to rake in profits as well as the resumption of lending activities.

The BSP said the general decline in interest rates on debt securities and the substantial foreign exchange transactions translated to huge trading income, which soared by 180.6 percent and propelled the industry's non-interest income by 48.3 percent.

On the other hand, the BSP said the fee-based income of foreign banks grew by 12.2 percent and contributed almost P1 billion to their non-interest income.

Meanwhile, the BSP said interest income from lending rose more modestly by 8.5 percent or P3.9 billion attributable to the growth in foreign bank lending.

But investment dropped faster during the period and together with the increase in interest expenses due to rising deposit liabilities, the overall net interest income grew by only 5.9 percent for the whole of 2006.

For the year, the BSP said the operating expenses of foreign banks rose by 18 percent or P4.9 billion due to higher provisioning for probable losses which led to a 37.2 percent increase along with the 14.4 percent increase in other operating expenses.

Across foreign banking groups, the BSP said new foreign bank branches were consistently the most efficient in their operations, posting the lowest cost-to-income (CTI) ratio of 45.8 percent, down from 46 percent in 2005.

The four original foreign bank branches were second with a CTI ratio of 58.2 percent (down from 56.7 percent) while foreign bank subsidiaries posted the highest CTI ratio of 96.3 percent (up from 89.9 percent).

In comparison, the CTI ratio of domestic banks was recorded at 68.7 percent.

The BSP said the total resources of foreign banks were also at an all-time high of P647.5 billion, rising by 11.5 percent, principally funded by deposit liabilities and channeled primarily to loans and cash and due from banks.

Loans grew by 25 percent in 2006, the BSP said, supported by expansion in the industry's credit exposures to all economic activities except manufacturing and utilities.

The BSP said the financial intermediation sector was still the biggest beneficiary of foreign banks' loans where lending soared by 44.7 percent. The share of community, social and personal services lending also increased to 15.6 percent, overtaking the manufacturing sector whose share fell to 13.8 percent.

On the other hand, the BSP's annual report on foreign banks said the industry's non-performing loans dropped to 1.4 percent of their total loan portfolio as a result of improvements in credit risk management and asset clean-up.

On the whole, the BSP said the NPL of foreign banks fell by 28.3 percent. - GMANews.TV

kiretoce

June 13th, 2007, 09:46 PM

Bank wants bigger share of rich Pinoys (http://www.sunstar.com.ph/static/ceb/2007/06/14/bus/bank.wants.bigger.share.of.rich.pinoys.html)

A universal bank is capitalizing on the Philippines’ growing market of “mass affluent customers” as it intensifies its wealth management service.

Hong Kong and Shanghai Banking Corp. (HSBC) Philippines president and chief executive officer Mark Watkinson said there are about 200,000 individuals in the Philippines who belong to the mass affluent market and they are the focus of HSBC’ redefined Premier, a global wealth management service.

Watkinson, during the launch of the new Premier, said the mass affluent market are people who are “open-minded and future-oriented, well traveled, modern, unpretentious yet ambitious, and see the world as full of opportunities to learn, grow, and get the most out of life.”

He said this market has liquid assets of $100,000 to $2 million. “There are around 200 million in this segment around the world,” he added.

Freedom

“While the affluent still value being recognized as important individuals, they no longer pursue wealth just for wealth’s sake but as an enabler to have the freedom and time to enjoy the things that matter in life like good health, knowledge, family and life experiences,” Watkinson said in a statement.

Because of this, he said the mass affluent demand for a comprehensive wealth management service that will take care of their finances wherever they travel.

This is why the bank has redefined HSBC Premier, a global wealth management service providing personalized assistance with the help of the bank’s “relationship managers.”

The enhanced Premier allows customers to take their bank accounts and credit history wherever they choose to live and work.

It also allows customers to transfer their credit history when moving abroad, to obtain credit facilities in other countries.

“In the US for example, it is difficult to get credit if you have no personal track record. But with Premier, your credit information is sent to the bank so you can have access to mortgage (and) loans, (among others),” Watkinson told a press conference last Tuesday at the Marco Polo Plaza Hotel.

Access

HSBC Premier customers are depositors who have accounts of at least $80,000 with the bank. They have access to their HSBC accounts through a single log-on online system, enjoy pre-approved loans for overseas property purchases subject to local regulations, pre-approved Premier MasterCard with waived annual fees and other privileges even while traveling abroad.

Clients also have access to round-the-clock worldwide emergency service, which can provide credit card replacement and emergency cash.

While other banks offer similar packages, HSBC Philippines senior vice president for wealth management Patrick Cheng said what is unique about Premier is that it “maximizes the use of international networks to help international clients.”

Cheng is optimistic that HSBC would get a good share of the mass affluent market in the Philippines because of the country’s strong economic boom.

“The market in the Philippines is more than ready because people want access to information. Filipinos are now globally inclined,” he said.

-TC-

June 21st, 2007, 06:16 PM

http://www.bworldonline.com/BW062207/content.php?id=021

Another merger in the offing...
China Bank to merge with Manilabank
Businessworld
June 22, 2007

Sy-led China Banking Corp. (China Bank) will merge with Puyat-led Manilabanking Corp. (Manilabank) for a purchase price that will be concluded after a 30-day due diligence. China Bank, a listed universal bank, has agreed to buy 87.51% of the subscribed shares of Manilabank, a thrift bank.

In a statement, Manilabank Chairman Luis Puyat said the rapidly changing landscape of the Philippine banking industry has made it tougher for smaller banks to compete. The deal is yet to be approved by the Monetary Board and the Securities and Exchange Commission.

"It was a difficult decision for the family to let go of a business we have painstakingly built over the years. In looking for a partner, we were attracted by China Bank’s capital strength, financial stability, loyal customers and sustained profitability. We are gratified that Manilabank will become a crucial part of China Bank’s plans to become a strong major player in the industry," he said.

Reopened as a savings bank in June 1999, Manilabank’s total assets stood at P10.2 billion, loans at P4.4 billion and deposits at P5.2 billion as of December 2006.

The merger will expand China Bank’s network of 155 branches by another 75 branches from Manilabank, on top of the ongoing three-year branch expansion program of China Bank.
Of the 75 Manilabank branch licenses, 41 are for Metro Manila and 34 are for provincial areas.
However, only 27 are operating.

China Bank’s net income of P3.54 billion last year represented a return on stockholders’ equity of 15.93% and a return on assets of 2.47%. Its capital adequacy ratio of 28.35%, adjusted for credit risk, continues to be among the highest in the industry.

It said this places the bank in a position to pursue its three-year plan of accelerated loan growth and branch network expansion and comply with Basel 2, while providing satisfactory returns to shareholders through cash and stock dividends.

Peter S. Dee, China Bank president and chief executive officer, said the bank’s three-year business plan calls for an aggressive expansion of its distribution network, together with substantial growth in assets and loan portfolio.

"This acquisition will boost our branch network substantially to over 250 branches, including the expansion program we already started even before this deal," he said.

"With a bigger footprint and network through which we can sell and distribute our full range of products and services, we are now in a better position to compete more effectively with the bigger competitors in the banking industry," he added.

"We consider this deal a strong recognition of the inherent strengths of China Bank and the strong future that this combination of resources would mean for our combined client base," China Bank Vice Chairman Hans T. Sy said in a statement. Yesterday, China Bank shares closed 1.1% higher at P915.

-TC-

June 21st, 2007, 06:27 PM

This has been a very good and popular investment product for my clients...

http://www.bworldonline.com/BW062207/content.php?id=051
Central bank defends liquidity mopping tack

By Ma. Eloisa Calderon
Businessworld
June 22, 2007

The domestic capital market is supported by still-abundant money supply in the financial system, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said in a mobile text message to reporters yesterday.

He contested claims that the central bank’s special deposit facility has drawn investors away from other investment instruments.

Market players earlier called for a reversal of the BSP’s move to widen access to special deposit accounts (SDAs).

They argued that the facility resulted in investors’ waning appetite for local securities and other investment instruments.

The central bank made the SDAs, formerly limited to banks, available to trust units and state firms since May 10 in a bid to mop up excess liquidity, which it cited as a key driver of inflation.

Enough in the system

Compared with the benchmark 91-day Treasury bill which is being traded in the secondary market for around 3%, the SDA instruments carry a rate of as much as 7.8% for the three-month tenor, making the latter highly
attractive to banks and trust units.

Monetary authorities earlier estimated that trust units alone manage around P800 billion worth of funds.

Latest data from the central bank showed that the new monetary tool has, so far, siphoned off P182.8 billion from banks and trust units as of May 25.
"There is ample liquidity in the system," Mr. Tetangco’s "text" message read.

"What we need to ensure is that the inflation outlook remains favorable so interest rates would continue to be generally low and stable," he added.

Up for review

The BSP chief, however, did not rule out the possibility that the concerns of the capital market would be tackled during a Monetary Board rate-setting meeting scheduled for July 12.

Mr. Tetangco said the monetary tool is up for review during the policy meeting amid developments in reserve money data, which point to slowing money supply growth.

Latest data from the central bank showed that reserve money — a narrower definition of money supply consisting of currency issue and banks’ reserve balances with the BSP (net of cash in the vaults of the Bureau of the Treasury) — slid to P775.28 billion as of May 25.

The amount was significantly lower than the P796.99 billion worth of reserve money posted a week after the mop up operations began.

Working

Increases in reserve money translate into a rise in domestic liquidity.

M3, which is the total amount of money in the economy, had been expanding at rates of over 20% in the five months to April. It posted a 26.3% growth from March’s 24.6%.

Mr. Tetangco, however, was confident domestic liquidity should have started to decelerate starting May.

"We’ll look at M3 in our next policy meeting. The expectation is for it to decelerate," he said.

"Reserve money has gone down, so it means [the SDA] is working," he added.

lazybum

June 23rd, 2007, 05:58 AM

John, A little over ten years ago when I was working with The World Bank, we did an analysis of the real estate market and lending practices in the Philippines. At that time, the economy was doing well under the Ramos presidency, and the real estate market was appreciating fast. Given that rosy scenario, government agencies that were lending and providing guarantees had large portfolios of non-performing loans. The foreclosure process then (I don’t know the current practices) was very cumbersome. The system allows the foreclosed borrower one year of redemption period – a loooong amount of time for a non-performing loan to sit idle in one’s books. When I shared with a developer how the U.S. lenders do their foreclosure process, where the property is acquired by the bank in less than 120 days, the comment to me was, “masyadong malupit kayo.” On the personal side, my wife’s uncle, who was a councilman at the time, had been delinquent with his loan for over three years, and no one from the bank has sent him a notice of default. Obviously, there was inefficiency in the system.

Another difference we noted is the way Philippine banks look at non-performing loans in their portfolio. In the U.S., the bank’s objective is to get rid of non-performing asset as quickly as possible by giving it a haircut, sometimes selling assets 50 cents to a dollar, if necessary. Thus, the need for more reserves. The Philippine counterpart is not so willing to realize that loss in the balance sheet. There is cultural belief that property value cannot go below the original value when the loan was created. This is similar thinking in Japan. So instead of getting non-performing assets off their books, they wait for the value to rise – per market demand.

Another cultural difference is the way loans are underwritten. The U.S. lending practices is probably 25 years ahead of the Philippines, where loans are bundled, sliced and diced into securities (Mortgage-Backed Securities) for investors with different appetites for risk. This means loans must be originated with uniform documentation, standard underwriting practices, etc. In the Philippines, we found multi-million peso loans originated with no documentation – all done with a handshake. In a country where your face is more important than your signature, the handshake will do just fine. After the break-up of the Soviet Union, a lot of Americans went in to invest and lost their shirts because they lacked understanding of this cultural difference. The American placed a higher trust to the value of the pen, instead of the value of the person using the pen. Unfortunately, loans originated with a handshake do not have value if the lender wants to sell it to the secondary market.

In summary, what works for one country will not always work for the other. We just need to understand the differences and find commonalities that will allow us to work together efficiently.

Hello Rene,

I just want to share my observation to add to your very well-written analysis of lending practices in the Philippines.

Sometimes I find it amusing everytime I read or hear financial people (from both private and government institutions alike) talk about sound economic fundamental this or good lending fundamentals that. Frankly, I am not sure if they are just repeating their favorite corporate mantra. However, your first hand knowledge of how Philippine banks handle non-performing loans in their books, I thought was very interesting.

I do have a slightly diffrent take on this matter though. I think that to some extent, the lending practices in some of these Philippine banks is a reflection of the greater socio-political realities in Philippine society (ex. padrino system) where bank customers are treated differently depending on their socio-political status.

My ex-father in-law who is a third generation Irish told me that during his time, local banks in his town do practice preferential treatments of their customers also. But thank God, this is now a thing of the past, and as you know, the U.S. financial institutions belong to one of the most regulated industry on the planet - but IMO, it is a good thing as there is more transparency now in how they do business. Maybe it is time that the Banko Sentral Ng Pilipinas starts overhauling the lending practices in the country.

But you are right, U.S. banks are able to execute different vehicles to raise money and spread risks across a wide spectrum in such a manner that is so transparent to its customers.

Somebody mentioned Lorenzo Tan in this thread - Lorenzo is a former colleague of mine during my Citicorp days and he can tell you that during the time we where there, we have also seen a multi-million dollar loan commitment written on a piece of napkin...of course the customer was Donald Trump...and that is the rest of the story...

pushstars

June 23rd, 2007, 01:06 PM

Dvorak

July 3rd, 2007, 05:17 AM

may balita naba sa implementing rules nitong bagong batas na ito?? kelan kaya i o offer nang mga banko ito??

Lahat ba nang banks mag o offer nito?? Or thru SSS / GSIS lang ito??

================

Explanatory Note:

About 6.2 million Filipinos or 20% of the country's total labor force are not covered by any type of retirement plan. This segment of the population is thus deprived of the privilege of enjoying security in their retirement years. As of December 2000, only about 23.22 private or self- employed employees are members of the Social Security System (SSS) and another 1.7 million government workers are covered by the Government Service Insurance Funds administered by the Government Service and Insurance System (GSIS).

Savings accounts can not be depended upon to provide financial security to these Filipinos since most families barely make both ends meet and are thus not able to save very much. Moreover, retirement or pension plans being offered by pre-need companies are quite expensive and can only be afforded by high salary earners. A savings scheme is thus needed to encourage the majority of Filipinos to save for their retirement years. The Personal Equity Retirement Account (PERA) is a form of savings scheme that will help improve the country's savings rate, : which is one of the lowest in the region.

The bill provides that contributions made to PERA per taxable year shall be 100% deductible from the taxable income of the contributor I subject to certain conditions. This aims to encourage more people to invest their money in PERA. This scheme is similar to the US experience wherein savings of up to $2000 in mutual fund are tax deductible as Individual Retirement Accounts (IRA). This paved the way for mutual funds in the US to reach $2.5 trillion in 1996 from $50 million in the 1970s prior to the IRA. In Singapore, employee contribution to the Central Provident Fund (CPF), which amounts to 25% of employee income, is also tax-free. The CPF not only serves as pension fund for Singaporeans but is also use by members for other purposes such as housing. The amount of the CPF allows the government to finance infrastructure projects such as roads, airports, seaports, mass transport and high rise public housing.

Non-members of government insurance funds can avail of PERA. Those with very limited retirement plan options are especially targeted to invest in this scheme. Investors will be allowed to keep tract of their funds and even directly manage their PERAs as an investment portfolio.

Through PERA, Filipinos can prepare for and enjoy their retirement years. They are assured of a financially secure future. The bill will also facilitate an increase in savings because funds deposited to the PERA can be invested in securities including ordinary shares of stock. It will also offer facilities to move funds to high investment levels and take advantage of prevailing market conditions. This means more funds will be available for investments to spur economic growth.

smokingunmanila

July 3rd, 2007, 06:01 AM

it's about time that the government should implement compulsory retirement plans.

Arkdriver

July 3rd, 2007, 06:29 AM

Dvorak

July 3rd, 2007, 06:43 AM

We have SSS for employees in the private sector and GSIS for the government employees.

For SSS, 10% (split to 6.67% employer and 3.33% employee shares) of the salary bracket (highest is at 15T, so 1,500.00 a month lang maximum contribution), masyadong mababa para maging retirement fund..

smokingunmanila

July 3rd, 2007, 07:21 AM

dapat kasi meron din yung non-taxable savings until retirement ...like mutual funds etc...eh sa SSS hindi naman lumalaki savvings mo..pension na hindi kamabubuhay nun ehh...

pero the way I see it....the minimum wage is not even enough for peopleto save in their retirement...I think...the minimum wage should be increase to 500/day...but of course...the demand will be there for better education and efficiency ng mga employees...

Dvorak

July 3rd, 2007, 07:26 AM

ayus nga yang PERA pag na implement.. coz it's 100% tax credit.. so imbes na bayad nang bayad nang tax na wala namang napupuntahan.. eh sa savings na lang napupunta.. pwede mo pa pakinabangan..

minimum of 50T per year ang investment dyan sa PERA.. withdrawable at age 55, tax free with interest.. so kung 20 years ka mag huhulog eh that's 1M sa principal pa lang.. eh interest pa..

tapos they allow emergency withdrawals (subject to 20% tax), for medical, schooling, housing purposes.. ayos na din.. kesa naman bayad lang nang bayad nang tax.. ang mahirap kasi yung mga fixed salary earners eh walang kalaban laban sa income tax.. di katulad nang mga professionals, businesses, self-employed, na ang daming tax shields..

Dvorak

July 4th, 2007, 04:21 AM

40K lang pala maximum annual contribution.. pag individual eh 20K lang.. eh halos pareho lang nang SSS yun ahh.. 18K maximum annual sa SSS eh..

AN ACT
TO ESTABLISH A PROVIDENT PERSONAL SAVINGS PLAN KNOWN AS THE
"PERSONAL EQUITY AND RETIREMENT ACCOUNT"

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Title. - This Act shall be known as the "Personal Equity and Retirement Account (PERA) Act of 2001."

SEC. 2. Declaration of Policies. - It is declared the policy of the State to promote and encourage individual and personal savings, investments and retirement plans supported by government incentives.

SEC. 3. Definition of Terms. - For purposes of this Act, the following terms are defined as follow:

a) Retirement Account or the Trust refers to the trust created or organized by an individual, known as "trustor", for his exclusive use and benefit upon and during his retirement, in which said trustor retains only the equitable ownership of the funds he deposits therein as savings, as well as in the income thereof from investments of said fund;

b) Trustee is a bank accredited by the Bangko Sentral ng Pilipinas (BSP) designated by the trustor to administer and manage the retirement account and hold legal title to the trust until the retirement of the trustor or the termination of the trust as provided in this Act;

c) Trustor is the contributor or depositor to the fund creating or organizing a retirement account, as well as the funds annually or regularly increasing and augmenting the deposited capital as authorized under this Act;

d) Year means every taxable year under the National Internal Revenue Code;

e) Notify means to send notice in writing;

f) Portfolio refers to the record or list of investments made by the trustee for and in behalf of the trustor;

g) Tax refers to the income tax as defined under the National Internal Revenue Code;

h) Penalty means the sum to be paid by the individual contributor for early withdrawals of any part of the account held by the trustee-bank;

i) Tax Code refers to the National Internal Revenue Code;

(j) Beneficiaries mean all the heirs and assigns who shall succeed to all the rights, under the law, acquired by the contributor in and through his retirement account.

SEC. 4. Opening of Retirement Account. - An individual person of legal age may create, organize or open a retirement account with a trustee, or a bank accredited by the Bangko Sentral ng Pilipinas, with an initial deposit or contribution of not more than Twenty thousand pesos (P20,000.00).

A married couple may create, organize or open a joint retirement account with an initial deposit of not more than Forty thousand pesos (P40,000.00).

No individual or married couple may open a joint retirement account with an amount more than what is required under this Act.

SEC. 5. Qualifying Investment Rules. - Funds deposited in a retirement account shall be qualified for investment only in

(1) securities including ordinary shares of stocks, not being shares in an investment trust, issued by a company which is incorporated in the Philippines and quoted in the official list of a recognized stock exchange in the Philippines or dealt in on the unlisted securities market; or

(2) cash which the trustee is entitled to hold for investment under the rules of the account.

SEC. 6. General Investment Rules. - Investment of funds held in the retirement account shall observe the following rules:

(1) All transactions, whether by way of sale, purchase or otherwise, handled by either the trustor himself or the trustee-bank, shall be made at the price which those investments might reasonably be expected to fetch in the open market;

(2) Investment made by a trustor shall be supervised by the trustee;

SEC. 6. General Investment Rules. - Investment of funds held in the retirement account shall observe the following rules:

(1) All transactions, whether by way of sale, purchase or otherwise, handled by either the trustor himself or the trustee-bank, shall be made at the price which those investments might reasonably be expected to fetch in the open market;

(2) Investment made by a trustor shall be supervised by the trustee;

(3) A trustor's cash contribution and any other cash by way of interest, income and others held by the trustee shall be held in pesos and other legal tender in the Philippines and deposited in the account of the trustor;

(4) The trustee shall account for any amount representing income, penalties and taxes applicable on the contribution of the trustor in accordance with the provisions of this Act and the National Internal Revenue Code;

(5) Investments may be only by way of cash or shares of stocks;

(6) An investments portfolio shall be presented to the trustor by the trustee whenever necessary;

(7) No part of the trust fund shall be invested in life insurance contracts; and

(8) The trustee shall notify the trustor of every investment made and income earned on the letter's behalf.

SEC. 7. Maximum Annual Contributions. - The maximum annual contribution or deposit of capital to a retirement account shall in no case be more than Twenty thousand pesos (P20,000.00) in the case of an individual trustor or Forty thousand pesos (P40,000.00) in the case of a married couple.

SEC. 8. Income Tax Deductibility. - The contributions made per taxable year shall be One hundred percent (100%) deductible from the taxable income if they fall within any of the following qualifications:

(1) An individual member or any or both of the working spouses are not covered by an employer-sponsored retirement;

(2) Both spouses are covered by an employer-sponsored retirement plan, but their joint adjusted gross income is Three hundred thousand pesos (P300,000.00) or less and One hundred fifty thousand pesos (P150,000.00) for individuals; and

(3) Only one spouse is covered by employer-sponsored retirement plan but the combined adjusted gross income is not more than Three hundred pesos (300,000.00).

SEC. 9. Benefits Upon Retirement. - No tax shall be imposed and collected from funds withdrawn from a retirement account created or opened at least five (5) years earlier by any trustor who has reached the age of fifty-five (55) years.

All interest of a trustor in a retirement account and/or funds withdrawn from said account shall not be subject to levy on attachment or execution as security or for the satisfaction of any judgment against the trustor or his spouse.

SEC. 10. Tax on Early Withdrawals. - If any withdrawal is made from a retirement account before the retirement benefits vests in favor of a trustor as aforestated, a tax equivalent to twenty percent (20%) of the amount withdrawn it part of the income of the retirement account, or ten percent (10%) of the amount withdrawn if part of the principal amount deposited, shall be imposed on the withdrawal: Provided, That no tax shall be imposed on any withdrawal of any fund -

(1) used toward the purchase of a first family home for the trustor himself or for any member of his immediate family;

(2) used to pay for certain qualified college expenses;

(3) used to pay for medical expenses;

(4) for a trustor who has been disabled or otherwise become physically incapacitated to earn income for his subsistence; and

(5) the member has become unemployed for a period of at least three (3) months and uses the money to put up capital for small business.

SEC. 11. Separability Clause. - If any provision or part hereof, is held invalid or unconstitutional, the remainder of the law or the provision not otherwise affected shall remain valid and subsisting.

SEC. 12. Repealing Clause. - Any law, decree, order, rules and regulations or part thereof which is inconsistent with this Act is hereby repealed or modified accordingly.

SEC. 13. Effectivity Clause. - This Act shall take effect after fifteen (15) days following its publication in the Official Gazette or in two (2) newspaper of general circulation in the Philippines whichever comes earlier.

Approved,

NOTE: CONSOLIDATED INTO HB#6001

jgacis

July 4th, 2007, 05:13 AM

^^ Interesting. A government-sponsored defined-contributions retirement plan for filipino citizens.

The most important aspect of this (if it will allow the masses to start investing) is EDUCATION. How will the person know which investment securities are best for him/her? Everyone has their own risk tolerance and needs, so I forsee more finger-pointing if this program doesn't address educating the masses about these investment securities. Here in the states, 401k plans had some legal problems a couple of years ago because people were complaining not being informed adequately of their investments (which many saw their portfolios drop significantly). How much more problems would this cause for filipinos where the majority don't even know how to save, yet alone invest... :ohno:

Can the trustor let a fund manager (trustee) do the investing for him/her?

Is there any sort of "prospectus" for these investent securities? This would provide at least some sort of financial transparency. What are the legal liabilities for both parties if a matter needs to be addressed?

This is like a 401K plan or mutual fund here in the U.S.A.

The big difference in the Philippines though is that investment securities in the Philippines are regulated differently and have different equity-risk factors among financial institutions there when compared to the states. The American SEC (Securities Exchange Commission) is very strict in financial transparency among U.S. corporations, and the Federal Reserve Bank provides the necessary cohesion to balance our economy (via rate adjustments and capital liquidity for banks). Our pension plans are also watched/monitored by the FTC (Federal Trade Commission) and regulated by state and federal laws.

I hope the Philippines learns to develop their financial infrastructure in a smart/progressive way.

I say this program is good, but the financial infrastructure in the Philippines still needs to improve (like a reliable credit-rating system for all filipinos) before it starts implementing programs such as these....

kevinb

July 6th, 2007, 05:02 AM

PNB, Allied Bank merger a ‘done deal’
Banks just waiting for SC decision on ill-gotten wealth suit

By Michelle V. Remo

Philippine National Bank and Allied Bank, both controlled by taipan Lucio Tan, have agreed to merge.

PNB president Omar Byron Mier told reporters that officials of PNB and Allied Bank have reached an agreement that a merger would be beneficial to both banks as this would create a much stronger bank.

Mier said the only hurdle to the merger was the pending legal dispute between Allied Bank and the government, which is running after a block of shares held by Tan in the belief that it was ill-gotten.

The Supreme Court ruled earlier that the shares being questioned were owned by Tan, but the government challenged this with a motion for reconsideration.

Mier said the planned merger could not push through until the Supreme court has decided on the motion for reconsideration.

“Between the two banks, the merger is already a done deal. But we don’t know how long it will take the Supreme Court to make a decision,” Mier told reporters in an ambush interview.

The PNB official said the two banks were already in the process of discussing the terms of the merger, which he said could be done immediately after the Supreme Court issues a ruling.

He said the banks would consult their stockholders as to who should be the surviving entity. But Mier added that the merging entity would not drop the “Philippine” and “National”, saying no bank is likely to ever again get such a name that is representative of the country.

PNB is the country’s sixth-largest bank in terms of assets, and a leader in servicing overseas Filipino workers with the huge volume of remittances sent through it.

On the other hand, Allied is a commercial bank whose services are geared mainly at affluent Chinese-Filipino customers.

A merger between the two banks will create the fourth-biggest bank in the country in terms of assets. As of the first quarter, combined assets of the two banks were estimated at P397.3 billion.

PNB earlier announced that it has paid the P6.1 billion worth of outstanding liabilities it had with Philippine Deposit Insurance Corp., formally completing its rehabilitation program.

PNB went under a rehabilitation plan in late 2000 due to liquidity problems. PDIC extended a P25-billion financial assistance to the bank to cover huge withdrawals.

Mier said that following its exit from rehabilitation, PNB’s goal now was to sustain growth in its income and improve its return on equity to between 15 and 20 percent.

In the first quarter, PNB reported a net income of P308.3 million, 60 percent higher than that of the same period last year. PNB targets to hit a net income of P1 billion this year, Mier said.

The PNB president said the bank has about P12 billion worth of non-performing loans, translating into an NPL ratio of 10.8 percent. He said the bank expects to sell anywhere between P4 billion and P5 billion worth of NPLs this year to reduce its NPL ratio to a single-digit level.

Philippine Daily Inquirer
Business Section - B2
July 5, 2007

kiretoce

August 7th, 2007, 01:27 AM

Self-service banking gaining interest from major RP banks (http://www.mb.com.ph/INFO2007080799561.html)

Self-service banking is slowly but surely getting interests from major Philippine banks, which are continuously looking for ways to improve customer service and increase revenue streams, banking solutions company NCR Corp. said.

NCR executives from the Asia Pacific region in a banking conference in Singapore also said self-service banking goes beyond transactions that are conducted over the ubiquitous automated teller machine (ATM).

While the Philippines may lag behind its more affluent Asian neighbors which are heavily into technologies that support self-service banking, major Philippine banks including BPI, Banco de Oro, MertroBank and Chinabank, among others are now studying ways to improve their services through self-service banking, NCR said.

Servillano H. Batac III, NCR Philippines country manager for financial solution division, said one of the key problems of major local banks is queuing, which he said, can be eliminated by self-service kiosks that offers more than the usual banking transactions such as withdrawals, account balance, and to some extent, deposits.

"Queuing has always been one of the major problems that local banks have to deal with. But there are solutions that can eliminate queuing," Batac said.

The executive said local banks are looking at "intelligent" ATMs as a means to address the problem of queuing.

Intelligent ATMs, according to NCR, will cater to customer requirements and services beyond those that are delivered to the usual ATM.

These services include local language support, 24 hr. availability, location, and privacy.

NCR said along side these services, intelligent ATMs will also handle bill, credit card, loan repayments, and a host of more complex customer relationship management services.

Self-service banking and intelligent ATMs will also virtually extend banking hours, although NCR emphasized that these solutions are not designed to replace traditional person-to-person banking.

Intelligent ATMs will also be able to determine customer preferences and in the course of an ongoing transaction, can offer a wide variety of bank services and run advertising campaigns for the bank.

NCR said for example, an intelligent ATM can ask a customer "Would you like to receive your bank statements by e-mail?"

But Batac said the mass adoption of self-service banking, as well as intelligent ATMs will "take time," particularly in a market such as the Philippines.

The executive said some of the services offered by intelligent ATMs for example will need regulatory clearances, particularly in the area of security and privacy.

"The good thing is Filipinos are willing to adopt," Batac said, noting that the adoption of ATM cards also took significant time before being embraced by the mass market.

Batac further said NCR will soon release a host of self-service solutions on a region-wide basis, although plans for the rollout of these products and services, remain under wraps.

portludlow

August 22nd, 2007, 07:20 AM

Local banks have no exposure to subprime assets –

http://www.abs-cbnnews.com/storyPage.aspx?storyId=89135
By DES FERRIOLS
The Philippine Star

In the wake of the panic over the US subprime credit market, the Bangko Sentral ng Pilipinas (BSP) said it has examined the exposure of banks in similar instruments and found only insignificant amounts in collateralized debt instruments as a whole.

BSP Governor Amando Tetangco Jr. told reporters over the weekend that the banking industry’s minimal exposure in collateralized debt obligations (CDOs) accounted for only 0.2 percent of its total assets.

CDOs are a type of asset-backed security and structured credit product that gain exposure to the credit of a portfolio of fixed income assets.

CDOs divide the credit risk among different tranches: senior tranches (rated AAA), mezzanine tranches (AA to BB), and equity tranches (unrated).

According to Tetangco, the banking industry’s CDO portfolio consisted only of senior and mezzanine tranches and no subprime assets.

"We didn’t find any exposure in subprime assets," Tetangco said. "The CDO assets currently held by banks are A-rated and higher, indicating no risk of a direct impact on the banking sector."

Monetary officials have been trying to calm the market, saying that the fall-out from the problems in the US credit market is likely to have only a minimal impact on the Philippines.

Tetangco said the BSP is expecting only an indirect impact and since the market had sufficient domestic liquidity, this would limit the effects of the global selloff spurred by jitters over the US subprime market.

"More fundamentally, the increased availability of longer term funding in pesos has also reduced the country’s vulnerability to adverse external market developments," Tetangco said.

Central banks in Asia have made moves to inject extra cash into banking systems to join the global effort by monetary officials to calm the panic in the credit markets.

Tetangco said that because there was ample liquidity in the system, the BSP had less need to do this than other central banks, particularly the European Central Bank which pumped a record amount of cash into Europe’s money markets to make sure that their banks had adequate short-term funds.

The market has been spooked by fears that the fall-out from the meltdown in the US subprime market would be worse than originally projected.

Although Asian economies have grown less dependent on the US economy for growth and momentum, experts nevertheless said the crisis in confidence in the US subprime market would continue to be felt across markets in Asia.

Lili

August 22nd, 2007, 08:03 AM

Oh my. Good to read this thread. I found out from @Rene Ybardolaza's posting that there is a one year redemption period for foreclosed properties. My sister and I have been meaning to buy a foreclosed property in Pinas pa naman.

My question is, given that the banks hold on to these repossessed properties for quite some time instead of selling these "non-performing assets" right away, would it be safe to assume that once they have foreclosure sales that the one year redemption period has already lapsed?

Also, I think it is not only a "cultural belief" that "property value cannot go below the original value when the loan was created" because experience has shown that real property prices always go up in the Philippines. Am I wrong to presume that?

Anyway, on @portludlow's posting, it's good to know that the subprime mortgage fiasco here in the US has no direct risk impact on the banking sector of the Philippines. It remains to be seen how things will pan out based on its indirect impact. But this posting may assuage some fears about the stability and liquidity of the Philippine banking sector.

Rene Ybardolaza

August 24th, 2007, 02:59 AM

Lili, I don't think the bank will or can sell a property that hasn't been through its one year redemption period. During that period, the borrower can bring that loan current by just paying the delinquent amount. That would leave someone like you in a very difficult situation if you bought a bank-owned (?) property that suddenly became current.

One challenge that I don't have any knowledge of in the Philippines is the eviction process. Here in California, when a delinquent borrower refuses to leave his home after being served notice by the bank, the Sheriff takes over and locks the borrower out of his house. After the lockout, if he cooperates, he is given a day to move his household items. At that time, that's when an angry and vengeful borrower gives the bank a few licks by kicking a few holes on the wall, rip out appliances like air conditioners, destroy pool pumps and uproot the remaining vegetation.

Lili

August 24th, 2007, 03:14 AM

^^ Thanks for the clarification @Rene.

Funny snippet on an angry evictee's way to get back at the bank.

I would presume that the bank takes care of the eviction proceedings in a foreclosed property so that the new buyer can take possession of the property free of prior occupants or any other claimants?

Rene Ybardolaza

August 25th, 2007, 04:42 PM

^^

I sure hope so..... a pissed off Pinoy will most likely have a gun and I wouldn't want him taking pot shots at me while I'm hauling my sofa into his recently foreclosed house. :lol:

kiretoce

October 1st, 2007, 04:31 PM

More Filipinos join ranks of banks’ well-heeled clients (http://business.inquirer.net/money/personalfinance/view_article.php?article_id=91834)

MANILA, Philippines – If you have $80,000 (P3.6 million) to play with, why not join a growing group of well-heeled clients that banks like HSBC, Citibank, Standard Chartered and Bank of the Philippine Islands woo? No need to line up, miss lunch to check up on your portfolio, or pay remittance fees to move funds from one country to another. Chances are, the branch manager would even buy you pizza as you wait for your checks to be prepared.

In the Philippines where half of the population lives below the poverty line, growing this clientele base would at first seem tough. Not quite, say some bankers who work in the wealth management industry.

Nicholas Winsor, head of HSBC’s personal financial services in the Asia-Pacific, says the British bank has seen a compounded 25 to 26 percent growth in this area for the last couple of years. He expects continuous growth in the coming years, in tandem with the bank’s consumer banking services, as disposable incomes rise, with special facilities in as far as Davao in Mindanao.

“We are seeing a regional shift in focus from traditional savings to mutual funds, tax planning and equities investments through managed funds,” Winsor said.

Citibank’s Judith Go, wealth management director for Citigold, says Citibank also continues to attract high net worth individuals and manages a growing portfolio.

Wealth management is not the same as private banking – a service most global banks offer to the wealthy elite that includes portfolio management and wealth planning. It’s a notch below, and aims to eventually graduate clientele to private banking.

Citibank and HSBC both offer personalized services – no cookie cutter type of financial advice. Instead, there are specialists assigned to individual clients to determine risk profiles, sophisticated software to determine investment strategies, research information not just on Philippine markets but also global markets, and travel rewards systems among others.

“When the unit investment trust fund market experienced some volatility, we were the least hit among all industry players, as our Citigold clients were prepared for such an eventuality and knew that the market correction will not affect their long-term gains,” Go said.

Winsor says financial advisors focus more on relationships rather than the transaction, to attract the kind of clientele for whom they have designed wealth management products.

On top of these perks, some clients said they liked the prestige that goes with being a wealth management client. “We get better rates too,” said two entrepreneurs who requested not to be named.

Despite the growth, however, the Philippines is still not be in the league of Hong Kong, Singapore, Taiwan and especially China where the number of well-heeled clients shot up in the previous years.

“In other markets like Singapore, Korea, Taiwan, HSBC’s focus is much more on the wealth business, even accounting for 50 percent of the bank’s income. But in the Philippines, I see more of a balance between wealth management opportunities and consumer banking. I see both growing,” Winsor said in an interview.

It’s also a good way to grow your career, especially if you are a certified public accountant, but a CPA is definitely not a requirement, Winsor said.

“Our financial advisors are very trained and well-paid. They are from all walks of life, often from the best universities and often wealthy in their own right,” he said.

-TC-

December 1st, 2007, 07:21 AM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=104182

DBP offers hedging facility to OFWs
By Doris Dumlao
Inquirer
Last updated 05:32am (Mla time) 12/01/2007

MANILA, Philippines -- The state-owned Development Bank of the Philippines is offering a facility to help overseas Filipino workers (OFWs) and their households to hedge their foreign currency earnings against the sharp rise of peso against the US dollar, the central bank said.

“We have approved the DBP’s hedging facility for OFWs,” Governor Amando Tetangco Jr. of the central bank, Bangko Sentral ng Pilipinas, told reporters.

Tetangco said the Monetary Board had authorized DBP to offer various derivative instruments such as US dollar non-deliverable forward contracts, US dollar and peso currency options, and US dollar outright forward contracts.

A derivative is a sophisticated financial instrument whose value is derived from the value of an underlying good or index, like the exchange rate, interest rate or stock prices.

A forward contract is an agreement to buy or sell a specified amount of foreign currency at a specified exchange rate and is settled at a specified future date. A non-deliverable forward contract does not require actual delivery of the currency, and only the differential is paid upon maturity. An option is a right to buy or sell a particular commodity at a specified price within a set time.

“It’s an expansion of the hedging facility we offered exporters, [this time] to help OFWs,” said DBP president Reynaldo David.

DBP plans to market the hedging instruments through the manning agencies that deploy Filipino workers abroad.

The state-owned bank’s outstanding hedging contracts with exporters now amount to about $200 million, rising from scratch in October when the exchange rate broke into the level of P42 to the dollar.

sugarboy

December 1st, 2007, 09:11 AM

^^

I sure hope so..... a pissed off Pinoy will most likely have a gun and I wouldn't want him taking pot shots at me while I'm hauling my sofa into his recently foreclosed house. :lol:

@Lili/Rene, by the time a property is on the list of assets which the bank needs to dispose of, it is deemed that the 1 year grace period to redeem the property is over with, and the property currently titled in the name of the bank.

There was this situation recently wherein my wife and I spotted a good buy in Mandaluyong listed among the assets to be disposed of by a big bank. The property was already titled under the name of the bank and good to go so to speak. Upon meeting with the bank officer in order to discuss further details on the purchase, the officer disclosed a caveat in that a few days prior to our meeting, a case was filed by a former owner of the property versus the bank and the owner/borrower who had lost possession of the property to the bank. Hence, we would have to buy the property "at our own risk".

The good thing about it was that since my wife is a prosecutor in Mandaluyong, we easily located the case number and in which court the case was filed. After examining the docs, we felt that it was a "no-go" for us as the elements of the case pointed to a truly sticky situation.

As of last check, the property was taken off the list of assets to be disposed and after confirming with the officer, the Bank had decided not to put up the property for sale until such time that all legal hindrances were cleared.

laze

December 2nd, 2007, 09:51 AM

Hi folks,

I will be in Manila January 2008. How do I open a savings/checking account in either PNB or any local bank? What are the requirements for a former Filipino Citizen who do not have a permanent Philippine address? will be buying a condo hence the need for a bank account.

Thank you.

jgacis

December 31st, 2007, 01:28 AM

^^ You can open an account with your passport and home address (always check with the banks for their own policies and regulations).

I already did this with RCBC when I bought a condo in Makati, and I was not a former filipino citizen.

kiretoce

January 17th, 2008, 08:01 PM

Filipinos have low financial IQ (http://business.inquirer.net/money/breakingnews/view/20080117-113088/Filipinos-have-low-financial-IQ-says-bank)

MANILA, Philippines -- Lacking confidence that his savings can cover emergency needs or support a comfortable retirement, the average Filipino has a "financial intelligence" of only 47.8, less than half the maximum score of 100, according to Citibank.

The score was derived from the American banking giant's Fin-Q survey, a study across the Asia-Pacific designed to measure the financial quotient or financial intelligence of consumers aged 18 to 40, who have at least a bank account or a credit card.

The survey, whose main findings were released at a press briefing on Thursday, showed that 62 percent of Filipino respondents belonging to the middle-income working class had a score of less than 50.

The survey, administered online and conducted in the last quarter of 2007, polled 400 Filipino respondents across the country earning an average of P30,000 per month.

About 30 percent of the respondents were earning under P100,000 a year, while 34 percent belonged to the P100,000-P300,000 income bracket.

About 28 percent were earning more than P300,000 while 8 percent refused to reveal their income bracket.

"Based on the Fin-Q results, only oner out of 10 Filipino respondents is consciously saving up for this retirement. The rest have some savings but don't know if it will be enough. Others have no idea at all how much they need or have not started planning," said Agustin Davalos, Citibank Philippines' retail bank director.

"If they lost their jobs tomorrow, or suddenly fall ill and cannot work, their savings would last only for nine weeks (about two months) before they run out of money," Davalos said.

The benchmark for a comfortable buffer in case of a sudden sickness or loss of job is to maintain liquid savings equal to three to six months worth of current earnings.

The survey also showed that almost seven out of 10 Filipino respondents own insurance but only half of this number felt that the coverage was enough to protect them and their families.

Conducted by Australia-based CxC Consulting, the survey rated respondents on 11 different questions closely related to financial well-being, with a maximum possible score of 100 each -- much like grading a student based on performance on individual subjects like Math, Science or English.

The questions ranged from their optimism about their financial future to approaches to budgeting and saving to whether they have a formal financial plan and an up-to-date will.

The study also incorporated separate attitudinal and lifestyle questions. The better the financial position was in one particular area, the higher the points garnered.

In credit card payment patterns, for instance, a respondent who wipes out the entire credit card monthly debt (and thus avoids costly financial charges) gets the full 10 points while one who pays only a slightly higher amount than the required minimum payment gets 5 points. If he pays only the bare minimum, he doesn't get any point.

"If you look at the areas where we need to improve on, that would be the state of our financial savings, having a formal financial plan and having an up-to-date will, which in turn should also ultimately improve our satisfaction with our quality of life and our confidence in financial future," said Citibank research specialist Abby Chan.

"While the Fin-Q score may be disappointing, the good news is that more than half of the surveyed population believes in the importance of saving.

The problem lies in having the discipline to do so, which could be due to lack of resources or financial know-how," Davalos said.

The survey also reflected Filipino's sunny outlook, as 64 percent said they were satisfied with their current quality of life and 77 percent were optimistic about their future.

"But it's telling to see that you have 36 percent who said that they are not satisfied (with quality of life) and these are probably the people who sort of dragged down the Philippine score in this area," Chan said.

"When we grilled down the people who are not satisfied, the saying that `money can buy happiness’ seems to work because those not satisfied are those who are significantly lower in terms of income, those who have not yet prepared for their retirement savings, and those who are not that secure about their current jobs," Chan said.

Raven83

January 21st, 2008, 04:34 AM

^^ That is not something new, add our religious practice in which keeping money is almost an act of selfishness, no wonder from a simple street level pinoy's to big corporations to our national government all have huge amounts of debts

red_jasper

January 25th, 2008, 08:49 AM

BSP poised to cut interest rates for 5th time in 6 mos

By Enrico dela Cruz
Thomson Financial
First Posted 13:57:00 01/25/2008

MANILA, Philippines -- The Bangko Sentral ng Pilipinas, the country’s central bank is expected to slash key interest rates for the fifth time in six months at its meeting next week.

But economists and analysts appear split on how far policymakers will go this time after the US Federal Reserve's emergency rate cut of 75 basis points this week to avert a recession in the US, the biggest market for Philippine exports and labor.

The widely-anticipated rate cut by the BSP on January 31 will be the third in three months and follows a quarter percentage point cut on December 20.

The closely-watched overnight rates now stand at 15-year lows of 5.25 percent for borrowing and 7.25 percent for lending.

Economists have been betting, even before US policy-makers' unprecedented intra-meeting cut last Tuesday, that the BSP would extend its easing bias until this year, given a strong peso, cooling money supply growth and the Fed's policy moves.

After announcing its aggressive policy measure to stimulate the economy, the Fed indicated Tuesday that further rate reductions were likely to encourage people and companies to start spending again.

The Fed holds its regular policy meeting on January 29-30, with another cut of 25 to 50 basis points on the cards, according to some economists. Read Full Article (http://business.inquirer.net/money/breakingnews/view/20080125-114766/BSP-poised-to-cut-interest-rates-for-5th-time-in-6-mos)

Weina

March 17th, 2008, 07:02 AM

Return to FATF blacklist for RP?

A SUPREME COURT decision requiring the need for notice and hearing prior to the issuance of bank inquiry orders could mean the Philippines being returned to a money-laundering blacklist, the Office of the Solicitor General said.

In a motion for reconsideration, Solicitor General Agnes VST Devanadera said: "Any legal structure that emasculates the Anti-Money Laundering Council from effectively pursuing its legal mandate ... creates serious repercussions to the country’s standing as a nation compliant with the international standards set forth by the Financial Action Task Force (FATF)."

"Worse, such global perception may revert the Philippines to the dreaded FATF list of Non-Cooperative Countries and Territories, a situation that needly causes prejudice to the country’s financial transactions, including those involving much valued foreign remittances of overseas Filipino workers from abroad," she said.

In a February 14 decision, the high court ruled that the AMLC could not "ex parte" inquire into the accounts of former Transportation Secretary Pantaleon Perez and Philippine International Air Terminal Co., Inc.’s Cheng Yong and his wife. Authorities had wanted to check the financial trail surrounding the Ninoy Aquino International Airport-Terminal 3 contract, which had been ruled as anomalous.

In simple terms, ex parte means a government agency can file an application to examine a bank account without having to notify the bank or client involved.

The high court noted that Republic Act 9194 or the Anti-Money Laundering Act, as amended, is silent on such. The law was only categorical on ex parte proceedings with regard to the issuance of freeze orders.

The OSG, acting in behalf of the AMLC, begged to disagree.

It said the law provides that "notwithstanding the requirements of the [Bank Secrecy Law] ... the AMLC may inquire into or examine any particular deposit or investment ... upon order of any competent court." This was the intent of the legislators when they drafted the bill to remove the Philippines out of the FATF blacklist, it said.

The law was created in 2001 in answer to the FATF assessment that the country was a dirty money haven. It was finally ticked off the list in 2005.

In having named the country as a "Non-Cooperative Countries and Territories", the FATF had noted that local bank records were protected by excessive secrecy provisions.

The law specifically answered this concern through ex parte proceedings, the OSG said.

"A prior alert to the account holder of an impending inquiry would result in the removal or concealment of the funds deposited therein," it said, adding that "The government would be dragged to a protracted litigation."

The high court decision, it said, opens the country up to "countermeasures" from other foreign governments. — IPP

Weina

March 17th, 2008, 07:08 AM

Gov’t planning to securitize P40-billion obligation to BSP

THE GOVERNMENT is planning to create a special purpose trust that will securitize the state’s obligation to fund the central bank.

Under the New Central Bank Act of 1993, the government was to provide P50 billion in capital to the Bangko Sentral ng Pilipinas, of which only P10 billion was forwarded.

Officials said the remaining P40-billion requirement — which should have been released in 1994 — now needs to be funded given central bank losses arising from foreign exchange fluctuations.

BSP Deputy Governor Diwa C. Guinigundo told reporters last week that the special purpose trust will allow the government to turn its P40-billion obligation into a financial instrument that can be sold to investors.

The proceeds will go to the Department of Budget and Management, which will give the central bank P4 billion yearly for 10 years until the P40-billion obligation is serviced.

As of November last year, the BSP posted a deficit of P62.46 billion. In particular, expenses arising from forex fluctuations hit P84 billion.

Mr. Guinigundo said the securitization of the government’s multi-year obligation could commence within the year. — GSDP

kc5169

March 18th, 2008, 06:48 AM

What they REALLY need here in the philippines is a credit rating system like what they have in the US. Gloria Arroyo was talking about implementing one. Without the credit rating system, loans are huge risks. Without the rating system is the reason why interest rates are extremely high and default loans are outrageous. In the US there are three of them, why can't there be one here? Does everyone know what a credit rating system is? If not i'll explain it.....

Weina

March 20th, 2008, 06:23 AM

Metrobank expects stronger loan growth
03/19/2008 | 08:07 PM

Metropolitan Bank and Trust Co. (Metrobank), the country’s largest bank in terms of assets, expects loan growth to hit 6% this year from 2007’s 5.17%.

"I think the loan growth will be in line with the growth of the economy," treasury group and corporate planning head Fernand A. Tansingco said.

"As we know, the economy is shifting right now because of the problems in the US and also the general shifts in sentiment, but I think we’ll outperform the economy."

The economy expanded by 7.3% last year. Analysts and economists, however, predict slower growth this year due to a global slowdown stemming from the US. Mr. Tansingco said 70% of the loan growth would come from commercial lending, while the remaining 30% would be from consumer lending.

Fabian S. Dee, Metrobank national branch banking sector head, said the company’s loan growth projection was subject to market developments.

"We still don’t know how hard the [US] subprime impact will be on our local economy so it’s hard to go bullish on using the original plans. We have to constantly adjust to market realities," he said. Though the local economy is likely to slow down, Mr. Tansingco said lending opportunities remain.

"There are several bright spots in the economy. Project finance, infrastructure and mining will fuel the loan demand moving forward. But whether the loan demand will kick in this year or next year, we have to wait and see because other sectors are also reassessing their projects now that markets are volatile...," he said.

Vicente Cuna, head for corporate banking of Metrobank, said that the group was particularly interested in the power sector.

"We’re very bullish on the power sector, especially electric co-ops. We feel it’s the sector long neglected by the banking industry because of certain risks that are specific to that sector and I believe it’s all a matter of understanding, how that sector operates...," he said.

Mr. Cuna also said that the bank’s tie-up with International Finance Corp., the private sector investment arm of World Bank, was geared towards biofuels projects.

"Very conservatively, for 2008 we’re looking at maybe a billion pesos worth of projects. [We’re currently looking at] two at the moment - one in the south and one in Luzon," he added. Metrobank, owned by tycoon George Ty, posted a net profit of P7.04 billion last year. — Lovely Nica P. Lee, BusinessWorld

Weina

March 24th, 2008, 04:33 AM

Think tank backs MSME lending

IMPROVEMENTS in financing for micro, small and medium scale enterprises (MSMEs) are necessary for the sector’s growth, the Congressional Planning and Budget Department (CPBD) said.

"Limited access to financing is one of the more serious problems of MSMEs as it affects all aspects of the business," the House of Representatives think tank said in a study.

"The level of investment in research and development, the quality of manufacturing processes, including the kind of machineries and equipment used, and the level of marketing strategies employed are all influenced by the availability of capital to the company," it said.

Specifically, it said a credit information bureau had to be established as banks were reluctant to lend to MSMEs due to the lack of creditworthiness data.

The CPBD also noted that banks perceive the MSME sector as more risky and expensive. "Low capitalization which indicates limited capital flexibility, coupled with lack of proper accounting records, make MSMEs more prone to downturns in the economy compared with large and more established companies," it said.

The quality of collateral required by banks is also not met by most MSMEs, it added.

MSMEs, meanwhile, view bank financing as inaccessible as they encounter difficulties in meeting requirements. Interest rates are also too high for the sector and processing times are also a disincentive.

The House think tank, in encouraging the establishment of the centralized credit information system, said a World Bank study done in 51 countries indicated that such led to a marked increase in lending, particularly to previously excluded sectors. It also noted that the bureau could lead to lower default rates.

Measures creating a Credit Information System — House Bills 118, 1731 and 2443 — continue to languish in the House. A counterpart measure in the Senate has already been approved under Senate Bill 1881.

The CPBD said amendments to the Magna Carta of SMEs should also be made to guarantee that a fair share is loaned to microenterprises. It said the Bangko Sentral ng Pilipinas should strictly monitor bank compliance.

Establishment of an MSME bank will also be helpful in consolidating government financing programs, it said.

MSMEs are said to account for 99% of establishments in the country and employ 69% of the labor force. — AKKA

Weina

March 25th, 2008, 02:40 PM

Philippine banks exposed to high credit losses -- Moody's

Thomson Financial
First Posted 17:29:00 03/25/2008

BANGALORE -- Moody's Investors Service said, in a report on overviews of banking systems worldwide, that banks in the Philippines are exposed to potentially high credit losses due to their operating environment.

Besides the moderately high volatility in the Philippines' business cycles, credit losses have historically been exacerbated by weak governance, Moody's said.

"Bank credit risk in the Philippines has been elevated by a difficult operating environment, a new and developing supervisory and regulatory framework and low level of government support," S&P said.

The ratings agency said these challenges outweigh the benefits derived from the dominant role of banks within the financial system, which have historically faced little competition from domestic capital markets or non-bank financial institutions and developed strong earnings profiles.

The ratings agency said reforms to the Philippine banking system, undertaken since the Asian currency crisis, helped to improve the regulatory and supervisory system, but confidence would be enhanced by greater transparency, formalization of procedures and institutionalization of reforms.

Weina

March 26th, 2008, 05:27 PM

Banks should adopt stronger risk management

LOCAL BANKS may have been spared from loan losses experienced by many US banks as a result of the subprime crisis, but they should continue adopting stronger risk management as a buffer against external shocks.

Compliance with the required minimum capital can only protect a bank from external pressures up to a certain extent, central bank Deputy Governor Nestor A. Espenilla, Jr. said yesterday.

Speaking to risk managers, the central bank official said the global financial turmoil has shown that mere compliance with regulatory capital under Basel 2 may not be enough.

Local banks are more than adequately capitalized as the industry’s average capital adequacy ratio stood at 19.3% as of June last year, way above the central bank’s requirement of 10% and the Bank for International Settlements’ (BIS) 8% standard.

But nurturing a culture of risk management can address the same issues that large US banks are now going through, Mr. Espenilla said.

This includes adopting sound risk management practices for banks’ own inherent value, building a strong capital position, improving personnel capacity, promoting high standards of professional conduct, instilling market discipline and enhancing transparency.

"The origins of the ongoing international financial crisis are broad and complex, but it is now evident that inadequate risk management in financial institutions played a major role," the central bank official said.

He added that lack of risk management had led to impaired public confidence, brought huge losses for many major financial institutions, and tarnished the reputation of their regulators.

"We are not, for a change, figuring prominently as we did in the 1997 Asian financial crisis. Some say we have been quite lucky in that regard, but we made ourselves lucky by doing our homework," Mr. Espenilla said.

He said areas of improvement in risk management among local banks include oversight of board of directors and senior management, as well as increased transparency to the public.

He said banks’ top management often overlook the issue of risk management, which makes it difficult for the central bank to make them understand their recommendations when there is a problem.

Mr. Espenilla further noted that interest in risk management mainly comes from the younger generation of bankers, and not to "those we believe who must understand."

He said the central bank would not be as heavy-handed as to requiring bank tellers to pass the first level of risk management examinations, which is the practice in some Indonesian banks. He said this would entail huge costs to banks. — G.S. dela Peña/Businessworldonline

Weina

March 28th, 2008, 03:59 PM

Central bank frowns at nontransparent sale of gov’t debt

The central bank has rejected a Treasury plan to negotiate the sale of short-term debt instruments, saying it violates market transparency.

"The Bureau of the Treasury will do what is best to meet [its] goals and objectives... At the same time, [it should] consider the best principles of transparency in trading and pricing," central bank Governor Amando M. Tetangco, Jr. told reporters via e-mail.

The Treasury issued a memorandum on March 3 allowing banks to individually make offers for short-term Treasury bills instead of competing with each other at the regular auctions.

The move seeks to keep Treasury bill rates low. The Treasury has been rejecting bids for the three- and six-month T-bills for five consecutive auctions since January, with banks asking for a premium.

The 91-day T-bill, which banks use as a benchmark for their own interest rates, stands at 3.673%.

Market players have rejected the government strategy, which they said is against principles of transparency. They also said it favors large banks given their huge transaction volumes.

"A more transparent system always leads to improved efficiency in price discovery, and ultimately, pricing. It is always, in my experience, better to work within the market framework," Mr. Tetangco said.

The Treasury has scrapped the sale of 91- and 182-day T-bills in the second quarter via regular auctions, and will instead sell the debt instruments via negotiated sale. — Gerard S. dela Peña
http://www.bworldonline.com

sugarboy

May 1st, 2008, 11:06 AM

PNB, Allied Bank to merge
Long-awaited consolidation of Tan-owned banks set for 3rd quarter

PHILIPPINE NATIONAL BANK and Allied Banking Corp., both owned by tycoon Lucio Tan, yesterday announced a long-awaited merger that would create the country’s fourth largest bank in terms of assets.

Officials told a briefing that the merger, valued at P61.9 billion, had been approved by the boards of both banks and would be subject to shareholder and regulatory approvals. It is expected to be concluded in the third quarter, with PNB the surviving entity.

"The merged bank will be the financial services platform of the entire Lucio Tan Group, one of the largest conglomerates in the Philippines," PNB President and CEO Omar Byron T. Mier told reporters.

PNB shares rose by 8.93% to P30.50 while Allied Bank shares were unchanged at P1,000.

The merger will be effected via a share swap. Allied Bank shareholders will receive 140 PNB shares for every Allied Bank common share and 30.73 PNB shares for every Allied Bank preferred share. PNB shares will be issued at P55 per share or at a premium over yesterday’s closing price.

Mr. Tan is the largest shareholder of both lenders. On December 7 last year the Supreme Court lifted a freeze on Allied Bank shares, opening the door to the merger with PNB.

The tycoon had always hoped to merge the two banks but was blocked by a government sequestration of Allied Bank shares imposed after the late dictator and Mr. Tan’s close friend Ferdinand Marcos was deposed in 1986.

The 71-year-old Fujian-born businessman set up Allied Bank in 1977 and acquired majority control of PNB after it was privatized in 1989.

The new bank will have P388 billion in total assets, making it the country’s fourth-largest bank after Metropolitcan Bank & Trust Co., Banco de Oro-EPCI Inc. and Bank of the Philippine Islands.

It would have a combined network of 626 branches and 614 ATMs nationwide.

Stockholders of both banks will take up the merger proposal in June 24.

Reynaldo A. Maclang, Allied Bank president, said the merger would take place at time of continued growth in the banking industry.

"Our merger is therefore a competitive response to the industry’s development," he said.

Allied Bank, in a statement, said "The merger brings together a combined complementary client base ranging from large corporations, local government units, government-owned and controlled corporations, overseas Filipino expatriates, the Chinese-Filipino community to the provincial market."

PNB has an extensive network with the millions of Filipinos working abroad.

Mr. Mier said the merged bank would focus on expanding its presence abroad, particularly in countries where PNB and Allied Bank were not active, citing Malaysia, Indonesia and Greece.

He said the integration process would be completed next year, with positive results expected the year after.

With the Lucio Tan Group and other associates owning 80.7% of the merged entity, Mr. Mier said the bank does not have plans of expanding a public float. Next month, PNB will try to raise P3 billion to P6 billion from issuance of lower Tier 2 unsecured subordinated debt notes.

"Given the capital position of the bank, we don’t see any need to go to the capital market. We have a relatively comfortable capital market base. Right before the merger, Allied Bank went to the market while we are going to the market for P3 billion to P6 billion in lower Tier 2. We don’t foresee any offerings right after the merger," Mr. Mier said.

Eagle Equities Inc. President Joseph Roxas said it was a "good" transaction since there is not much redundancy in the operations of the two banks.

"Consolidation in the industry is slowly happening. Maybe the smaller banks will consolidate next. The Gokongwei group might be interested to buy other banks since they only have one which is Robinsons Savings Bank," he said.

Paul Joseph Garcia, chief investment officer for ING Investment Management Philippines, said "Over the medium-term, we expect the banking sector to consolidate and see more mergers and acquisition activities. There are still too many banks competing in a small banking market like the Philippines." — with reports from AFP and Reuters

Gento

May 7th, 2008, 10:38 AM

-TC-

May 7th, 2008, 02:04 PM

Hello All,

I am looking some advice.

I work in banking (in Europe) and am in the process of buying a condo in Metro Manila for investment purposes.

To facilitate the purchase (over a number of years) and to limit currency risk (esp given the potential for significant fluctuation of the Peso), I am looking to open a bank accout, denominated in Pesos, in the Philippines.

One account I will require is a checking account (for monthly payments). In addition, I am also looking for a savings account to earn interest on my Peso-denominated monies.

However, my proposed developer (large &, to best of my knowledge, well respected) is advising that a savings account will only pay interest of 0.50% :dunno:

Such a rate of interest seems remarkably small, esp as interest rates in the Philippines remain very high by western standards.

Is my developer providing accurate advice or are there more attractive Peso-denominated savings options for non-resident non-Filipinos available?

Thanks,
Gento

Peso SA
Yes, these accounts earn very small interest. Please note that if you were quoted an SA rate of 0.50% gross p.a. then your net interest is only 0.40% p.a. less withholding tax of 20%.

Peso CA
These accounts don't normally earn any interest so for you to earn at least something on your funds, you can open an Automatic Transfer CA with most banks. This CA is linked to an interest-earning SA.

Here are 2 alternative options:

- Some banks give high interest rates on CASA but the ADB requirement is quite high and you are limited to only a few withdrawals in a year. If you are allowed to withdraw at least 12x to coincide with your amortization schedule then this could work!

- You can alternatively ask your bank to invest your funds in a high interest term deposit (e.g. Time Deposit Account, Money Market Unit Investment Trust Fund, etc.) that will mature on specified dates (May 25, Jun 25, Jul 25, and so on) and the proceeds of each maturity on those dates credited to your CA to pay for your amortization. There are other ways but these other TD options will need some monitoring on your end to make sure that your checking account is always properly funded.

Zodiac18

May 7th, 2008, 03:56 PM

Zodiac18

May 7th, 2008, 04:02 PM

Originally Posted by Gento
Hello All,

I am looking some advice.

I work in banking (in Europe) and am in the process of buying a condo in Metro Manila for investment purposes.

Hi Gento!

Next week, I'm planning to apply for a checking/savings account in Washington DC
http://www.banking.us.hsbc.com/HICServlet?cmd_LocateBranch=&BranchState=DC&BranchPrevious=cmd_GetUSMap=&accept-language=en-US

so that I can pay for my future condo purchase (like you) in Baguio.

Credit Card Application Requirements

Thank you for your interest in a credit card from HSBC.
To be eligible for a credit card you must:

Be between 21 and 65 years old and a Philippine resident
Be residing or employed within Metro Manila, Bulacan, Pampanga, Rizal, Laguna, Cavite, Batangas, Cebu, Davao City, Zambales (Subic and Olongapo City), Bacolod, Butuan, Cagayan de Oro, Cotabato, Dipolog, General Santos, Iloilo, Kalibo, Legaspi, Naga, Puerto Princesa, Roxas, Tacloban, Tuguegarao, Tagbilaran City, Zamboanga City, Baguio City, Panabo & Tagum Davao del Norte, Digos Davao del Sur, Laoag City, Ormoc City, Dumaguete City, Cabanatuan City, Dagupan City, Urdaneta Pangasinan, Calasiao Pangasinan, Lucena City, Tarlac City.
Have a residential landline telephone
Have at least a gross annual income of

Php 120,000 for Visa or MasterCard Classic, Mabuhay Miles Visa Classic or RED MasterCard
Php 480,000 for Visa or MasterCard Gold, and
Php 1 Million for Mabuhay Miles Visa Gold

(income must be verifiable and consistent with income proof)

Supplementary cards

Supplementary applicant/s may be any of the following: (1) relatives of the primary applicant defined as spouse, children, children-in-law, parents, parents-in-law, siblings and siblings-in-law; or (2) non-relatives.
If a non-relative, kindly fill out appropriate fields in the supplementary card applicant portion which are required in order that we may process the application. The Bank may obtain additional information from the non-relative in order to process application.
Supplementary applicant/s must be between 15 and 65 years old.
The supplementary card must be of the same card type as the primary cardholder's.
Each primary cardholder is entitled to a total of four (4) supplementary cards.
Primary and supplementary cardholders share the same credit limit.
Billing address will be that of the primary cardholder.
To help you complete our quick application form, please have the following information on hand. You will need approximately 10 minutes to complete the form.

Your Tax Identification Number (TIN)
Your Social Security Service Number (SSS) / Government Service Insurance System Number (GSIS)
Your Credit Card Number/s from other banks
Please ensure that you fill in as many fields as possible to increase the chances of approval. You will be requested by email to submit the following by fax or post:

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The supporting documents we accept are:

1. Valid ID document (front and back copy), any of the following:

Passport
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2. Proof of Income
In compliance with Bangko Sentral ng Pilipinas (BSP) Circular 472 and 549, you are required to submit your latest Income Tax Return (ITR) form to complete your credit card application.

For employed applicants with a fixed salary, please submit a photocopy of your latest ITR duly stamped as received by the Bureau of Internal Revenue (BIR) or your employer's Certificate of Compensation Payment / Tax Withheld (BIR Form 2316) and any of the ff:

Certificate of Employment (COE) and income
Computerized Latest 1-Month Payslip
Employment Contract
Notice of Salary Increase
Postpaid Mobile Phone Billing Statements. Valid statements must come from either Smart Communications (including subsidiaries Talk 'N Text and Addict Mobile) or Globe Telecom (including subsidiary Touch Mobile) with a minimum plan limit of Php1,300 for Smart subscribers and Php2,500 for Globe subscribers. Statement must be no later than 2 months old when received by HSBC.
For Self-Employed applicants, please submit a photocopy of your business registration with photo and latest audited financial statement as submitted for taxation purposes to the BIR as well as your latest ITR.

Note:
All data submitted will be treated confidentially by HSBC. HSBC will only process applications upon receipt of all required documents and data, and documents supplied will not be returned. HSBC has the right to decline your credit card application, without having to specify and/or disclose the reason.

https://www.tools.asiapacific.hsbc.com/webform/apply?id=ph+ccapp

-TC-

May 15th, 2008, 09:02 PM

http://www.bworld.com.ph/BW051608/content.php?id=021

Back to basics for most banks
BusinessWorld
May 16, 2008

VOLATILE FINANCIAL market conditions, aggravated by the double punch of rising food and fuel costs, are forcing banks to moderate securities trading activity and return to the "basic" business of lending, an industry official yesterday said.

Aurelio Montinola III, president of Bank of the Philippine Islands (BPI), said the bank is recasting its net profit growth projections for 2008, in line with the government’s plan to change its macroeconomic assumptions.

The banking arm of conglomerate Ayala Corp. saw its net profit halved in the first quarter to P1.5 billion from a year ago, as the difficult local market conditions hurt its securities trading gains.

Rising inflation in the Philippines resulted in higher interest rates, forcing the bank to migrate to shorter-tenored peso-denominated debts that in effect churned out lower interest income.

"We did not foresee the combination of the food and oil prices coming in together," Mr. Montinola told reporters in a contract signing between BPI and Manila Water Co. held yesterday.

"Inflation would be higher and therefore, we have to translate that [change in forecast] to [revisions] in other items," he said referring to revisions in the bank’s profit target for the year, which he did not disclose.

Prospects for the second quarter, he said, are not any brighter, with the bank expecting inflation to surge to 8%.

"The first quarter was just a bad quarter. The second quarter should be challenging for most because inflation is going to increase until the third quarter," Mr. Montinola noted.

But while soaring food and fuel costs would likely eat up on a family’s disposable income and dampen consumer spending, the bank is still bullish about growing its loan portfolio by 12-13% this year.

"The general trend is the whole industry is lending or at least is trying to lend. We’re going consumer and SME [small and medium enterprise] lending," Mr. Montinola said.

"We’re back to commercial banking basics," he pointed out.

Growth prospects in mortgage lending remain favorable, as "people still spend for anything that is basic like a house", Mr. Montinola noted, adding that in the first quarter, mortgage loans were up by 30%.

"They are just now more conscious with their money," he said.

Other banks that reported poor first quarter earnings — among them, Banco de Oro Unibank and Philippine Savings Bank — have said they would focus on growing loans and deposits to boost interest earnings and offset the expected poor trading gains.

BPI yesterday closed a deal with fellow Ayala-owned Manila Water, which would simplify the utility firm’s cash management system.

Manila Water previously had partnerships with at least 13 banks that collect payments for its water services- — a process, which it said have made "management and reconciliation processes very tedious, costly and time-consuming."

The BPI-Manila Water deal cuts the cash flow process to just two steps from previous five, Mr. Montinola said. — Maria Eloisa I. Calderon

kiretoce

June 13th, 2008, 08:44 PM

PERA bill to hike savings rate (http://www.gmanews.tv/story/101086/PERA-bill-to-hike-savings-rate-says-lawmaker)

The country’s savings rate is expected to increase once the bill allowing tax-free personal retirement accounts from taxes becomes law, a lawmaker said.

Senator Edgardo J. Angara said the country’s savings rate would go up to about 30% of gross domestic product (GDP) from 19-23%. He noted that the country’s savings rate is among the lowest in the region, with Malaysia, Singapore and Vietnam at 34-40% of GDP.

"[The Personal Equity and Retirement Account or PERA] is one of the best ways to accumulate savings. It will greatly augment Filipinos’ retirement plan," Mr. Angara told a briefing Friday.

The PERA bill was approved by a bicameral conference last June 10. Mr. Angara, who heads the Senate Committee on Banks, Financial Institutions and Currencies, said the law will likely take effect within the year after the Bangko Sentral ng Pilipinas and the Department of Finance come up with implementing rules.

The bill intends to promote the "culture of savings" among Filipinos, particularly overseas Filipino workers (OFW) who are not required by law to be members of the Social Security System (SSS) and the Government Service Insurance System (GSIS), officials said.

Mr. Angara said the scheme is expected to attract eight million individuals, three million of of them OFWs, with the rest being self-employed individuals or entrepreneurs who are also not required to contribute to the SSS and GSIS.

Under the bill, an individual may make a total maximum annual contribution of P100,000 to his or her PERA account, or P200,000 for married individuals. The contribution can be as high as P400,000 for an OFW and his or her spouse.

Contributions are required to be invested in a qualified "PERA Investment Product," which may be a unit investment trust fund (UITF), mutual fund, annuity contract, insurance or pension products, deposit product, pre-need pension plan, shares of stocks, exchange-traded bonds or any other investment product or outlet.

Contributors are entitled to an income tax credit equivalent to 5% of the total PERA contribution. Income from contributions as well as the eventual distribution of the PERA to the contributor are tax-exempt.

Mr. Angara said the bill has won the support of the business community as mobilization of savings will deepen the local capital market.

-TC-

June 14th, 2008, 12:53 PM

http://services.inquirer.net/mobile/08/06/14/html_output/xmlhtml/20080614-142631-xml.html

Rise in savings seen with proposed retirement law
Michelle V. Remo
Philippine Daily Inquirer
June 14, 2008

MANILA, Philippines—Filipinos are expected to save more money now that Congress has ratified the Personal Equity and Retirement Account (PERA) bill, said Senator Edgarda Angara, author of the bill.

The Philippines’ savings rate of 23 percent of gross domestic product would easily shoot up 34-40 percent over the medium term with help from the proposed new law, he said.

The PERA bill provides, among others, that income from contributions to the personal retirement account will not be subject to income tax. PERA investors will also be entitled to tax credits equivalent to five percent of their contributions to retirement accounts, said Angara, chairman of the Senate committee on banks, financial institutions and currencies.

Employers that will contribute to their employees’ retirement accounts may deduct the contributions from their taxable incomes, he said.

Personal retirement accounts may be opened in banks, mutual funds and other financial institutions, he added.

PERA contributions should be only put in relatively secure investments that will be identified in the proposed law’s implementing guidelines, Angara said.

The Congress bicameral conference committee passed the PERA bill Tuesday. The bill is up for signing into law by President Gloria Macapagal-Arroyo.

Under the bill, the central bank and the Department of Finance will be tasked to issue the implementing rules and regulations to put the law into effect.

Angara said the PERA bill would primarily benefit overseas Filipino workers (OFWs) and Filipinos who are not members of the pension funds Social Security System (SSS) and Government Service Insurance System (GSIS).

“The bill draws from the experience of overseas Filipino workers who make a huge contribution to our economy in terms of foreign remittances,” he told reporters. “The remittances provide for their families’ present consumption—buying a house, paying for their kids’ tuition, setting up small businesses—but leave very little savings for one’s retirement.”

He added that small-scale businessmen not covered by the SSS or GSIS would also benefit from the PERA bill.

Angara estimated that 22 percent of the country’s labor force of 35.81 million are outside coverage of the SSS or the GSIS.

Colonel Burger

June 24th, 2008, 11:51 AM

Anyone here who has the list of the 10 ten banks in the philippines?

or a list of the top 10 Commercial Banks and top 10 Thrift/savings bank?

Christendom

June 24th, 2008, 12:05 PM

post it later on,,,i have a copies of it,,,local and international chains of banks top lists

Colonel Burger

June 24th, 2008, 12:39 PM

Thanks! i really need it.

Igsuonnimo

June 24th, 2008, 02:18 PM

PNB, Allied vote on merger (http://www.manilastandardtoday.com/?page=business1_june24_2008)

Shareholders of Allied Banking Corp. and Philippine National Bank are expected to approve the proposal to merge the two banks in separate stockholders’ meetings today, with PNB as the surviving entity.

The merger will create the country’s fourth-largest bank after Metropolitan Bank and Trust Co., Banco de Oro Universal Bank and Bank of the Philippine Islands.

Taipan Lucio Tan controls both PNB and Allied Bank.

The merger, valued at P61.8 billion, will be done through a share swap completed within the third quarter of the year. It will require approvals from the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, Philippine Deposit Insurance Corp. and the Bureau of Internal Revenue.

The merged bank will have 15 seats in its board of directors. The PNB board currently has 11 seats.

PNB stockholders are expected to approve an amendment to the bank’s articles of incorporation increasing the number of board seats to 15.

The 15 to be nominated to the PNB board today are taipan Lucio Tan, his sons Lucio Tan Jr. and Michael Tan, his brother Harry Tan, Allied Bank chairman Panfilo Domingo, PNB president Omar Byron Mier, PNB executive vice president Carmen Huang, former Land Bank president Florido Casuela, former PNB president Feliciano Miranda Jr., Domingo Chua, former SGV chairman Gloria Tan Climaco, former Finance Undersecretaries Eric Recto and Florencia Tarriela, Mariano Tanenglian and Washington Sycip.

The merger is expected to result in revenue enhancements and cost savings. The merged bank will have more customers as a result of a larger network and can increase its business from current customers. It will also have a lower overall funding cost from the re-pricing of its deposit products and improved risk profile.

Cost savings will potentially come from branch re-engineering, economies of scale, consolidation of overlapping systems and corporate indirect overheads, realignment of front offices and the optimization of back office processing and support functions.

PNB said in a disclosure yesterday that it issued P6 billion of tier 2 notes last week to beef up capital prior to the merger. The notes were over three times oversubscribed and priced at 8.50 percent, lower than the benchmark five-year government bonds. Allied Bank also issued P4.5 billion in tier 2 notes earlier this year to strengthen the bank’s capital before the merger.

Under the merger proposal, PNB will issue some 457 million new shares at P55 per share for swap with Allied Bank shares. PNB will exchange 140 of its shares for every common share of Allied Bank and 30.73 shares for each of its preferred shares.

From Manila Standard Today (http://www.manilastandardtoday.com/?page=business1_june24_2008)

-TC-

June 25th, 2008, 02:38 AM

Approved! :cheers:

http://www.bworld.com.ph/BW062508/content.php?id=004

PNB-Allied Bank merger okayed by shareholders
BusinessWorld
June 25, 2008

SHAREHOLDERS of Philippine National Bank (PNB) and Allied Banking Corporation — both controlled by tobacco and airline tycoon Lucio Tan — have approved PNB’s $564-million take-over of Allied Bank to create the country’s fourth biggest bank in terms of assets.

PNB will issue 457 million new shares at P55 per share to purchase all of Allied Bank’s common and preferred shares in a deal expected to be completed next quarter.

In a briefing following PNB’s annual stockholders’ meeting yesterday, PNB President and Chief Executive Omar Byron T. Mier said the bank would set aside P1-1.2 billion to cover one-time integration costs within 12 to 18 months after the Monetary Board gives its go signal.

The merged entity is expected to post a net income of roughly P3.5 billion for this year and about P4 billion-P4.2 billion in 2009, which could have been higher if not for the impact of integration cost on the bottom line.

PNB’s net income rose 50% to reach a 10-year-high P1.23 billion last year, while Allied Bank’s net income rose 3% to P1.88 billion.
"There are integration costs as you put the two banks together. The full benefit of the merger will be felt at the end of the second or the third year [after the merger]," Mr. Mier told reporters.

The separate boards of the two banks had approved the plan to merge in their respective meetings last April 30.

After the deal, the Lucio Tan group will have an 81% share in the merged bank.

The merged entity will be the fourth largest lender with total assets amounting to P388 billion. It will have a combined network of 626 branches and 614 ATMs nationwide.

The merger of the two banks has been on the drawing board since last year, but plans were temporarily stalled by a Presidential Commission on Good Government (PCGG) order calling for the sequestration of Mr. Tan’s shares in Allied Bank, as well as in Fortune Tobacco and Foremost Farms and Shareholdings, Inc. Merger moves resumed after the Supreme Court nullified the PCGG order in December 2007.

Asked on whether the bank would offer additional shares, Mr. Mier said PNB did not need additional capital for the moment.

"If we want our shares to churn, somewhere down the line we might have to consider issuing more shares to the public. But we have more than enough capital right now," he said.

The bank may do so after five years, he added, considering that PNB and Allied Bank just recently raised Tier 2 capital, enabling them to secure P6 billion and P5 billion, respectively.

Mr. Mier said the merged bank would have a capital adequacy ratio of about 20%.

He also said that drivers of the merged bank’s growth would be its renewed focus on core businesses such as consumer and corporate loans, as well as remittances. The bank’s total loan portfolio is expected to grow by 15% this year, or at the same pace as last year.

The merger with Allied Bank will also help the bank regain its lead in the remittance business, he said.

"In the last five years, we were focused on bringing down our non-performing assets. But it’s down already. Now we’re focused on our core business," he said.

The bank’s non-performing loans (NPL) were also expected to drop to P7.5 billion from P9.6 billion this year, and further to a range of P5.5-6 billion next year through loan restructuring, compromise settlements and regular collections. The bank will also forge joint ventures with property development firms such as its sister company Eton Properties to make productive use of its idle lands.

Claire Quiray, analyst at Accord Capital Equities Corp., said the news may not have caused any significant movement in PNB’s and Allied Bank’s shares, but the move "will strengthen the bank’s position in the industry in the long run."

Bankers Association of the Philippines Executive Director Leonilo G. Coronel said the merger would further heighten competition in the local banking sector.

"[The merger between PNB and Allied Bank] will definitely make more competition among bigger banks," he said in a telephone interview.
But while such mergers have stoked speculations of further consolidation among more local banks, Mr. Coronel said mergers and acquisitions would still depend on the needs of banks.

And even if the PNB-Allied Bank merger followed the mergers of International Exchange Bank and Union Bank of the Philippines, Manila Banking Corp. and China Banking Corp., as well as of Banco de Oro and Equitable PCI Bank, which all took place last year, the need for mergers will depend on the specific needs of banks, Mr. Coronel said.

"Mergers are driven by need to compete, but it’s a process. It’s not imposed by the government. It’s up to them whether they need the depth and breadth in order to compete. It depends on their market and needs," he explained. — Gerard S. dela Peña and Reuters

Igsuonnimo

June 25th, 2008, 12:32 PM

^^ Hindi ba't magbalae sina Lucio Tan at George S.K. Ty?

Ano kaya ang mangyayari sa China Bank at BDO share holdings ni Henry Sy?

Igsuonnimo

June 25th, 2008, 05:08 PM

:cheers1: :okay: :horse:

4th largest bank formed (http://www.manilastandardtoday.com/?page=business1_june25_2008)
By Eileen A. Mencias

Shareholders of Philippine National Bank and Allied Banking Corp. yesterday approved the plan to merge the two banks to create the country’s fourth largest in terms of assets, loans and deposits. PNB is the surviving bank.

PNB and Allied Bank, both controlled by taipan Lucio Tan, expect an integration cost of P1 billion to P1.2 billion in the first 12 months of the merger.

The merged banks, however, are still expected to register a combined profit of P3.5 billion this year, PNB president Omar Byron Mier told reporters in a briefing yesterday. PNB sees profit of P2 billion this year and P2.4 billion in 2009.

PNB posted a net income of P1.5 billion in 2007 while Allied Bank booked a profit of P1.8 billion. The merged banks expect a net income of around P4 billion in 2009.

Mier said the two banks would experience the benefits of the merger after the second or third year when profitability improved significantly.

He said PNB and Allied Bank expect the approval of the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas and the Philippine Stock Exchange on the merger by July and the legal union by August or September.

Mier said the actual integration would take six to nine months and be fully completed by the last quarter of next year.

He said at the PNB stockholders’ meeting that the merger would result in a strong market position, widen local and international network and complement each other’s client base, revenue and cost synergies.

Mier said PNB after the merger would have the largest international footprint among Philippine banks with its combined 124 international offices. The merger will give PNB a distribution network of 626 domestic branches and 614 automated teller machines nationwide.

“We hope to recover PNB’s position as one of the most profitable banks in the country,” Mier told shareholders.

The merger will also raise the bank’s single borrower’s limit to P10 billion, allowing PNB to grant loans to big corporate clients. The bank plans to increase loans this year by 15 percent to P50 billion.

The merger will be done through a stock swap, with PNB issuing 457 million new shares at P55 apiece in exchange for all Allied Bank shares. PNB will account for 59.2 percent of the merged bank’s equity while Allied Bank will share 40.8 percent.

ING, the merger adviser, valued the transaction at P61.8 billion. PNB is worth P36.6 billion while Allied Bank is valued at P25.2 billion.

PNB will swap 140 shares for every common share of Allied Bank and 30.73 shares for each preferred share. Mier said the PNB shares were priced at 1.6 percent to book value while those of Allied Bank were valued at 1.5 percent to book value.

From Manila Standard Today (http://www.manilastandardtoday.com/?page=business1_june25_2008)

jvl

June 26th, 2008, 08:51 AM

^^Will Allied Bank retain its name?

BTW Credit Card companies sucks!

amigo32

June 26th, 2008, 03:34 PM

^^Will Allied Bank retain its name?

BTW Credit Card companies sucks!

May utang ka ba?:D
Kung alam mo paano gamitin, nakakatulong:D

red_jasper

July 7th, 2008, 03:31 AM

Philippine banks' outlook stable although challenges lie ahead

Fitch Ratings has said that Philippine banks have improved their financial profile over the past two to three years, thanks to better asset quality and enhanced capitalisation, though the less benign economic environment is expected to result in weaker performance with slower growth in lending and underlying profits, as well as a modest deterioration in asset quality. In the agency's opinion, these risks are largely reflected in the banks' relatively moderate to weak Individual Ratings and the Banking Systemic Risk Indicator of 'D' (which denotes low intrinsic quality or strength of the banking system).

After a long period of weak credit demand, loan activity in the Philippines picked up amid the improved economic conditions of 2006-2007, spurred mainly by consumer financing, followed by corporate loans. The share of corporate loans has slightly fallen but still forms a high 75% of total loans at end-2007, compared with 13% and 12% for consumer loans and SME loans, respectively. Fee income opportunities have increased in the businesses of remittance, cash management and wealth management. More importantly, these revenues are more recurring in nature than the volatile trading gains Philippine banks used to enjoy and depend on. NPLs have fallen, mostly by way of disposals and write-offs in addition to recoveries in recent years. NPLs were 6% of total loans (excluding interbank) and had satisfactory reserve coverage of 82% at end-2007. The improved buoyancy of the equity and debt capital markets until a few months ago enabled banks to raise new capital securities to bolster their capital and to also cushion the decline in capital ratios due to Basel II.

The GDP growth forecast of 5%-6% over 2008-2009 still suggests an environment that broadly supports some growth, albeit at a more moderate pace than in 2006-2007. That said, some slowdown in credit demand is likely to arise from the curtailing of consumption spending, particularly in view of rising interest rates, and increased operating costs for businesses. Together with very limited trading opportunities on government securities amid rising yields and possibly mark-to-market losses, Fitch expects this to weaken banks' profitability. NPLs too may rise amid the more challenging operating environment, stemming from rising inflation and interest rates. Foreclosed properties may also be more difficult to dispose of, and will continue to pose a threat to capital. Foreclosed properties were 40% of core equity at end-2007, with low reserve coverage of only 9%.

Here (https://www.theasianbanker.com/A556C5/Update.nsf/0/6B6A86062E1B1BDC4825747F0003FF22?Opendocument)

kevinb

July 7th, 2008, 11:39 AM

^^ Hindi ba't magbalae sina Lucio Tan at George S.K. Ty?

Ano kaya ang mangyayari sa China Bank at BDO share holdings ni Henry Sy?

Kay Henry Sy naman ang BDO, so dapat walang mangyari sa BDO shares niya. I'm just unsure about his shares in China Bank.

jvl

July 7th, 2008, 11:40 AM

May utang ka ba?:D
Kung alam mo paano gamitin, nakakatulong:D

I have one before I called up another bank to inquire. Without any questions, they sent me a new card (probably got my credentials from my existing card upon knowing I exist in this world). I went on vacation for a month and upon return, sifting through my mails, I found a billing from this new card. I got billed for card insurance and stuff. I called them up and they said all was agreed upon when I applied for the card. What agreement? Who applied? I just showed interest. And I haven't even activated the card for g*dsake! So who has agreed?

Anyway, to make a long story short, I had the charges reversed and the card cancelled. After 3 days the same card company is calling me to give them another chance.

No way! I don't feel they could be trusted and maybe they got off on the wrong foot. So many card providers out there, so what the heck!

Peace! :)

kevinb

July 7th, 2008, 11:46 AM

^^ If you received a card that you didn't apply for, you should've called their Customer Service Department for it to be deactivated. |Cutting the card into two will also deactivate it. :)

jvl

July 7th, 2008, 11:48 AM

^^Found it in my mailbox upon return from vacation. The billing came a few weeks after they delivered the card.

The card and billing was un-touched/un-opened until I came from my vacation. :ohno:

PS. you mean if I cut the card in half it will automatically get deactivated in their records? what kind of technology is that? i suppose you need to inform them by calling as well.

P A L

July 7th, 2008, 11:52 AM

Rest in Peace to Asia's Top Banker Panfilo O. Domingo
Chairman of Allied Bank
Former Chairman of Philippine National Bank

kevinb

July 7th, 2008, 01:01 PM

PS. you mean if I cut the card in half it will automatically get deactivated in their records? what kind of technology is that? i suppose you need to inform them by calling as well.

It's stated in one of my Mom's cards. It's a Citi, if I'm not mistaken.

jvl

July 8th, 2008, 08:53 AM

^^Jeez...nowadays, nobody should easily believe on whatever is written on any creditcard document. Even your billing statement should be reviewed carefully!

Quoting G.W. Bush: Fool me once, shame on you! :lol:

jvl

July 9th, 2008, 06:41 PM

Credit card fees eat up gas station profits
By Kathy Chu, USA TODAY
July 7, 2008

Rising gas prices have not only punished consumers. Increasingly, they're also squeezing many gas-station owners.

As gas prices have jumped, station owners' profit margins have shrunk because they now must pay higher fees to credit card companies to process payments. Those fees are so high, says the National Association of Convenience Stores, that they've slashed already slim profit margins and made it hard for stations to make money on gas sales.

If they can't turn a profit at the pump, station owners say, they may have to ask drivers to share the financial burden — in the form of higher prices for convenience-store sundries such as drinks and candy. And some gas stations are starting to ban credit card payments outright.

In 2007, credit card fees cost convenience stores $7.6 billion — more than double the convenience store industry's profits, the National Association of Convenience Stores says. Most of the card fees come from gas sales, says spokesman Jeff Lenard.

When a driver pays for gas with a credit card, retailers must pay an average 2.5% of the sale price to process it, the association says. With gas prices exceeding $4 a gallon, business owners are paying more than 10 cents a gallon, on average, for each card transaction. That nearly consumes what the Oil Price Information Service says was station owners' average of 12 cents a gallon in gross profit over the past month.

As gas prices rise, many station owners say they've had to lower their profit margin per gallon to try to attract more customers.

Peter Madigan, executive director of the Electronic Payments Coalition, representing card companies, says, "There's a cost associated with electronic payments." Processing rates, he adds, are based on the cards' "value" to merchants as well as banks' exposure to loss if a sale is fraudulent.

Lawmakers are paying closer attention to the impact on retailers. A bill in Congress would force credit card companies to negotiate card-processing rates with retailers and have a panel of judges set the rates if agreement can't be reached.

-TC-

July 17th, 2008, 02:41 PM

http://business.inquirer.net/money/breakingnews/view/20080717-149025/BSP-raises-key-interest-rates-by-50-basis-points

BSP raises key interest rates by 50 basis points
By Enrico dela Cruz
Thomson Financial
07/17/2008

MANILA, Philippines – (UPDATE) The Bangko Sentral ng Pilipinas, the country’s central bank, raised key interest rates by half a percentage point on Thursday, the second increase in two months and a relatively aggressive move compared to the first hike of only 25 basis points, to fight double-digit inflation.

Policymakers voted to hike the overnight rates to 5.75 percent for borrowing and 7.75 percent for lending.

"Inflation control is the foremost priority of the central bank," said Governor Amando Tetangco Jr.

"Price pressures have increased even as they are projected to ease starting late 2008."

The central bank expects inflation, which jumped to a 14-year high of 11.4 percent in June, to continue rising in the third quarter as food and energy prices soar, before slipping back to single-digit levels in 2009.

"Sustained high inflation can unseat inflation expectations and potentially create a repeating cycle of lingering inflation and wage pressures that could prove costly to the economy," Tetangco said.

As second-round effects of inflation have set in, with core inflation in June jumping to 6.6 percent from 6.2 percent in the previous month, the central bank said inflation this year could hit 9.0 to 11.0 percent, way above the government's target of 3.0 to 5.0 percent.

The central bank is raising its inflation forecasts for 2008 and 2009 for the second time this year. It was previously looking at an inflation range of 7.0 to 9.0 percent for this year.

For 2009, inflation is seen averaging between 6.0 and 8.0 percent, up from the previous forecast of 4.0 to 6.0 percent.

Despite soaring inflation which has been eroding consumers' spending power, the central bank expects the country's gross domestic product to have expanded 5.6 percent in the second quarter from the year-earlier period, faster than the first-quarter growth of 5.2 percent.

The central bank sees a 5.0-percent GDP growth to be "robust enough" and said it was "prepared to take all necessary actions to address the threat of high inflation and promote price stability."

"By responding promptly to inflation risks, the central bank intends to reduce the risks to inflation expectations and the long-term cost to output growth from prolonged high inflation," Tetangco said.

-TC-

July 17th, 2008, 02:46 PM

http://business.inquirer.net/money/breakingnews/view/20080717-149041/Peso-gains-offshore-after-rate-rise

Peso gains offshore after rate rise
Reuters
07/17/2008

SINGAPORE -- The Philippine peso rose in offshore spot and forwards trade on Thursday after the central bank raised interest rates by half a percentage point, more than some in the market had expected, to contain inflation.

The peso was quoted as high as 44.64 per dollar in offshore trading, its highest level since June 30, and it rose to 45.04 in three-month offshore non-deliverable forwards (NDFs), its strongest level since mid-June.

The peso ended at 45.03 per dollar in onshore trading, up 1.0 percent from Wednesday's close, before the central bank announced the rate rise and sounded hawkish in its accompanying statement.

"The dollar moved significantly lower in NDFs due to the BSP's (central bank) rate hike of 50 basis points, while crude oil prices are down," said a Manila-based trader.

"The Philippine peso is strengthening (offshore), as markets were caught off guard," said Thio Chin Loo, a currency strategist at BNP Paribas.

"The (dollar's) bullish channel on the daily chart is being challenged as the US dollar breaks below trendline support versus the peso. A crack of support at 44.30 opens further losses to 44.00."

http://business.inquirer.net/money/breakingnews/view/20080717-149025/BSP-raises-key-interest-rates-by-50-basis-points

BSP raises key interest rates by 50 basis points
By Enrico dela Cruz
Thomson Financial
07/17/2008

MANILA, Philippines – (UPDATE) The Bangko Sentral ng Pilipinas, the country’s central bank, raised key interest rates by half a percentage point on Thursday, the second increase in two months and a relatively aggressive move compared to the first hike of only 25 basis points, to fight double-digit inflation.

Policymakers voted to hike the overnight rates to 5.75 percent for borrowing and 7.75 percent for lending.

"Inflation control is the foremost priority of the central bank," said Governor Amando Tetangco Jr.

"Price pressures have increased even as they are projected to ease starting late 2008."

The central bank expects inflation, which jumped to a 14-year high of 11.4 percent in June, to continue rising in the third quarter as food and energy prices soar, before slipping back to single-digit levels in 2009.

"Sustained high inflation can unseat inflation expectations and potentially create a repeating cycle of lingering inflation and wage pressures that could prove costly to the economy," Tetangco said.

As second-round effects of inflation have set in, with core inflation in June jumping to 6.6 percent from 6.2 percent in the previous month, the central bank said inflation this year could hit 9.0 to 11.0 percent, way above the government's target of 3.0 to 5.0 percent.

The central bank is raising its inflation forecasts for 2008 and 2009 for the second time this year. It was previously looking at an inflation range of 7.0 to 9.0 percent for this year.

For 2009, inflation is seen averaging between 6.0 and 8.0 percent, up from the previous forecast of 4.0 to 6.0 percent.

Despite soaring inflation which has been eroding consumers' spending power, the central bank expects the country's gross domestic product to have expanded 5.6 percent in the second quarter from the year-earlier period, faster than the first-quarter growth of 5.2 percent.

The central bank sees a 5.0-percent GDP growth to be "robust enough" and said it was "prepared to take all necessary actions to address the threat of high inflation and promote price stability."

"By responding promptly to inflation risks, the central bank intends to reduce the risks to inflation expectations and the long-term cost to output growth from prolonged high inflation," Tetangco said.

-TC-

August 22nd, 2008, 04:35 PM

http://business.inquirer.net/money/topstories/view/20080822-156215/Arroyo-signs-PERA-law

Arroyo signs PERA law
By Lira Dalangin-Fernandez
INQUIRER.net
08/22/2008

MANILA, Philippines -- President Gloria Macapagal-Arroyo has signed into law the Personal Equity and Retirement Account (PERA) bill in ceremonies in Malacañang Friday.

With the signing of the measure, the country's savings rate is expected to increase as it allows tax-free personal retirement accounts.

The bill aims to promote the culture of savings among Filipinos, particularly overseas workers, who are not members of either the Social Security System or the Government Service Insurance System.

Under the law, an individual can make a maximum contribution of P100,000 per year to his/her PERA account. For married individuals, contributions can be as high as P200,000, and for an OFW and his or her spouse, the maximum amount is P400,000.

Contributions should be invested in a qualified "PERA Investment Product," which may be a unit investment trust fund, mutual fund, annuity contract, insurance or pension products, deposit product, pre-need pension plan, shares of stocks, exchange-traded bonds, or any other investment product or outlet.

Contributors are entitled to an income tax credit equivalent to 5.0 percent of the total PERA contribution, according to the law.

Income from contributions is tax-exempt, it said.

-TC-

August 22nd, 2008, 04:39 PM

Porknight

August 22nd, 2008, 05:33 PM

i'm quite surprised to find out that Filipinos dont actually have this kinda forced saving for future retirement plan. In Malaysia they call it EPF (Employees Provident Fund). Government dig the fund to finance infra projects and returns are about 5-6% per annum. Minimum. EPF employ top fund managers and bought shares/invest in many companies to maximise returns.

Apart from helping Filipinos save for their later days, it also help government finance many projects. But it will take years before the PERA will be large enough to be tapped as a source of finance.

Good start.

Lol wow I learn it only now and I'm shock that the government don't take a percentage of the workers' salaries to put into sss .

Probably because most of the salaries are so little. But its not a good excuse neither , because they can take the money from bigger salaries.

Askal82

August 23rd, 2008, 09:30 PM

This is somewhat similar to 401k retirement/IRA plan in the US. It's a good idea that they finally introduce this idea over there.

spearhead

August 23rd, 2008, 10:43 PM

Implemented na ba ang Bill na yan?

odyssey

August 24th, 2008, 03:52 PM

I would like to make contributions to PERA. The question is what Philippine banks with offices abroad offer this. The nearest Philippine-based bank for me is PNB.
What are the mechanics for Filipinos working/living abroad in order to tap this PERA savings fund.

licoan_kings

August 24th, 2008, 05:58 PM

I don't mean to rain on anybody's parade here but considering how badly the Philippine Government has handled money for so long now and corrupt part of it is, could you trust the Government to look after YOUR money?

odyssey

August 24th, 2008, 10:46 PM

The GSIS and SSS did not have a history of going bankrupt despite the succession of corrupt government that began in the Marcos era. Even the PSE has been profiting lately and did not get buried into debt in the past. The central bank can be trusted in keeping our dollar reserve that has been increasing in the past 5 years. The Philippine banks have been shielded from the credit crunch woes of the U.S. due to tight risk aversion and frugality. I think the Filipinos in general, are very careful investors with the exception of a few rich & greedy ones that believe in instant money growth like PICS and networking.

Weina

August 25th, 2008, 10:11 AM

what about the rumours that those in their retirement have a hard time processing their retirement funds? I know a lot of retired teachers kasi datina di nakuha ang retirement funds nila with GSIS. Sabi kasi sa kanila dati walang pera daw ang gobyerno. the problem kasi with our gov't is it is tainted with so much corruptions that causes people to lose trust completely. pano pag at the time you need your fund the gov't would tell you 'no fund is available right now'.?

bartstrife99

September 1st, 2008, 04:39 PM

Royal Bank of Scotland launches in RP market

The Royal Bank of Scotland Group (RBS) on Monday said it has re-branded ABN AMRO Bank in the Philippines as The Royal Bank of Scotland (Philippines) as part of the ongoing process to integrate and re-brand some of the ABN AMRO businesses it acquired in the takeover of the bank by the RBS–led consortium.

John McCormick, chief executive of global banking and markets for RBS in Asia-Pacific, said the integration of RBS with ABN AMRO businesses has created a stronger organization with greater resources and capabilities. He said RBS has identified Asia as a growth engine for the group "and the Philippines will play an important role in that ambition."

"Our global expertise as a group combined with the local capabilities will further strengthen our position in the Philippines, allowing us to meet clients’ needs through innovative and integrated solutions," he said in a statement.

To mark the launch of RBS into the Philippines, the bank announced Monday plans to launch its Global Transaction Services business in the country, signaling the importance of the Philippines market to the growth of RBS's Asian franchise.

RBS has moved quickly to integrate the transaction business of ABN AMRO with its existing capabilities, leading to the creation of RBS Global Transaction Services, which is currently ranked in the top five positions globally and recognised for its strong product leadership in cash management and trade finance.

"The re-branding of ABN AMRO signifies more than just a name change. As we become part of the Royal Bank of Scotland, we are now able to offer our clients a larger array of innovative products and an enhanced service platform. We are very excited about growth opportunities in the Philippines and looking forward to expanding our franchise particularly in transaction services and investment banking, where we have built a leadership position in corporate finance advisory, structured and leveraged finance," said Billy Goguingco, country executive for the Philippines, in his opening speech at the launch ceremony.

odyssey

September 2nd, 2008, 04:46 AM

Weina

September 2nd, 2008, 05:36 AM

well those i personally knew of course are not rumours. it did happened to those retired elementary teachers just don't know however if they already received their funds now.

-TC-

September 3rd, 2008, 11:05 AM

http://www.bworld.com.ph/BW090308/content.php?id=022
House ratifies credit bureau bill

BusinessWorld
September 3, 2008

THE LAST hurdle to the enactment of the proposed Credit Information System Act was removed late Monday, after the House of Representatives ratified the measure.

Manila Rep. Jaime C. Lopez, House banks and financial intermediaries committee chairman, said the bill would be immediately transmitted to Malacañang for President Gloria Macapagal Arroyo’s signature, echoing what Senator Edgardo J. Angara said Monday afternoon after the Senate ratified the measure.

The Securities and Exchange Commission (SEC) said it would begin drafting the implementing guidelines once it receives a copy of the new law.

"We have to see first the details of the final provisions before we can act on it," SEC Corporate Secretary Gerard Lukban said in a phone interview.

Mr. Lopez said the establishment of the Credit Information Corp., whose board would be headed by the SEC chairman, is not contingent on the approval of the 2009 budget.

"The appropriation will no longer undergo budget deliberations or inclusion in the 2009 budget proposals," he told BusinessWorld.

"It has gone through a special enactment which only needs the President’s signature for implementation. It already has a certification from the National Treasury."

The corporation would have an authorized capital stock of P500 million divided into common and preferred shares. The National Government would own 60% of the common shares and must shell out P75 million.

The corporation would essentially collect credit information about borrowers and disseminate them to banks, life insurance firms, credit card companies, state lending institutions, credit raters and to borrowers themselves.

It must "acquire and use state-of-the-art technology and facilities in its operations to ensure its continuing competence and capability to provide up-to-date negative and positive credit information," according to the bill
Mr. Lopez said that funds to buy these facilities would come from the P75-billion National Government appropriation.

-TC-

September 5th, 2008, 12:25 PM

http://business.inquirer.net/money/breakingnews/view/20080905-158843/Pera-tax-relief-spell-losses-for-govt

Pera, tax relief spell losses for gov’t
By Michelle Remo
Philippine Daily Inquirer
09/05/2008

MANILA, Philippines -- The government stands to lose P26.5 billion in potential revenue next year following the enactment of the Personal Equity and Retirement Act (Pera) and the decision to exempt minimum wage earners from income tax.

Based on the Department of Finance estimates, Pera is expected to cost the government P11.5 billion in potential tax collection for the government, while the income tax relief would result in P15 billion in foregone revenue for a one-year period.

For this reason, Finance Secretary Margarito Teves has urged legislators to pass new tax measures that will help generate more income for the government and offset the impact of Pera and the income tax exemption on the state’s financial position.

The measures being pushed by the DOF are the rationalization of fiscal incentives and the amendments to the Sin Tax law.

The DOF wants to rationalize the granting of tax- and duty-free privileges to businesses by limiting the coverage of the incentives to exporters and big-ticket investors.

The DOF also proposes the imposition of a uniform excise tax rate on cigarettes and another on alcohol to replace the current complex system of taxation of sin products.

“We need new measures so the government can maintain its revenue,” Teves told reporters.

Under Pera, earnings from contributions to one’s personal retirement account are exempted from income tax. Individuals who open personal retirement accounts are also entitled to a tax credit equivalent to 5.0 percent of their contributions.

To encourage employers to contribute to the retirement account of an employee, Pera allows employers to deduct the contributions from their taxable income.

Congress passed Pera to encourage Filipinos to save and prepare for their retirement.

Sen. Edgardo Angara, author of the Pera, said the law is expected to help boost the Philippines’ savings rate to between 34 and 40 percent of the country’s gross domestic product over the medium term. Currently, he said, savings rate is less than 30 percent.

In the meantime, the income tax reform bill was recently passed and took effect in July. One of the primary provisions of the law was the exemption of minimum wage earners from the income tax.

It also allows professionals and self-employed individuals to automatically deduct 40 percent from their gross earnings to determine taxable income.

The Bureau of Internal Revenue earlier said the impact of the law exempting minimum wage earners from the income tax was already reflected in the government’s tax collection performance in July and August.

Revenue Commissioner Lilian Hefti said the exemption took away P2 billion in potential tax collection in July and another P4 billion in August.

In August, more taxpayers started to observe the law as they learned about its benefits, Hefti explained.

Porknight

September 7th, 2008, 07:31 AM

The DOF wants to rationalize the granting of tax- and duty-free privileges to businesses by limiting the coverage of the incentives to exporters and big-ticket investors.
Well I hope that they won't hurt so much the market with this decision.

The DOF also proposes the imposition of a uniform excise tax rate on cigarettes and another on alcohol to replace the current complex system of taxation of sin products.

“We need new measures so the government can maintain its revenue,” Teves told reporters.

Sin products ? Btw if they decide to increase the taxation from alcohol and tobacco , I totally agree and I am a smoker. At least I'll be more happier now that I know my stupid habit is helping the government.

nostalgicbabe

September 8th, 2008, 09:13 AM

Weina

September 8th, 2008, 10:39 AM

Bangko Sentral disclosure

Market Files
Lito U. Gagni, Business Mirror, August 13, 2008

The disclosure by the Bangko Sentral Pilipinas (BSP) of the banking industry’s P89-billion exposure to the collapsing collateralized debt obligations (CDOs) in the subprime market in the United States is commendable. But not the way it views the exposure as “smallish” when ranged against the banks’ total assets of P4.48 trillion and its dismissive tone in saying the industry is insulated from the effects of the exploding mortgage market, which has so far claimed a writedown or losses of $478 billion for big foreign banks and investment houses.

Although P89 billion is less than 1 percent of the total assets of the banking industry, this “smallish” amount is not that small when viewed from the perspective of the industry’s capital, which, as per the BSP’s own data, is P462 billion as of the end of December 2007. It would be interesting to know how the banking industry would treat this CDO implosion that has already resulted in the wipeout of the erstwhile-respected Bear Stearns in the United States and the huge losses other financial institutions suffered.

Framed from this perspective, the P89 billion in CDO exposure of the banking industry, now in danger of being written off or declared as a loss, assumes an ominous 19 percent. This means that for every P100 of capital that the banking industry has—and this includes the banks’ debt issuances to bolster their capital stock by way of the hybrid and Tier-2 capital—the industry has investment exposures of P19. This is a sizable sum that the BSP has to adequately address by way of whipping the banking industry into line in raising additional capital to insulate it from the fallout of the CDO mess.

And to think that the banking industry has just come out of huge capital charges from their fire sale of foreclosed assets, raising at most P30 for every P100 in so-called nonperforming assets. The fact that the banking industry was not spared from the fallout of the exotic debt instruments that big-name investment banks packaged and then sold as prime-grade investment securities only goes to show that there is no such thing as a safe investment instrument when there are excesses in greed of the global financial industry.

A four-part series of the Financial Times on the subprime mess that tackled also the rescue of US mortgage giants Fannie Mae and Freddie Mac (where the banking industry had “smallish” exposures, too, as per the BSP) paint a rather difficult economic environment ahead: a vicious cycle where banks hurt by the subprime mess cannot be made to lend more, say, for the housing industry, that, in turn, leads to further constriction in the banks’ financial condition. And that could impact on the country’s financial risk profile, too, especially since local banks cannot be made to be forthright in terms of their exposures to CDOs.

That FT analysis showed how greed took the better of the CDO investors as investment banks sold prime-grade-rated debt securities that have as underlying asset base those of mortgage papers that were granted by banks to credit-risk housing borrowers. When banks allow borrowers, who cannot even pay for their car mortgages, to get loans for house purchases, then risk is magnified. We understand that these are the same CDO papers that local banks are invested in, to the tune of P89 billion.
http://www.businessmirror.com.ph/08132008/opinion05.html

odyssey

September 8th, 2008, 12:24 PM

I agree that Tax relief for PERA is a revenue lost from the government's end. 401k may be tax exempted while one is still contributing but once you withdraw or start receiving the benefits upon retirement, that's the time when the taxes will be applied. IRA on the other hand cuts the tax in real time. The government should emulate IRA instead.

http://business.inquirer.net/money/breakingnews/view/20080905-158843/Pera-tax-relief-spell-losses-for-govt

Pera, tax relief spell losses for gov’t
By Michelle Remo
Philippine Daily Inquirer
09/05/2008

MANILA, Philippines -- The government stands to lose P26.5 billion in potential revenue next year following the enactment of the Personal Equity and Retirement Act (Pera) and the decision to exempt minimum wage earners from income tax.

Based on the Department of Finance estimates, Pera is expected to cost the government P11.5 billion in potential tax collection for the government, while the income tax relief would result in P15 billion in foregone revenue for a one-year period.

For this reason, Finance Secretary Margarito Teves has urged legislators to pass new tax measures that will help generate more income for the government and offset the impact of Pera and the income tax exemption on the state’s financial position.

The measures being pushed by the DOF are the rationalization of fiscal incentives and the amendments to the Sin Tax law.

The DOF wants to rationalize the granting of tax- and duty-free privileges to businesses by limiting the coverage of the incentives to exporters and big-ticket investors.

The DOF also proposes the imposition of a uniform excise tax rate on cigarettes and another on alcohol to replace the current complex system of taxation of sin products.

“We need new measures so the government can maintain its revenue,” Teves told reporters.

Under Pera, earnings from contributions to one’s personal retirement account are exempted from income tax. Individuals who open personal retirement accounts are also entitled to a tax credit equivalent to 5.0 percent of their contributions.

To encourage employers to contribute to the retirement account of an employee, Pera allows employers to deduct the contributions from their taxable income.

Congress passed Pera to encourage Filipinos to save and prepare for their retirement.

Sen. Edgardo Angara, author of the Pera, said the law is expected to help boost the Philippines’ savings rate to between 34 and 40 percent of the country’s gross domestic product over the medium term. Currently, he said, savings rate is less than 30 percent.

In the meantime, the income tax reform bill was recently passed and took effect in July. One of the primary provisions of the law was the exemption of minimum wage earners from the income tax.

It also allows professionals and self-employed individuals to automatically deduct 40 percent from their gross earnings to determine taxable income.

The Bureau of Internal Revenue earlier said the impact of the law exempting minimum wage earners from the income tax was already reflected in the government’s tax collection performance in July and August.

Revenue Commissioner Lilian Hefti said the exemption took away P2 billion in potential tax collection in July and another P4 billion in August.

In August, more taxpayers started to observe the law as they learned about its benefits, Hefti explained.

lauston_rr28

September 9th, 2008, 10:12 AM

First it's only a rumor. I've only heard of one teacher who died and its the beneficiaries that have had a hard time claiming it. It's expected to happen especially when there is legality involved with the said beneficiaries. My family and my neighbors did not encounter any problems with GSIS. In fact, one of my parents got the retirement benefit in full lump-sum.

Its a different story from what I know. The actual members (not beneficiaries) had the hard time getting their retirement contributions from GSIS, reason is guess what?...no fund.
Wonder how they managed to buy P53.501-million worth of Juan Luna and Fernando Amorsolo paintings in 2002. Hmmm..
Also, there are cases that even if you are fully paid from your loans youll be suprised that such loans still do exist complete with fine and interest.

lauston_rr28

September 9th, 2008, 10:28 AM

Sorry forget to put my 2 cents in it...:)

-TC-

September 17th, 2008, 07:50 PM

http://www.bworldonline.com/BW091808/content.php?id=004

‘Depositors have nothing to fear’ — BSP

Local banks’ exposure to Lehman limited

BusinessWorld
September 18, 2008

AMPLE WHEREWITHAL will allow local banks to service their obligations and mitigate the impact of losses from the collapse of US investment bank Lehman Brothers, the Bangko Sentral ng Pilipinas (BSP) yesterday said.

"The banking system remains sound and stable. The depositors have nothing to fear at this point," central bank Governor Amando M. Tetangco, Jr. told reporters at the sidelines of a government economic briefing.

BSP Deputy Governor Nestor A. Espenilla said the worst that could happen to local banks was reduced profits, and stressed that their ability to pay obligations would not be impaired.

"There’s nothing to worry about at this time. The banking system’s asset base is P5 trillion and capital base [is more than enough]," Mr. Espenilla said.

Lehman Brothers’ collapse — the firm is so far the largest casualty of the global credit crisis — has stoked fears that a number of Philippine banks would be directly affected.

But central bank officials insisted that the exposure of local banks to Lehman was small in relation to total assets. Mr. Tetangco said the BSP had surveyed local banks and found out that exposures totalled about P15 billion or roughly 0.3% of the industry’s assets.

These were in the form of structured notes such as collateralized debt obligations, which are securities backed by pools of assets.

A number of local banks have disclosed investments in Lehman. Metropolitan Bank and Trust Co. on Tuesday said it held a total of $20.4 million worth of bonds and had set aside $14 million for potential losses. Banco de Oro Unibank said it had allocated P3.8 billion in provisions.

They were joined yesterday by Rizal Commercial Banking Corp. which said it had prepared P980 million as a buffer.

"There are some banks which have disclosed their exposures. I think this should be taken as a positive sign. It shows these banks have the resources to absorb a drop in the price of their investments in Lehman Brothers," Mr. Tetangco said.

Bank capital was adequate, he said, especially after the industry was required to set aside funds appropriate for risks being taken in line with the implementation of the Basel 2 framework.

The capital adequacy ratio, which refers to banks’ capital in relation to the risks that they take, stood at 14.71% as of end-2007 on a solo basis and at 15.7% if banks’ subsidiaries are counted. These remain above the BSP’s required minimum of 10%.

"We’ve learned from the 1997 [Asian crisis] experience. Banks have to hike capital to survive this kind of disruption. Our banks will be able to handle this," Mr. Espenilla said. — Gerard S. dela Peña

--------------------------------------------------------------------------

Fitch says no impact on credit ratings

BusinessWorld
September 18, 2008

PHILIPPINE BANKS’ exposure to bankrupt Lehman Brothers would not have an adverse impact on their credit scores, global debt watcher Fitch Ratings yesterday said.

The London-based credit watchdog noted that the Lehman-related investments were limited. While recent moves to set aside capital to cover for the losses may hurt earnings, credit ratings would not necessarily be in jeopardy, it said.

"The exposure is small compared to their capital position. Given the exposure, the impact will be modest. We don’t see downside risk in the ratings," Alfred Chan, analyst for financial institutions at Fitch Ratings, told [I]BusinessWorld.

Fitch made the assessment following a series of disclosures made by Asian banks on their exposure to failed Lehman, with Japan-based banks being listed as the bank’s largest creditors.

Yesterday, top tier bank Rizal Commercial Banking Corp. (RCBC) said it had invested in Lehman structured products tied to Philippine sovereign bonds.

The Yuchengco-led bank said it allocated P980 million as a buffer against the US firm’s potential failure to repay debts. It joined similarly listed banks Banco de Oro Unibank Inc. and Metropolitan Bank & Trust Co., which on Tuesday announced setting up provisions to cover their Lehman-related losses.

"This is to ensure that any possible writedown that may result from this exposure will have been properly and fully provided for," RCBC said.

RCBC added that the additional capital cover would come from its excess reserves, so that the move would not weigh on the bank’s capital base, currently at P27.4 billion, or capital adequacy ratio — a measure of a bank’s financial health — of 20.97%. The bank forecast a net income of P2.5-2.8 billion this year compared to P3.21 billion in 2007.

Top tier banks Bank of the Philippine Islands and China Banking Corp., as well as thrift bank Philippine Savings Bank, yesterday disclosed having no exposures in Lehman. Security Bank Corp. said that while it does not have Lehman-related assets in its books, it had $10 million worth of exposure in another US bank Merrill Lynch, which is to be gobbled up by Bank of America.

In its report released yesterday, Fitch said Asian banks’ "net exposures are small and the direct impact on banks will be limited".

"However, the agency will continue to investigate the full extent of these banks’ on-and-off balance sheet exposures and take account of potential losses that will add to the existing burden of writedowns stemming from the credit crisis."

In a separate interview, however, Mr. Chan pointed out that the ratings agency remained bullish about the adequacy of the Philippine banking industry’s capitalization.

"If we look at Asia Pacific banks in general, these are mostly healthy banks, banks with good capital buffer. In the event they do provisions, the earnings may be impacted depending on the amount of provisions but from the balance sheet point of view, the capital is expected to stay intact," Mr. Chan said. — Maria Eloisa I. Calderon

red_jasper

September 23rd, 2008, 08:54 AM

September 22nd, 2008

Metrobank jumps gun on Lehman creditors (http://www.asianjournal.com/?c=189&a=30095)
Daxim Lucas

The Philippines’ biggest bank jumped the gun Monday on its local competitors as it joined the worldwide rush to secure exposures and grab remnants of collapsed investment banking icon Lehman Brothers.

In a hastily called press conference, officials of Metropolitan Bank & Trust Co. announced that they had asked the court to place local Lehman Brothers units under a “creditor-led rehabilitation” program.

“Metrobank has taken legal action against the two Lehman Brothers subsidiaries,” executive vice president Vicente R. Cuna told reporters, explaining that the move was meant to secure Metrobank’s P2.4-billion loan to the Lehman units.

The petition—which was filed Monday with the Makati Regional Trial Court—effectively gives the claims of Metrobank seniority over other creditors and stakeholders of the 158 year-old US investment bank, who are also expected to start moving to secure their interests worldwide.

Metrobank identified the Lehman Brothers units as Philippine Investment One Inc. and Philippine Investment Two Inc., which the bank identified as “subsidiaries of Singaporean company Lehman Brothers South East Asia Pte. Ltd.”

Metrobank’s legal filing strengthens its hand in gaining control of the two firms’ assets—mostly bad loans and foreclosed assets—in the event that they are unable to continue paying their loans.

Cuna said, however, that both firms “continue to operate profitably” and were “solvent,” adding that the petitions were filed to ensure the continued normal operations of the companies and defer all claims, actions, and proceedings against them.

“This creditor-led rehabilitation is a preemptive move to protect the bank against possible dissipation of assets by foreign claimants,” he said, adding that Metrobank’s loans to the two firms remained current.

Cuna said Metrobank was the first creditor to initiate legal moves against the Lehman units, which have also outstanding loans from another local bank which he did not identify.

The Lehman firms are so-called “special purpose vehicles” that hold bad loans and foreclosed real estate assets that Lehman Brothers bought from local financial institutions at a steep discount for eventual resale at a profit.

Between 2006 and 2007, the Lehman units acquired bad assets from Development Bank of the Philippines at a discount to their P9.95 billion face value, and another discounted set of bad assets from United Coconut Planters Bank with a face value of P8.68 billion. The acquisitions were partly funded by a P2.4-billion loan from Metrobank.

Both SPVs are also involved in a legal dispute with restaurateur Victor Villavicencio, who claimed that the firms acquired his foreclosed properties in violation of the Constitutional prohibition against foreign ownership of land.

Igsuonnimo

September 24th, 2008, 11:22 AM

AMLC recovers P1.4-B dirty money from suspicious bank accounts
By Delon Porcalla
Tuesday, September 23, 2008
The Philippine Star

The Anti-Money Laundering Council has recovered P1.4 billion worth of “dirty money” from so-called suspicious multimillion-peso bank accounts, but the government only allocated P15.6 million to the agency for administrative operating expenses for 2009.

“The irony of it is we regularly turn over (to the government) the money that we are able to forfeit, but not a single cent goes to us,” AMLC executive director Vicente Aquino told newsmen, after he presented the agency’s proposed budget for next year.

Aquino, who is also the assistant governor of the Bangko Sentral ng Pilipinas, said they have proposed a P34-million budget, but that the Department of Budget and Management gave them a measly P15.6 million.

Aquino revealed that there is now a proposal for agencies like AMLC to get a share of the funds that it was able to recover, in terms of winning court cases and the forfeiture of assets of corrupt government officials who have amassed ill-gotten wealth.

“We have a proposal to get a share, 25 percent net of the total cost of litigation,” he said.

But while the amount DBM allocated was minuscule, a sub-committee of the House appropriations committee headed by Pangasinan Rep. Mark Cojuangco restored the AMLC’s original P34 million budget.

“I’ll try to fight it out here (in the House). But let’s try to protect it this time,” Cojuangco told the AMLC team, referring to the P30-million budget they approved last year, but which was slashed in the bicameral conference committee that left only P15.2 million.

Aquino also reported to the House panel that they already have incurred debts from the BSP, which has been subsidizing their salaries and operational expenses, but the Commission on Audit has been questioning BSP’s “kindness.”

He told newsmen they have incurred P27 million in debts since AMLC was created in 2001.

“We are also required to reimburse the BSP. The BSP has been very kind in subsidizing us, but this cannot go on forever. The COA is questioning the BSP for being so kind,” Aquino disclosed.

Aquino pointed out that their US counterparts have a $450-million yearly allocation, and those in Australia and Singapore are also better funded. But Agusan del Sur Rep. Rodolfo Plaza said these are advanced countries.

“We are way, way below insofar as the budget (of the other countries’ AMLC) are concerned,” he said. “We want to make it (AMLC) more effective as the country’s intelligence unit. But if we were a ship, we would have sunk already.”

www.philstar.com

Igsuonnimo

October 1st, 2008, 03:43 PM

SMC eyes control of Bancommerce
October 1, 2008 Wednesday
www.philstar.com
Zinnia dela Peña

The San Miguel Group is eyeing to complete the acquisition of a controlling stake in medium-sized commercial bank Bank of Commerce by November 2009.

The San Miguel Group, through its real estate unit San Miguel Properties Inc. (SMPI), and its retirement fund San Miguel Corp. Retirement Plan, currently owns 34.3 percent of Bancommerce.

In a disclosure to the Philippine Stock Exchange, SMPI said the group is infusing an additional P2 billion into Bancommerce to increase its stake to 51 percent.

“The closing of the transaction and payment of the subscription price for the sale share are subject to the satisfaction of certain conditions, including the issuance of applicable government approvals,” SMPI corporate information officer Ferdinand K. Constantino said.

The new investment will bring the San Miguel group’s total investment in the bank to P4 billion which, in turn, will raise the bank’s total capital base to approximately P10.42 billion.

Bancommerce is currently controlled by Antonio “Tonyboy” Cojuangco, a nephew of San Miguel chairman Eduardo “Danding” Cojuangco.

Funding for the acquisition will come from internally-generated cash, payable in four tranches of P500,000 each.

Part of the proceeds from the sale will be used to expand the bank’s branch network expansion nationwide and loan portfolio.

With the acquisition of a controlling stake, Bancommerce would serve as SMPI’s retail arm for financing for its various residential condominium projects.

The bank could tap SMPI’s customer base by offering investment and deposit products, home improvement and appliance financing.

The services of the bank could likewise be availed of by the San Miguel Group for its diverse and nationwide operations, particularly to service the financing needs of the group’s dealers, agents and wholesalers for depository and payment channels, guarantees, letters of credit, credit lines, loans and discounts. – Zinnia dela Peña

Igsuonnimo

October 1st, 2008, 03:49 PM

BDO raises P5 B in capital buildup
By Ted P. Torres
October 1,2008 Wednesday
www.philstar.com

Banco de Oro Unibank Inc. (BDO) has completed the issuance of 500-million preferred shares, raising P5 billion for its ongoing expansion and Tier 1 capital build-up.

“The shares were issued through private placement to not more than 19 subscribers and to qualified buyers,” BDO said in a disclosure to the Philippine Stock Exchange.

BDO corporate information officer Elmer B. Serrano earlier said the indicative fixed dividend rate of the preferred share issue is 6.5 percent per annum.

Other features of the preferred share offer are: the shares are convertible into common shares three years from issue date; the shares are non-cumulative and non-participating; they qualify as Tier 1 capital; they are considered voting shares; and are perpetual in nature.

“The bank aims to undertake and complete this offer or its series A preferred shares from September to November 2008,” Serrano added.

Earlier this year, BDO issued P10-billion in unsecured subordinated debt notes.

The issue, which is also eligible a Lower Tier 2 capital, carried a coupon rate of 8.5 percent per annum and issued at 100 percent of face value. The issue was priced tightly against the five-year government bond yield.

The funds raised for the issuance of preferred shares and the P10-billion notes will be used to support BDO’s expansion plans. It will also increase and strengthen BDO’s capital base “ensuring that it has available capital for its growth plans in the coming years.”

BDO is the country’s second largest bank with assets of P676.7 billion. It has the biggest trust banking operations with assets under management of P294.2 billion and is among the market leaders in its core business lines, with a nationwide network of 657 branches and close to 1,200 ATMs.

Weina

October 3rd, 2008, 06:24 AM

Local banks complain of tight US$ liquidity (http://www.bworldonline.com/BW100308/content.php?id=)

THE PHILIPPINE money market has not been spared from the global credit squeeze that has forced banks to grapple for ways to secure dollars, industry officials said yesterday.

With worldwide credit markets and interbank lending frozen, dollar liquidity among Philippine banks has been particularly tight in the past weeks as offshore banks, wary of the next domino to fall after the collapse of Wall Street’s storied financial firms, shut their doors to borrowers they deemed risky.

"That the credit market is choked or at a standstill is in many ways true. If we look at where the LIBOR is trading, it’s a clear sign that banks are wary of lending to each other offshore," Raul Martin A. Pedro, a subcommittee chairman at the Money Market Association of the Philippines, told BusinessWorld.

"What it is doing for Philippine banks is that it is a little more difficult to get dollar funding should we need to."

Banks need the dollars to serve the requirements of client importers, in particular, who open letters of credit with them.

The overnight dollar LIBOR, or the London Interbank Offered Rate, which is the world’s most widely used benchmark for short-term interest rates, had spiked 4.3 percentage points — a record one-day rise — to 6.875% early in the week, more than three times the US Federal Reserve’s key federal funds rate.

The federal funds rate is used by US banks when lending overnight to one another.

Hoarding cash has become the norm and with interbank lending nearly paralyzed, domestic banks have turned to the currency swap market for the much-needed dollar funding.

"Banks worldwide are trying to protect their capital and liquidity. For the Philippines, it’s the same thing," said Vandemir C.T. Say, president of the Chartered Financial Analyst Philippines.

The currency swap, which is essentially a money market instrument, allows local banks to buy dollars using pesos on the agreement they will sell the US currency back. It is a foreign exchange transaction that involves the exchange of principal and interest in one currency for another currency.

The high demand for dollars has buoyed the swap market, with the interest rate differential between the two currencies pushed to lows. But since dollar borrowing is being funded with pesos, banks have resorted to dumping their local currency-denominated bonds, dragging bond yields despite the double-digit inflation environment.

"Because banks wanted to be assured of dollar funding, the dollar-peso swap market interest differential has been pushed low," Mr. Pedro pointed out.

But with the progress in the US government’s bid to save its troubled financial system, the tight dollar liquidity could ease, said Marcelo E. Ayes, Rizal Commercial Banking Corp. (RCBC) senior vice president for financial markets.

"The swap points being quoted last week were negative. But now that’s not the case. The recent development — the Senate’s signing the $700-billion bailout package — is creating the liquidity needed. You can now borrow dollars cheaply," the market analyst said.

The central bank echoed the view that the dollar squeeze in the money market should be short-lived.

"There’s ample dollar liquidity in the system. There was only momentary tightness that has since corrected as evidenced by more normal spreads now," Bangko Sentral ng Pilipinas Deputy Governor Nestor A. Espenilla, Jr. said in a text message to BusinessWorld.

jvl

October 6th, 2008, 12:26 PM

Most RP banks have investments overseas. So they surely will be affected by changes to the world economy. I just hope that the OFW's hard earned money is safe. Now-a-days, withdrawing US Dollars from banks in the provinces usually takes 2-3days.....bank policy?

Weina

October 10th, 2008, 08:56 AM

PDIC wants stronger oversight
(http://www.bworldonline.com/BW101008/content.php?id=021&src=2)
THE PHILIPPINE Deposit Insurance Corp. (PDIC) posed no objection to the increase in the maximum deposit insurance coverage but stressed that this move should be accompanied by measures to beef up its capital and strengthen its oversight powers.

In a statement, PDIC President Jose C. Nograles asked for a package of "corollary measures" to accompany the increase in the insured deposit ceiling to P500,000 from P250,000.

These measures are:

* an increase in the PDIC capitalization;
* authority to conduct independent bank examinations;
* authority to assess risk premium on banks;
* authority to determine which deposits are covered by insurance; and
* a bridge bank authority.

Mr. Nograles said these measures are necessary to ensure that the increase in the maximum deposit insurance coverage would translate into higher depositor protection, better depositor confidence and a stronger banking system.

House Bill 5315 has been filed at the House of Representatives, seeking to double the insured deposit ceiling by 100%. Its authors, House Speaker Prospero C. Nograles and Manila Rep. Jaime C. Lopez, chairman of the banks and financial intermediaries committee, said it is imperative that depositors remain confident in banks amid the global financial meltdown.

Mr. Nograles said that 97.2% of all bank deposits would be covered by insurance if the ceiling were raised to P500,000, up from 95.1% at present.

He pointed out, however, that a capital infusion into PDIC is needed if the Deposit Insurance Fund, where insurance payments are sourced, were to remain adequate given the higher insured deposit cap.

The fund stood at P54.3 billion as of December, of which P3 billion represented the government contribution. Mr. Nograles wanted the fund strengthened to P100 billion.

He also said PDIC should be allowed to conduct bank examinations without first seeking permission from the Monetary Board and to hold these examinations even before a year is up.

Present rules require a Monetary Board go-ahead, while examinations are banned within a year from the last examination. Mr. Nograles said "the inability of the PDIC to move swiftly increases its exposure."

As a result of its examination, the PDIC should be allowed to impose additional risk premium over the existing 20-basis-point flat rate on banks at risk.

"Imposing additional risk premium... will enable PDIC to manage its risks as an insurer," Mr. Nograles said.

To allow PDIC to manage its risks, it should be furthermore allowed to examine which deposits are covered by insurance.

And lastly, Mr. Nograles is asking for a bridge bank authority as bank failure resolution.

A bridge bank authority would allow the government to take over a failed bank by acquiring its assets and assuming the liabilities until a final resolution is reached. It deviates from the "paybox" system where the PDIC automatically acts as receiver and liquidator of a failed bank.

jvl

October 13th, 2008, 10:45 AM

^I think it is about time PDIC raise the ceiling for Deposit Insurance to encourage more depositors. Is that 250,000 applicable to rural and trift banks as long as they are member of PDIC?

-TC-

October 13th, 2008, 11:12 PM

^I think it is about time PDIC raise the ceiling for Deposit Insurance to encourage more depositors. Is that 250,000 applicable to rural and trift banks as long as they are member of PDIC?

Yes that includes all thrift and rural banks that are members of PDIC.

espresso1018

October 14th, 2008, 08:19 AM

Hmm, how much is the deposit insurance right now? 100,000 pesos pa rin ba? Oo nga noh? Why don't the PDIC increase deposit insurance. I agree that it would increase the confidence of the depositors in the banking system even if there are not so good times in the economy or in the financial industry. In that way depositors won't panic and it will keep them stable.

Lucentino

October 14th, 2008, 09:21 AM

-TC-

October 15th, 2008, 02:45 PM

^^Article said PDIC insurance is 250,000 Pesos.

I think people are comfortable and satisfied with the performance of Philippine Banks. And i guess the BSP at this point has a certain degree of capability to bail out a bank in trouble.

And yes, increasing the insurance would greatly boost the confidence of depositors, but what will be it's implications to the banking industry?

It has been at 250k for a few years already.

Implications of increasing PDIC coverage? Well, this would mean lower interest rates for placements of depositors since banks now would have to pay bigger premiums to PDIC. Remember that higher insurance coverage means higher premiums.

Lucentino

October 16th, 2008, 04:07 AM

^^I think its ok, as long as deposits are secure at this point in time. Most people place their money in banks primarily for security reasons. If they want their money to earn.

Recently, most industrialized countries gave full government guarantee on bank deposits.

Weina

October 16th, 2008, 09:40 AM

BPI to raise up to P15B for acquisitions (http://business.inquirer.net/money/breakingnews/view/20081016-166669/BPI-to-raise-up-to-P15B-for-acquisitions)

MANILA, Philippines -- (UPDATE) Bank of the Philippine Islands, the country's third biggest lender, said on Thursday it would raise as much as P15 billion ($313 million) via a lower tier 2 capital issue to fund possible acquisitions.

The bank's parent, Philippine conglomerate Ayala Corp., said earlier this month it was interested in acquiring the Philippine flagship of the American International Group Inc.

Prominent local businessmen such as Henry Sy of SM Investments Corp. and Alfonso Yuchengco of Rizal Commercial Banking Corp. have also expressed interest in the Philippine American Life and General Insurance Co (Philamlife), the country's biggest insurer.

BPI said in a statement its board of directors had approved a plan to raise P10-P15 billion in a lower tier 2 issue "in anticipation of possible emerging acquisition opportunities."

"This move will allow the bank to effectively respond to any opportunity that may arise," BPI said.

BPI, a 157-year old bank with a market value of $2.9 billion, has grown over the years mainly through mergers and acquisitions. In the current decade, it gobbled up Far East Bank and Trust Co. in 2000, the local unit of DBS Bank in 2002, and Prudential Bank in 2005.

The lender also owns BPI/MS Insurance Corp., which was formerly known as FGU Insurance Corp, Universal Reinsurance Corp., Ayala Life Assurance, Ayala Health Care, and pre-need firm Ayala Plans.

AIG has yet to decide whether it would sell the $3.6 billion Philamlife and its units in one transaction or break up the group and sell to various investors.

Jose Cuisia, Philamlife chief executive, told reporters on Thursday the company would decide next week on which investment banks to hire to handle the Philippine divestment of AIG.

Cuisia said AIG has received offers from about 10 local and foreign groups for Philamlife after it was declared among the assets being sold by the US insurer to pay off its costly lifeline loan from the US government.

-TC-

October 16th, 2008, 04:48 PM

Reposting...

BPI to expand in Europe despite slowdown
BusinessWorld
October 14, 2008

AYALA-led Bank of the Philippine Islands (BPI) will proceed with its plans of expanding its presence in Europe despite the challenging economic conditions worldwide.

Remittances from that part of the globe should remain robust, said BPI, which beat rival banks last year in terms of cornering the overseas Filipino market. "We believe in infrastructure building. We believe things will be better in the long run," Teresita B. Tan, BPI senior vice-president and head of the Overseas Banking and Channel Services Group, told BusinessWorld on the sidelines of a briefing yesterday.

BPI is currently preparing to open four new branches of its London-based subsidiary, BPI Europe Plc. The four new branches, which will be in Milan and Rome in Italy, and Madrid and Barcelona in Spain, were slated to open sometime in June or July next year, Ms. Tan said. The bank opened its European subsidiary in Threadneedle Street in London last year. It opened its first branch in Earl’s Court Garden, also in London, last month.

The countries were selected on the basis of high concentration of Filipino workers and migrants, whom BPI provides remittance-related services to, Ms. Tan said.

http://www.bworldonline.com/BW101408/content.php?id=023

red_jasper

October 20th, 2008, 05:00 AM

BSP exec: Traveling persons must declare cash amounting to over $10K
10/20/2008 | 10:20 AM

MANILA, Philippines - A Bangko Sentral ng Pilipinas (BSP) official on Monday said "administrative sanctions" await those who go out of the country without declaring if they carry more than $10,000.

BSP corporate affairs director Fe dela Cruz made the statement over radio dzBB amid the scandal involving former Philippine National Police comptroller, Director Eliseo dela Paz who was held in Moscow, Russia last week for failing to declare 120,000 euros (P6.9 million) in "contingency funds" he brought for other police officials who attended the 77th Interpol Assembly.

"Pag hindi dineclare may administrative sanctions na pinaguusapan," said dela Cruz. "Merong mga konting kaparusahan na kaakibat non."

Dela Cruz said that while the BSP has liberalized its rules regarding the bringing of foreign currency to other countries, the amount must be declared to Philippine airport authorities.

"Niliberalize na ng Central Bank yung pagdadala ng foreign currency," said Dela Cruz. "Pero ang kailangan pagdating natin sa airport ideklara mo na meron kang dala...kumbaga kung more than $10,000 dollars, ide-declare mo."

Dela Cruz said those who carry more than $10,000 must fill out forms at the airport: one for airport authorities, one for the Anti Money Laundering Council, and one for the traveler.

Dela Paz is expected to arrive in the country Tuesday, where a Senate grilling awaits him and other PNP officials over the cash scandal. - Johanna Camille Sisante, GMANews.TV (http://www.gmanews.tv/story/128079/BSP-exec-Traveling-persons-must-declare-cash-amounting-to-over-10K)

jpdm

October 20th, 2008, 07:47 AM

espresso1018

October 20th, 2008, 07:56 AM

espresso1018

October 20th, 2008, 08:02 AM

This policeman dont get it.

The government is doing everything to bring in money form other countries and yet this guy just brought out hundreds of thousands of foreign currency for a junket.

Masyado na yata talagang makakapal at walang pakialam ang ibang Pinoy lalo na yung ibang mga kawani sa pamahalaan.

I think the Ombudsman has started gathering information about the issue on the 6.9 million pesos carried by the retiree. It's really weird knowing that he could not have gotten out of the country so easily had he declared he had such a huge sum with him.

But I have this doubt if the money was really brought from the Philippines to the conference. What if it was amassed in Moscow? Hmm. The Ombudsman must look into this matter so that the PNP rank may be cleaned from erring officials too.

-TC-

October 20th, 2008, 03:12 PM

http://business.inquirer.net/money/breakingnews/view/20081019-167284/Credit-squeeze-not-likely-in-RP

Credit squeeze not likely in RP
By Doris Dumlao
Philippine Daily Inquirer
10/19/2008

THE UNPRECEDENTED CREDIT SQUEEZE now clogging western financial markets is not likely to spread to the Philippine banking system, European financial giant Deutsche Bank said.

The Bangko Sentral ng Pilipinas nevertheless announced on Friday new measures to boost the flow of money in the local financial system and minimize any backlash from a potential global recession arising from extraordinary financial stress and high commodity prices.

In a commentary dated Oct. 7, Deutsche Bank shared the view that the Philippine financial system seemed a “picture of calm amidst the global storm.”

It noted that the country’s biggest bank, Metropolitan Bank and Trust Co., had recently issued P5.5 billion of subordinated notes qualifying as tier 2 or supplementary capital at an interest rate of 7.75 percent, a mere 32-basis point spread over the equivalent government debt issuance.

It also cited Banco de Oro Unibank Inc., which recently raised P5 billion worth of hybrid notes qualifying as tier 1 or core capital at 6.5 percent.

“In fact, over the last five months alone, local banks have raised P32 billion worth of paper at quite thin spreads over the local risk-free rate. This is happening at a time when the likes of triple A-rated GE (General Electric) in the US can only get funding at 10 percent in US dollar,” the commentary said.

“It is important to note, in our view, that these funds were raised not to shore up damaged balance sheets. They were instead used to either fund maturing obligations (at much lower cost than the ones replaced) or to fund future growth,” it stressed.

The German bank noted that the local banking sector was growing its loan book at the fastest pace since the 1997 Asian currency crisis. Based on the latest Bangko Sentral data, lending by Philippine commercial banks net of placements with the central bank grew at a faster pace of 21.1 percent year-on-year in August from 18.5 percent in July despite the worsening credit crunch in the western world.

In 2007, loan growth was about 8 percent, already an improvement from the contraction seen from 1999 to 2006. But loan-to-deposit ratios were still less than 60 percent, the bank pointed out, which means that for every P1 generated as deposit, less than 60 centavos were lent out.

“The banking sector loans are still less than 30 percent of gross domestic product (GDP) compared to nearly 60 percent in 1997,” Deutsche Bank said. “There is no evidence of over-leverage (overborrowing) in the system.”

At the same time, the non-performing loan ratio of 3.98 percent as a ratio of total loans was the lowest level seen since the Asian crisis.

Deutsche Bank said a case could also be made that Philippine banks -- particularly Bank of the Philippine Islands -- could be considered a “defensive” stock worth holding on despite an uncertain environment.

-TC-

October 20th, 2008, 03:23 PM

http://business.inquirer.net/money/breakingnews/view/20081019-167283/Govt-eyes-P45-B-equity-in-PDIC

Gov’t eyes P45-B equity in PDIC
By Doris Dumlao
Philippine Daily Inquirer
10/19/2008

THE GOVERNMENT PLANS TO INFUSE P45 BILLION IN FRESH equity into state-owned Philippine Deposit Insurance Corp. using a similar scheme being worked out to recapitalize the Bangko Sentral ng Pilipinas.

The move is expected to boost local banking regulation and depositor protection given the global financial meltdown.

In an interview at the sidelines of his meeting with top BSP officials last week, PDIC president Jose Nograles said the cash infusion would beef up the country’s deposit insurance fund, or source of insurance payments, to P100 billion from P55 billion.

Upon the suggestion of presidential economic adviser and Albay Gov. Joey Salceda, Nograles said the plan was for the national government to issue a multi-year obligation authority (MYOA) or written commitment to allot additional funds for PDIC, the central bank’s co-regulator of the banking system.

“It’s really part of defensive financial strengthening. We’ll have authority to access some money if needed. We’re in a stable position so we don’t have to raise the funds immediately,” Nograles said.

The P45-billion cash infusion is among the key reform measures sought by PDIC now that Congress is keen on amending its charter to pave the way for the doubling in deposit insurance coverage to P500,000 a depositor.

Based on discussions with legislators, Nograles said it was possible that the PDIC charter amendments would be passed within the year. He said congressmen would like to prioritize this piece of legislation to shield the country from the worst financial shakeout to hit the United States and Europe since the Great Depression in the 1930s.

“It’s because of the urgency of shoring up our deposit insurance fund. This is part of confidence-building -- that people know that we can access up to P100 billion and government can fund us up to P100 billion,” Nograles said. “It’s a defensive, preemptive measure. If you look at other countries, some even gave blanket guarantees.”

The PDIC chief’s brother, Speaker Prospero Nograles, and Manila Rep. Jaime Lopez have already filed a bill in the Lower House seeking amendments to the PDIC charter. A counterpart bill has been filed in the Senate by Sen. Francis Escudero.

At the proposed P500,000 level of insured deposits, 97.2 percent of all deposit accounts in the banking system will be fully covered by insurance, compared to 95.1 percent at present, based on the PDIC’s estimate.

“At 97.2 percent (insurance coverage), that means we can protect immediately all the small depositors,” Nograles said.

The scheme considered for PDIC’s fund-raising, similar to a framework developed to raise P40 billion in additional capital for the BSP, will allow the deposit insurer to get new money while the cost to the government will be staggered over a long-term period.

Based on such concept, the government through the Department of Budget and Management will sign the MYOA to appropriate from its budget a certain amount each year, for instance for the next 10-15 years. The government will set up a special purpose trust (SPT) that will float bonds backed by the state’s multi-year written commitment.

-TC-

October 20th, 2008, 03:26 PM

http://business.inquirer.net/money/breakingnews/view/20081019-167289/JP-Morgan-expects-RP-to-weather-crisis

JP Morgan expects RP to weather crisis
By Doris Dumlao
Philippine Daily Inquirer
10/19/2008

THE PHILIPPINES HAS “SIGNIFICANT” exposure to an emerging global recession but has built up internal buffers to cushion against external shocks, American banking giant JP Morgan said.

In its latest emerging market research dated Oct. 16, JP Morgan held the view that local monetary and fiscal policymakers were well-positioned to act, if needed, to help perk up domestic output given the uncertainties in the global economy.

JP Morgan estimated that every percentage point drop in US growth would shave 0.4-0.5 percentage point from the growth in the Philippines’ gross domestic product (GDP), or the sum of all goods and services produced by the local economy in a given period.

Remittances are also directly exposed since more than 30 percent of overseas Filipino workers (OFWs) are based in the United States, the research said.

But JP Morgan noted that there had been minimal bond financing by Philippine corporations. It added that real estate and stock market prices have previously moved up but still lagged many of their regional peers, thus dismissing concerns that they were nearing “bubble” type levels.

“Bank foreign funding both as a percent of GDP and as a share of total bank liabilities is manageable and derivatives licenses had been given out prudently, so there has been no excessive activity there,” it said.

And as inflation has peaked and now on track to slow down to single-digit levels by February or March next year, JP Morgan said a return to the 2.5-4.5 percent range would be possible by the middle of 2009.

“Rice itself, which alone makes up 9.36 percent of the CPI (consumer price index) basket, has seen its price start falling in August and forecasts point to favorable weather through early 2009,” the research said.

After a series of interest rate increases sanctioned since June this year, the Bangko Sentral ng Pilipinas paused on its monetary-tightening campaign now that price pressures were softening and inflation expectations also easing.

“Fiscal policy is also well-positioned. The postponement of the balanced budget target to 2010 was already a compromise, done in reaction to concerns over global growth. And if needed, additional fiscal stimulus measures could be deployed,” JP Morgan said.

The International Monetary Fund defines global recession as a slowdown in global growth to 3 percent or less. In its latest world economic output forecast, the IMF has projected such a major downturn by next year.

Meanwhile, JP Morgan said the Philippines’ balance of payments (BOP) would be under strain but still looked resilient on receipts from overseas Filipinos, tourism as well as the fast-growing business process outsourcing (BPO) sector.

The BOP measures the foreign exchange transactions between the local economy and the rest of the world. Any transaction that gives rise to outflows like a pullout of foreign investments, importation or debt servicing is a deficit item in the BOP, while any that gives rise to inflows like borrowing, exporting or overseas remittance is a surplus item.

“OFW remittances continue to grow and importantly, should be more resilient as the quality of workers deployed has improved, as reflected in the rise in their average incomes,” the paper said.

“Tourism receipts are rising as we head toward the peak season in the fourth quarter,” it added.

Inflows from BPO operations, largely relocating from India and China, are also diversifying from just call centers to areas, such as software development, medical and legal transcription and are now bringing in $3-$4 billion a year, the research noted.

“As costs are cut in developed markets in a global recession, BPO activities could actually rise,” JP Morgan said.

It said the country’s gross international reserves were expected to end the year higher at $37 billion, despite the decline in the current account surplus.

“Lastly, in terms of an external liquidity buffer, recall that the Philippines has about $30 billion in foreign currency deposit units in the banking system which can be used for the US dollar needs of local (firms),” it said.

teresa1

October 21st, 2008, 09:15 AM

swahi

October 21st, 2008, 09:22 AM

bankrupt or corrupt? What do you call investing in a Philippine painting of some dead pinoy painter just so that we can say welcome home, philippine heritage? What will the GSIS member say? So bankrupt or corrupt? Or is there no difference between the two?

barrera_marquez

October 21st, 2008, 02:47 PM

Kapag mga titser kaharap, walang pera pero kapag Meralco buyout ang usapan... malala pa sa PNP Russia Scandal ang kaya nilang ilabas... :ohno:

odyssey

October 21st, 2008, 02:55 PM

Ang katotohanan - Ang GSIS ay KUMITA na 5% sa kanilang overseas investment.
Ang GSIS ay kumita ng 1.25 Billiong PISO. .

Beware of the ABS-CBN and Meralco and LowPus smear campaign on Garcia. Garcia did a heroic job of exposing Meralco's Scam Practices.

GSIS ekes out 5% gain despite market turmoil
http://www.manilastandardtoday.com/?...ews1_oct6_2008
By Joyce Pangco Pañares

DESPITE the global financial crisis, the state-owned pension fund Government Service Insurance System claims to have gained $30 million, or a 5-percent increase, on the investment it made in the United States five months ago.
GSIS president and general manager Winston Garcia announced the earnings even as Palace officials urged the government employees’ pension fund to release information on the Global Investment Program it started in April, when the US was already in a financial crisis.

“The proof of the pudding is in the eating. This is a significant achievement, especially since we’re barely five months into the program,” Garcia said in a statement announcing that the $600 million it had invested with US fund managers in April had earned a return of $30 million (P1.25 billion) as of Sept. 30.
“Based on the early results, I can assure our members that we are headed in the right direction,” Garcia added, dismissing his critics’ demand that he release a detailed accounting of the fund’s foreign investments over the past 12 months.
Opposition Senators Mar Roxas, Francis Escudero, and Aquilino Pimentel Jr. earlier made the demand after the GSIS announced earlier this year that it would undertake a three-year, $1-billion Global Investment Program overseas, with ING Investment Management and Credit Agricole Asset Management as fund managers and US-based Citibank N.A. as custodian.
The pension fund has since declined to reveal where its managers had invested the money or the basis of the 5-percent profit it claims to have made.

But top presidential aides said it was standard practice for international fund managers to treat their clients’ accounts with confidentiality. Still, Executive Secretary Eduardo Ermita and Press Secretary Jesus Dureza agreed that the GSIS should be more transparent to assuage public fears.

“They have to tell us if there was exposure because that is the public’s money they are using,” Ermita said in a telephone interview, referring to American financial institutions Lehman Brothers and American International Group that have sought financial assistance from the US government.
Dureza said it was understandable that some GSIS investors would raise confidentiality issues if the fund managers were required to disclose its investment strategies.

“We have to contend with investors who do not want to publicly release information on the investments, but as a whole, releasing this information would assuage the concerns of the public. There is a need for transparency,” Dureza said in a separate interview.
“The GSIS’ investment is just a drop in the big ocean of the US credit problem, but we must provide our public with as much information as we can to end the speculation.”

But Garcia repeated his earlier statement denying any exposure in the US financial giants that are facing difficulties. “May I reiterate that we exactly have zero exposure in Lehman and AIG,” he said.

He said the pension fund had to invest its money overseas because “the absorptive capacity of the local market is just too limited for the investible funds of the GSIS.

“At the same time, when things go bad, we should not press the panic button immediately. We’re in for the long haul. Any educated judgment on the performance of the investment should be rendered at the end of the program, not a few months into it. That’s why it’s called long-term investment.”

Garcia said the pension fund’s foreign investments were fully diversified geographically and in asset quality, thus shielding those from the effects of the current US crisis.
He said the GSIS required that it deal only with fund managers who had at least $100 billion in assets under their management.
The fund managers were allowed flexibility to determine their investment strategy, but they were also required to comply with an absolute annual return requirement of 8 percent and a ceiling of 7 percent on portfolio volatility.
Besides, Garcias said, the pension fund’s investment “was able to withstand the full, initial impact of Lehman’s fold-up,” but declined to reveal details.
Garcia said initial returns on the GSIS’ investments showed it could proceed to the second stage of the investment program.
“We are proceeding, although as a matter of prudence, we have required all our potential bidders to disclose their exposure in the US market because of this economic turmoil,” he said.
“That will be a part of our consideration. We have to require them to make the proper disclosure, especially their asset-backed or mortgaged-backed investments.”
__________________

jpdm

October 21st, 2008, 03:19 PM

Is GSIS bankrupt? Rumors is that they invested people's savings to the bankrupt Lehman Brothers in the US. If the answer is yes, the future of millions of matatanda is similar to Russian Roulette. Someone should be punished for this!!!

Hindi naman.

Pero dapat GSIS should not bring out or invest its funds abroad. Kulang nga ng foreign investments dito inilalabas naman nila.

Why not put money on local blue chip companies as a sign of confidence to pinoy enterprises.

Tinulungan pa nila government.

paging Mr. garcia

odyssey

October 21st, 2008, 03:39 PM

Hindi naman lahat ng pondo ay na-invest ng GSIS sa ibang bansa - konting porsyento lang. Mas malaki ang kikitain sa ibang bansa at puede naman paikutin ni Garcia yung kinita ng pondo - na yung sobrang pera ay puede i-invest ulit sa Pilipinas.

-TC-

October 24th, 2008, 02:35 AM

http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=910:house-may-change-deposits-insurance-coverage-to-p1m-&catid=25:bankingandfinance

House may change deposit’s insurance coverage to P1M
BusinessMirror
October 23, 2008

FOLLOWING President Arroyo’s announcement of her desire to quadruple the guarantee for bank deposits to P1 million, the chairman of the House banking and financial intermediaries is considering an amendment to a bill which originally proposes raising the maximum deposit insurance coverage from P250,000 to P500,000.

On Thursday Lakas Rep. Jaime Lopez of Manila supported the Malacañang proposal, describing the move as a “stronger confidence-building measure.”

Thus, Lopez proposed to amend House Bill 5315, which he and Speaker Prospero Nograles principally authored.
The bill, now at the committee level, seeks to amend the charter of the Philippine Deposit Insurance Corp. (PDIC) by raising the insured deposit ceiling to P500,000 from P250,000.

The move to increase the maximum deposit insurance coverage from P250,000 to P500,000 under House Bill 5315 may now be increased to P1 million per account under the Malacañang proposal.

Lopez said he and Nograles initially proposed a 100-percent increase to P500,000, considering that the PDIC may not have the necessary capacity to carry out effectively such a big responsibility.

He said the proposed amendment is a proactive confidence-building measure ahead of a possible adverse impact by the global financial crisis on the banking sector.

Lopez also said the proposed P50-billion bailout fund or additional capitalization for the PDIC could be in the form of an emergency standby measure and may be released to the insurer only if and when needed.

“And the proposed 100-percent increase, or 300-percent increase in the maximum deposit insurance coverage as the case may be, will not entail any increase in the premium or assessment to be paid by the banks to the PDIC, as the existing law has already fixed the maximum rate of assessment, which is one-fifth of 1 percent of the total deposit liabilities,” he said.

According to Lopez, no matter how strong the banking system is, it can only survive on the trust and confidence of the public.

“If this trust and confidence is shaken, the stability of the banking system will definitely be eroded,” he added.

Meanwhile, PDIC president Jose Nograles said in a statement that his company fully supports the proposal of President Arroyo to increase the maximum deposit insurance coverage (MDIC) fourfold to ensure stability in the financial system amid the global credit crisis.

Nograles said the higher cap is a preemptive measure in response to the deepening crisis. He quoted President Arroyo as saying, “it is better to have it now while we still don’t need it, than to need it later and don’t have it.”

This will be a temporary increase for a period of three years. However, the PDIC is proposing to have the authority to extend and further adjust the MDIC whenever there are conditions threatening the monetary and financial stability of the country as determined by the Bangko Sentral ng Pilipinas, the secretary of finance, and the National Economic and Development Authority.

The proposed MDIC at P1 million, 98.4 percent of all deposit accounts will be fully covered by insurance, compared with 95.1 percent at the current level of P250,000. This will be full coverage for practically all small depositors.

-TC-

October 24th, 2008, 02:38 AM

http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=964:bsp-oks-easing-of-mark-to-market-rule-for-banks&catid=23:topnews

BSP OK’s easing of mark to market rule for banks
Jun Vallecera
BusinessMirror
October 24, 2008

THE Bangko Sentral ng Pilipinas (BSP) approved on Thursday a measure that gives banks the flexibility to reclassify their financial assets based on fair-value accounting or based on amortized cost.

The approval takes effect immediately or by today, Friday, according to Deputy BSP Governor Diwa Guinigundo.

The approval, representing an easing of the rules on marking to market, recognizes the severe liquidity impact of the ongoing financial crisis on financial entities that are considered strong but whose asset bases will be eroded or weakened unless the marking-to-market rule is eased, Guinigundo said.

Imagine a financial institution with a strong balance sheet which really does not have to sell financial assets in its books, but has to because of the marking-to-market rule, he added.

The marking-to-market rule mandates financial institutions like banks to reflect the actual market price of their assets if these were sold today, so that investors immediately know whether these reflect gains or losses at any given time.

The rule supposedly encourages greater transparency in the handling of assets among financial institutions.

The problem is, with the global turmoil in financial markets around the world, the value of such assets are certain to drop, which is really good for everyone—except if you are a financial house that does not need to revalue your holdings because those are assets held to maturity anyway.

But with the BSP approval, banks and financial institutions now have a choice to measure assets either at fair value or at amortized cost.

“This reclassification is consistent with the October 2008 amendments to the International Accounting Standards 39 and the International Financial Reporting Standards 7 issued by the International Accounting Standards Board in light of the extraordinary circumstances in the world’s financial markets,” the policymaking Monetary Board said in a statement.

Guinigundo said financial institutions may now reclassify their investments in debt and equity securities from the held-for-trading or available-for-sale categories to the held-to-maturity or the unquoted debt securities classified as loans until December 31 this year.

Reclassifications done before November 1 this year may be based on July 1, 2008, fair values. Reclassifications on or after November 1 shall be based on fair values as of the date of reclassification, according to Guinigundo.

There is nothing special in the date of reckoning, except that July 1 is the start of the second half of the fiscal year, Guinigundo said.

Igsuonnimo

October 25th, 2008, 08:28 AM

October 24, 2008 | Friday | MANILA, PHILIPPINES
Vol. XXII, No. 65

Metrobank Group wants Philamlife

THE METROBANK Group of tycoon George S.K. Ty yesterday said it has joined the queue of bidders for the Philippine American Life and General Insurance Company (Philamlife), saying the local unit of beleaguered American International Group, Inc. (AIG) will be strategic to its expansion plans.

AIG is divesting some of its assets in Asia to repay an $85-billion lifeline extended by the US government.

"Strategically, Philamlife’s businesses fit the operations of the respective companies in our Group, " Metrobank Group vice chairman Antonio S. Abacan, Jr. yesterday said in a statement.

"They are very strong and well-managed corporations, and a successful acquisition of these companies would accelerate the growth of the Metrobank Group in these areas."

The Ty-led group is not new to the insurance business, as it has a stake in Philippine AXA Life, a partnership between Metrobank and financial services giant Global AXA Group.

-TC-

October 27th, 2008, 03:51 AM

http://business.inquirer.net/money/breakingnews/view/20081026-168573/Treasury-urged-to-issue-bond-warrants

Treasury urged to issue bond warrants

By Doris Dumlao
Philippine Daily Inquirer
10/26/2008

THE BUREAU OF THE TREASURY was urged to issue more bond warrants to protect holders of its foreign currency bonds, mostly Philippine banks, from the lingering global financial turbulence.

Fiscal authorities are open to the idea, although National Treasurer Roberto Tan said there was “no firm plan” to issue a new tranche of Philippine cash bonds or warrants.

In a presentation to the Financial Executives Institute of the Philippines last week, former finance secretary Romeo Bernardo, now an advisor at New York-based think tank Global Source, said fiscal authorities could help address the spillover effects of the global turmoil by issuing more of these warrants that allow the conversion of dollar-denominated government securities to pesos.

He said these warrants would “relieve pressure on banks to unload them (government securities) to meet capital requirements.”

This “paired warrant” is different from credit default swap (CDS), which also offers insurance-like protection to bondholders as the CDS settles in cash while the “paired warrant” gives peso-denominated treasury bonds in exchange, in case of a debt default by the national government.

Under the Bangko Sentral ng Pilipinas’ rules, the dollar-denominated government securities paired with the warrants carry zero risk weight just like peso-denominated treasury bonds. As such, banks can avoid capital charges even without unloading their holdings of their overseas bonds if they have the warrants.

The Treasury earlier floated two tranches of these bond warrants with the help of Credit Suisse and said it would no longer issue additional instruments for the rest of this year. But with the worsening global credit crunch and rising cost of CDS in the global markets, the government was urged to consider an additional issuance.

The government estimates that about 40 percent of the government’s $20-billion outstanding bonds can be a potential market for the warrants.

The instruments are expected to encourage Philippine banks to continue holding the bonds to help lower the yield curve. A low yield curve helps lower the cost of capital for the entire economy, especially long-term borrowers such as infrastructure project proponents.

-TC-

October 28th, 2008, 04:57 PM

http://business.inquirer.net/money/topstories/view/20081028-168924/ICBC-to-invest-in-GSIS-Family-Bank

ICBC to invest in GSIS Family Bank
By Joel Guinto
INQUIRER.net
10/28/2008

MANILA, Philippines – (UPDATE) The Industrial Commercial Bank of China (ICBC), mainland China's largest of the "Big Four" state-owned commercial banks, is keen on investing in the Philippines.

Talks are underway between the ICBC and the GSIS Family Bank, a wholly-owned subsidiary of the state pension fund, the Government Service Insurance System (GSIS), Finance Secretary Margarito Teves told a news conference in Malacañang.

"Hopefully, there will be an early completion of this discussion between the ICBC and the local counterpart here, the GSIS Family Bank (GFB)," Teves said.

A GSIS statement said the formal offer to invest in GFB was made after recent discussions between GFB and ICBC officials in Manila and in Beijing.

In a letter to GFB president and GSIS board trustee Reynaldo Palmiery, ICBC deputy general manager Wang Wenbin indicated the bank's interest to invest in GFB as a third party strategic investor.

ICBC is applying for a commercial license to operate and engage in expanded foreign currency deposit units, trust and quasi-banking functions.

ICBC plans to open an additional 20 GFB branches and relocate 12 GFB branches as it seeks authority to accept government deposits from the GSIS and local government units.

"We also require confirmation from the GSIS that GFB will continue to be the conduit for its investments and that the GSIS is prepared to divest to a minority position in GFB," Wang said in his letter to GSIS.

Trade Secretary Peter Favila said ICBC's interest was "clearly a vote of (China's) confidence."

Teves said ICBC's interest "will serve as a magnet for other investors to come in. In a situation where there is a global financial crisis, the question that we normally ask is, why is a very big bank investing in the Philippines?"

"The investment of ICBC will not only provide the GFB with a very strong financial base, but also signify ICBC's confidence in the Philippine banking and financial system, as well as the whole economy," said GSIS president and general manager Winston F. Garcia.

ICBC is the largest bank in China and in the world in terms of market value. It is one of the world's top 10 banks in terms of assets.

As of 2006, it had assets of US$893 billion, with over 18,000 outlets including 106 overseas branches and agents.

Meanwhile, the GSIS said it planned to unload its 42-percent stake in GFB. GSIS owns 99.55 percent of GFB, consisting of two billion common shares and 500 million preferred shares.

GSIS Family Bank comprises several banks, including Royal Savings Bank and Com-Savings Bank. It has 22 branches, concentrated mostly in the Cavite-Laguna-Rizal area, otherwise known as the CALABARZON.

Igsuonnimo

October 30th, 2008, 06:48 PM

From www.philstar.com

Deutsche Bank rounding up potential buyers of Philamlife
By Ted P. Torres
Friday, October 31, 2008

Deutsche Bank has been rounding up the prospective buyers of Philippine American Life and General Insurance Co. (Philamlife) and its subsidiaries, the local insurer’s top executive said.

Philamlife president and chief executive officer Jose L. Cuisia Jr. confirmed that the German investment bank has been going around and talking with the interested parties in the Philippines.

He said they hope that before the end of the year, “there will be something more definite.”

Deutsche Bank was tapped by global investment bankers JP Morgan and the Blackstone Group which, in turn, were hired by US-based global insurance giant American International Group (AIG) and the Federal Reserve Bank of New York to oversee AIG’s assets for sale, including Philamlife and its subsidiaries, with the exclusion of its non-life insurance operations.

Deutsche Bank will screen or pre-qualify all the interested parties to ensure their seriousness and ability in acquiring Philamlife.

The Philippine offices of international insurers Sun Life Financial Manulife Financial, and Generali Pilipinas neither confirmed nor denied having discussed with the investment bank their reported acquisition bid for Philamlife.

“Chances are it is our principals that are talking with JP Morgan or Blackstone,” one of them said.

Sources within the Yuchengco Group said that they had not been approached yet while representatives of the Ayala Group could not be reached as of presstime.

The SM Group, San Miguel and GSIS have also expressed interest in buying Philamlife.

AIG has up to 2010 to pay its $85-billion debt to the New York Federal Reserve, and it has to dispose of several of its international assets to raise the fund.

Co-ops tap PAMI

Philam Asset Management Inc. (PAMI) has been tapped as fund manager of the National Cooperative Mutual Fund of the Philippines Inc. (NCMFP), the country’s first mutual fund owned by the country’s cooperatives.

There are 70,000 registered cooperatives nationwide although less than 20,000 are still operating.

The cooperative mutual fund is similar to the GSIS Mutual Fund, which is also being managed by PAMI. Both are balanced funds, where investments made are spread out between the equity and the bond markets.

Initially, 98 cooperatives have committed to join the fund. It has a seed infusion of P100 million and an authorized capital of P400 million.

Each cooperative is expected to commit a minimum of P100,000 each or roughly P9.8 million.

“But the potential is tremendous, both as savings for the cooperatives, for individuals and the mutual fund industry,” Karen Roa, PAMI president, said.

The minimum initial investment to the new mutual fund will likely be between P2,000 to P5,000 for individuals, cooperative member or not. It is the same rate for those making investments with the GSIS Mutual Fund.

PAMI is presently managing funds worth over P17 billion.

Igsuonnimo

October 30th, 2008, 06:52 PM

www.philstar.com

Ayala Group puts up RP’s first mobile bank
By Mary Ann Ll. Reyes
Friday, October 31, 2008

The Ayala Group is putting up the country’s first mobile microfinance bank, initially capitalized at P500 million, through a three-way fund infusion by the conglomerate’s main units.

Ayala Corp., Bank of the Philippine Islands (BPI) and Globe Telecom signed yesterday a memorandum of agreement to create the said bank, Pilipinas Savings Bank, as a wholly-owned subsidiary of BPI.

The use of Pilipinas Savings Bank as vehicle, however, is still subject to the execution of definitive agreements and to getting the necessary approvals from the Bangko Sentral ng Pilipinas and other government regulators, Ayala Corp. general counsel Renato Marzan said.

BPI and Globe will have an equal stake of 40 percent while Ayala Corp. will own 20 percent of the bank, which has a subscribed capitalization of P350 million.

Marzan said the venture will extend wholesale microfinance loans to microfinance institutions and other microfinance products in the future, and will use mobile technology to deliver financial services and expand its retail client base.

He added that the move seeks to further enhance the Ayala Group’s participation in building a financial ecosystem within the microfinance community.

Marzan explained that BPI has an ongoing wholesale lending program for microfinance institutions while Globe has been providing a number of rural banks and microfinance institutions with its innovative G-Cash product, a text messaging based technology, for money transfers and loan collections.

Microfinance has been defined as the provision of financial services to poor or low-income clients, including consumers and the self-employed. The term also refers to the practice of sustainably delivering those services.

More broadly, it refers to a movement that envisions a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance and fund transfers.

The microfinance industry as a whole is forecast to grow 10-fold to more than $250 billion over the next decade, according to recent research by Citigroup.

The creation of the mobile microfinance bank is expected to take mobile commerce (m-commerce) a step further.

About 40 rural banks offer mobile banking services in partnership with Globe while rival Smart Communications has partnered with Microventures, a social business enterprise, and the Center for Agriculture and Rural Development, the largest microfinancing institution in the Philippines, to put up some 8,000 stores in Southern Luzon that will offer mobile banking and Internet services.

chocolato1000

October 31st, 2008, 10:45 AM

^^ good news for SMEs.

Igsuonnimo

October 31st, 2008, 07:02 PM

www.philstar.com

BDO gets SEC nod for merger with units
By Ted P. Torres
November 1, 2008 Saturday

The Securities and Exchange Commission (SEC) has given the green light for a four-way merger among Banco de Oro Unibank Inc. (BDO), Equitable Savings Bank, BDO Elite Savings Bank and PCI Capital Corp.

Based on the business plan, BDO will emerge as the surviving entity.

BDO Capital Corp. will assume all the investment banking functions of PCI Capital.

According to the report submitted to the SEC, Equitable and BDO Elite will be absorbed by BDO, resulting in the expansion of its branch network to 703, the most by any commercial bank in the country.

Metrobank used to be the largest in terms of branches. It is still the largest in terms of consolidated assets, net loans, deposits, and capital.

BDO said that the four-way merger “is in line with the BDO Group’s policy of streamlining operations and rationalization of the group’s organizational structure.”

“Cost savings are expected to be realized by consolidation of administrative functions, elimination of redundancies, and unified branding and advertising. The four-way merger will also optimize the capital structure of the group,” BDO chief information officer Elmer B. Serrrano said.

Earlier, BDO president and chief executive officer Nestor V. Tan said the productivity of the two thrift bank outlets will allow BDO to offer a wider array of bank products and services as branches of a universal bank.

He said the additional cost for the integration of the three former subsidiaries would come from its integration budget.

“We do not need additional capital expenditures, it is already budgeted,” the BDO chief executive added.

The integration started with the acquisition of Equitable PCI Bank in 2006 and the banking operations of American Express Bank.

BDO reported a P1.06-billion net income as of end September due to provisioning for potential losses on investments with bankrupt Lehman Brothers. Total provisioning so far has reached P4.28 billion.

Total resources however remained a healthy P743.49 billion while its capital adequacy ratio (CAR) stood at 13.7 percent. — With abs-cbnnews.com

Igsuonnimo

November 12th, 2008, 03:02 PM

German bank sees no recession in RP

By Doris Dumlao
Philippine Daily Inquirer (http://business.inquirer.net/money/breakingnews/view/20081112-171821/German-bank-sees-no-recession-in-RP)
First Posted 19:13:00 11/12/2008

MANILA, Philippines—The Philippines is not in danger of falling into a recession. In fact, it is the only country in Southeast Asia that has so far escaped the harsh impact of the global financial turmoil, European banking giant Deutsche Bank said Wednesday.

In an equity research note, the German bank said the Association of Southeast Asian Nations as a bloc was far more resilient today than during the Asian crisis of the late 1990s, when the sharp economic slowdown and unprecedented currency devaluation triggered a wave of corporate defaults that in turn soured banks' assets.

“While the collapse in commodity prices and the anticipation of weaker exports should hurt economic growth, DB is not expecting a recession in Indonesia, Malaysia, Thailand or the Philippines,” the report said.

But the bank warned that currencies in the region would continue to face pressure as offshore investors shy away from smaller emerging markets.

“Thailand is dealing with an almost self-imposed credit crunch and Malaysia is trying to fund a higher-than-expected fiscal deficit; only the Philippines seems relatively unscathed so far,” DB said.

It added that Singapore was so far the outlier in the region, as a recession or at least two quarters of negative growth, may be inevitable in 2009 given the city-state's sensitivity to global economic growth.

But with the exception of Singapore, DB said Asean banks have had negligible exposure to US subprime mortgages or structured products.

“Financial prudence, deposit guarantees by central banks and the general lack of exuberance in the mass residential property market has left the Asean bloc in far better shape today than before the Asian crisis,” DB said.

But despite the strong fundamentals, DB said the magnitude of stock market declines across the region was no different from those in North Asian markets, where economies were now grappling with significantly more risks.

DB added that Asean corporate balance sheets remained relatively healthy. “And there appears to be a surprising sense of calm in the real economy,” it said. But it added that earnings and currency risks remained high, especially in Thailand and Indonesia.

The Philippine government, for its part, has scaled down its growth outlook for this year and next year but projected a positive growth.

The inter-agency Development Budget Coordination Committee now expects the domestic economy to grow at a slower pace of 4.1-4.8 percent this year and 3.7-4.7 percent next year. It was earlier projected that domestic growth would be within 5.5-6.4 percent this year and 6.1-7.1 percent next year.

With the change in the growth target, the government revised the programmed budget deficit for 2009 to P102 billion from P75 billion this year, to provide room for fiscal spending to boost the domestic economy.

The government has also adjusted its peso-dollar exchange rate assumption for next year to 45-48 from 42-45 this year.

Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said the changes in growth targets were broadly consistent with the projection of the International Monetary Fund of a slower growth of 2.2 percent for the global economy next year, likewise downgraded from an earlier forecast of 3 percent.

When growth in global output falls to 3 percent or below, the IMF considers it a global recession.

For the Southeast Asian region, the IMF is now projecting a growth rate of 4.2 percent for 2009.

http://business.inquirer.net/money/breakingnews/view/20081112-171821/German-bank-sees-no-recession-in-RP

Igsuonnimo

November 13th, 2008, 01:53 PM

SM Group, Generali, Kuok Group join forces to bid for Philamlife
By Zinnia B. Dela Peña
November 13, 2008 Thursday

The SM Group is teaming up with Generali Pilipinas, the local insurer of Italy’s Assicurazioni Generali, the world’s fourth biggest insurance group, and the Kuok Group of Malaysian to bid for the Philippine assets that the financially-troubled American International Group (AIG) is selling.

Generali Pilipinas is a joint venture between the SM Group and the Generali Group and the Kuok Group.

Jose T. Sio, executive vice-president of SM Investments Corp., said acquiring AIG’s assets would further fortify Generali Pilipinas’ strong position in the insurance industry. The SM group owns 40 percent of Generali Pilipinas.

Generali is the third biggest insurance group in Europe and the 30th largest company in the Fortune Global 500 worldwide ranking with a 2007 total premium income of over 66 billion.

In the Philippines, Generali’s products and services include life insurance, auto and home insurance, small and medium business protection, employee benefit plans as well as commercial property insurance. It has offices in Metro Manila, Bacolod, Baguio, Cebu, Davao and other major cities.

Meanwhile, aside from life insurance in the country, AIG has interest in banking (Philam Savings Bank), mutual funds (Philam Asset Management Inc.), pre-need (Philam Plans) and non-life insurance (Philam Insurance Co. Inc.).

Philam Insurance will not be sold as it will remain under AIG’s umbrella. It provides property and casualty insurance services for individual consumers and businesses including automobile insurance, homeowner’s packages, travel, accident and health insurance, property, third party liability, professional and management liability, marine and more.

The life insurance business in Philamlife is AIG’s crown jewel in the Philippines with a net worth of P21.4 billion as of end-2007. It has been the dominant market player in the Philippines over the last 60 years.

The sale of Philamlife is expected to take place before the end of the year at the earliest with industry observers placing a tag price of between $800 million to $1.5 billion.

Philamlife had a consolidated net worth of P49.5 billion and assets of more than P170 billion as of end-2007.

Aside from the SM Group, other entities that have signified interest to acquire Philamlife include the Ayala Group, Metrobank Group, state pension fund Government Service Insurance System and San Miguel Corp.

www.philstar.com

Igsuonnimo

November 18th, 2008, 12:53 PM

Banks still see strong remittance business
By Ted P. Torres
Updated November 18, 2008 12:00 AM
www.philstar.com

Most Philippine banks in the remittance business are optimistic that the business will register growth this year. There are however concerns for 2009.

In fact, the Metropolitan Bank & Trust Co. (Metrobank) and the Philippine National Bank (PNB) have already geared up for an expected slowing down of overall remittances next year.

“The possible downturn of remittances in 2009 merely challenges us to push forward,” Carmelita R. Araneta, Metrobank executive vice president, said.

Araneta said that there had not been any significant signs of weakening from their businesses.

“In fact, we expect it to increase as we have been expanding our network with more agents, we see more remittances coming from the Middle East,” she added.

Metrobank is optimistic that they will remain within its original target of business amounting to nearly $4 billion this year.

It accounted for $3.5 billion of total remittances last year, or approximately 22 percent of market share.

PNB senior vice president for global marketing Patricia Tan also expressed optimism that it would generate remittance-related businesses of between $2 billion to $2.5 billion this year.

Last year, PNB accounted for $1.8 billion in remittance business.

The remittance target however does not include whatever Allied Banking Corp. (Allied Bank) in the same period. The two banks merged earlier this year, but the merger process will only be completed towards the end of 2009.

Nonetheless, Tan is confident that the business will improve despite the global credit crisis.

“Some areas recorded lower than expected remittances but it was offset by other areas which recorded better than expected business,” the PNB official said.

Metrobank and PNB like most banks involved in the remittance business believe that 2009 “will be a tougher year.”

But the anticipated downturn as far back as September this year has prompted banks to make the necessary adjustments.

”We have been preparing for the poor environment by increasing channels like new or improved correspondent bank relationships, tie-ups with remittance companies, and other receiving or distribution outlets,” Tan said.

Remittances coming from overseas Filipinos in the United States this year is expected to weaken as it is the hardest hit by the credit crisis. But overseas Filipinos located in the Middle East and European markets are forecast to increase significantly.

Bank officials added that aside from the bigger number of Filipinos locating in these areas, the jobs being commissioned are likewise higher in quality therefore better paying.

More and more Filipinos are landing jobs in the health, information technology, business process outsourcing, accounting, education, and tourism sectors.

The construction boom in the Middle East is also luring more and more Filipinos, aside form the higher risk premiums offered in conflict-stricken areas.

There are at least 10 million recorded overseas Filipinos, who send back dollar-based remittances to beneficiaries in the Philippines.

Assuming that it affects at least five individuals per overseas Filipino, it would mean roughly 50 million or more than half of the country’s nearly 90 million growing population.

Thus it is not surprising that remittances are estimated to account for 10 percent of gross domestic product (GDP).

At the start of the year, the peso was roughly 41 to the dollar. It has since weakened by more than 15 percent to the 49 level with no sign of strengthening for the rest of the year.

According to the World Bank, the country continues to deploy overseas Filipinos at astonishing speed notwithstanding the global economic slowdown.

In the first eight months of the year, deployment rose by 26.4 percent to more than 884,000 as demand persists. Moreover, the destination of overseas workers has become more diversified.

The rapid growth of overseas Filipinos and the huge amount of remittances they send back has encouraged more local banks to expand their international presence.

These expansions have also brought more overseas Filipinos into contact with various financial products, thereby increasing the share of remittances channeled to investments.

It is estimated that about 30 percent of remittances are now being invested in housing.

Against this backdrop, the central bank recorded the highest monthly inflow of remittances in June, $1.5 billion or 30 percent higher than last year.

However, in the succeeding months remittances started to register slower growth, from 24 percent in July to 10 percent in August.

This brings the August year-to-date inflows to $10.9 billion or 17.2 percent higher relative to the level a year ago.

Nonetheless, full year remittances will easily surpass the $15-billion level, another record amount passing the country’s banking system. Last year, total remittances reached $14.45 billion.

For 2007, recorded remittances flows worldwide are estimated at $337 billion, of which $251 billion went to developing countries.

These flows do not include informal channels, which would significantly enlarge the volume of remittances if they were recorded. There are roughly 190 million migrant workers that remitted money last year.

-TC-

November 18th, 2008, 04:27 PM

http://business.inquirer.net/money/topstories/view/20081116-172539/6-banks-vie-for-Philam-savings-bank

6 banks vie for Philam Savings Bank
Potential buyers include Sy, Gokongwei, Gotianun
By Doris Dumlao
Philippine Daily Inquirer
11/16/2008

SIX LOCAL BANKS, including those owned by taipans Henry Sy, John Gokongwei and Andrew Gotianiun, are in the short list of bidders for AIG's consumer banking arm Philam Savings Bank and auto financing company Primus Finance and Leasing Inc.

The potential bidders, which have until Monday to submit a definitive proposal, are Asia United Bank, Banco de Oro Unibank, China Banking Corp., Chinatrust (Philippines) Commercial Bank, East West Bank and Robinsons Savings Bank, banking sources disclosed to the Inquirer.

The sources said beleaguered US financial giant AIG, which has put its Philippine assets on the block as part of a global streamlining program, could make a decision and pick from among Philam Savings' suitors very soon.

AIG's consumer units have a combined book value of P1.6 billion--P1.3 billion for Philam Savings and P300 million for Primus Finance, the sources said. As a rule of thumb, sellers of profitable enterprises usually ask for a premium over book value.

"You're buying Philam Savings and Primus Finance as if they're a merged entity. You're really buying the credit card and auto financing business," said an officer of one of the shortlisted banks.

A 24.5-percent stake in Primus Finance, formerly the local auto financing company of American car giant Ford, was already booked as part of Philam Savings' assets. But whoever will buy Philam Savings must also pay for the remaining 75.5-percent stake held by other AIG affiliates, the sources said.

BDO and China Bank are both owned by retail tycoon Sy while East West Bank is owned by property magnate Gotinianun of the Fil-Invest group.

-TC-

November 18th, 2008, 04:33 PM

http://www.bworld.com.ph/BW111808/content.php?id=021

Bank lending rises in Sept.

G. S. dela Peña
BusinessWorld
November 18, 2008

BANKS’ loans grew by 24.8% in September from a year earlier as they raised lending to productive sectors, central bank data showed.

Outstanding loans by commercial banks, excluding placements in the central bank’s overnight lending or reverse repurchase facility, rose to P1.87 trillion in September.

In comparison, loans climbed by 22.1% to P1.83 trillion in August.

Including reverse repurchase agreements, loans expanded by 24.1% in September or at the same clip in August, totaling P2.05 trillion that month compared to P2.04 trillion a month earlier.

Amando M. Tetangco, Jr., Bangko Sentral ng Pilipinas governor, in a statement said the latest data on lending indicated there is sufficient liquidity in the economy to support economic growth, noting the tightness in global credit markets.

He added the central bank monitors banks’ lending activities in order to generate an advance indicator on the direction of future economic activity.

Data for September was obtained using the new system of financial reporting, which classifies loans into more economic sectors.

The central bank said banks lent more to productive sectors of the economy, as loans to these sectors grew by 22.4% in September compared to 19.8% in the previous month.

The sectors that increased loan availment were: transportation, storage and communication with 82.1% growth; electricity, gas and water, with 54.4%; wholesale and retail trade with 49.4%; agriculture, hunting and forestry with 37.8%; real estate, renting and business services with 15.4%; and manufacturing with 8.5%.

Lending to consumers also grew by 23.4%, higher compared to the 20.2% growth in August.

The growth in consumption loans was driven mostly by auto loans, which rose by 12.2% in September compared to 10.6% in August, as well as household loans, which grew by 29.6% from 4.6%.

Credit card receivables grew by 26.3%, but this was lower than the 27% growth in the previous month.

To ensure liquidity in the financial system, the central bank in October allowed banks to reclassify their financial assets in order to trim their mark-to-market losses.

Early this month, it delivered a two-percentage point cut on banks’ reserve requirement, or the portion of bank deposits that are required to be kept at central bank vaults.

-TC-

November 22nd, 2008, 12:59 PM

http://business.inquirer.net/money/topstories/view/20081121-173478/Tycoons-banks-bid-for-Philam-Savings

Tycoons’ banks bid for Philam Savings
By Doris Dumlao
Philippine Daily Inquirer
11/21/2008

Four banks controlled by Chinese-Filipino tycoons Henry Sy, John Gokongwei and Andrew Gotianun have submitted a binding offer to acquire American International Group’s Philippine consumer banking arm Philam Savings Bank and auto financing company Primus Finance and Leasing Inc., banking sources of the Philippine Daily Inquirer said.

Banco de Oro Unibank and China Banking Corp., both controlled by the Sy family, separately made a definitive offer as the deadline expired on Monday.

The Gokongwei group’s Robinsons Savings Bank and the Gotianiuns’ East West Bank also submitted binding proposals, the sources said.

“We’re just one of the bidders,” Banco de Oro chairperson Teresita Sy-Coson told the Inquirer. “Now all we have to do is to wait.”

She said Banco de Oro’s interest in Philam Savings was part of its consumer business expansion.

Asked why Banco de Oro and China Bank were running after the same bank, she said: “We work differently.”

Banco de Oro has grown to become the country’s second-biggest bank in assets through acquisitions since 2000.

Two banks that were earlier shortlisted to bid—Asia United Bank and Chinatrust (Philippines) Commercial Bank—have dropped out of the race, banking sources said.

AIG’s consumer units have a combined book value of P1.6 billion—P1.3 billion for Philam Savings and P300 million for Primus Finance. AIG has bundled the sale of these two units, which are expected to fetch a premium over book value.

Philam Savings has a 24.5-percent stake in Primus Finance, formerly the local auto financing company of American car giant Ford, but the buyer must also pay for the remaining stake held by other affiliates.

Philam Savings Bank is 45 percent owned by AIG Consumer Finance Group (CFG) and 45 percent by the country’s biggest and most profitable insurer, Philippine American Life and General Insurance Co., which is itself also being put on sale.

Philam Savings has nine branches and P13.66 billion in total assets, based on its statement of financial condition as of end-June. Its most attractive asset is its growing credit card platform, which has 232,000 cardholders. It also has a high return on equity of 16.94 percent and a capital adequacy ratio of 13.48 percent.

The bank’s net loans and receivables amounted to P10.42 billion while deposits stood at P11.8 billion. It is capitalized at P1.29 billion.

-TC-

November 22nd, 2008, 01:01 PM

http://business.inquirer.net/money/topstories/view/20081121-173465/BSP-keeps-overnight-rates-unchanged

BSP keeps overnight rates unchanged

Reuters
11/21/2008

MANILA, Philippines -- (UPDATE) The Bangko Sentral ng Pilipinas, the country’s central bank, kept interest rates steady on Thursday for a second month in a row, maintaining support for the flagging peso even as other central banks globally cut rates to head off the global financial crisis.

The central bank left its overnight borrowing rate at 6.0 percent and its lending rate at 8.0 percent, saying a cut in bank reserve requirements last week was sufficient to bolster liquidity.

It said the economy was resilient enough to absorb not cutting rates and that it was wary of easing policy because the current volatility in foreign exchange rates could lead to inflationary pressures.

It also said it would want to see at least a recovery in the peso before tracking aggressive rate cuts elsewhere in the world, including by the US Federal Reserve, European Central Bank and the Bank of Korea.

Asked whether a recovery in the peso would give the central bank more leeway in cutting rates, deputy governor Diwa Guinigundo told reporters: "Yes, it is one of the necessary conditions, but not sufficient."

"The more important point is that we have enough resiliency right now to afford not moving the policy rates at this time in the face of continued volatility in the foreign exchange market."

Analysts said a rate cut was inevitable in the future.

"In this region, currency weakness in some of these markets, potentially including the Philippines, have become a bit of a concern for policy makers, and that could be limiting their ability to do further easing," said Ken Akintewe, fund manager at Aberdeen Asset Management in Singapore.

He added: "We've already seen indicative growth come off and I think, to be honest, that's just a start. Eventually their hand is going to be forced into easing."

The peso has dropped more than 3.0 percent in two weeks against the dollar, and is down about 17 percent so far this year as investors have sold off emerging market assets.

Other analysts in the poll said there was scope for a rate cut to head off the global financial storm, especially as inflation is steadily decelerating. The central bank has said inflation could hit single-digits as early as this month.

Analysts cited the need to support economic growth, which is expected to slow this year to a range of 4.1 percent to 4.8 percent from a record 7.2 percent last year.

The reduction in bank reserve requirements would release about P60 billion ($1.2 billion) into the financial system, analysts have said.

Six of 11 analysts polled by Reuters earlier this week had forecast the Philippine central bank would keep overnight rates steady after Friday's 2-percentage-point cut in bank reserve requirements put an estimated P60 billion ($1.2 billion) into the financial system.

Economic growth in the country is expected to slow this year to a range of 4.1 percent to 4.8 percent from a record 7.2 percent last year.

Igsuonnimo

November 23rd, 2008, 04:23 PM

Thrift banks improve NPL ratio to 6.34%
By Des Ferriols Updated November 23, 2008 12:00 AM

The country’s thrift banks have been successful at paring down their bad loans, bringing the ratio down to 6.34 percent of their total loans as of end-July this year, the Bangko Sentral ng Pilipinas (BSP) said.

In a report, the BSP noted that the July ratio of non-performing loans (NPL) to total loans was better than the 6.59 percent recorded in June and the 6.99 percent ratio in July last year.

The BSP said the month-on-month improvement was due to the 2.62 percent contraction in NPLs to P18.87 billion, coupled with the 1.03 percent increment in total loan portfolio (TLP) to P297.78 billion.

Isolating the effect of interbank loans (IBL), the BSP said the thrift banking industry’s core lending actually grew 2.64 percent to P273.43 billion. This meant that the industry’s NPL ratio (net of IBL) further improved to 7.10 percent from the previous month’s 7.65 percent and from the year-ago’s 8.93 percent ratio.

Overall, the BSP said thrift banks were able to sustain a single-digit NPL ratio for the past 39 months, and pinned it below the pre-crisis ratio of 7.74 percent (as of end-June 1997) for the past 12 months.

On the other hand, the BSP said the industry’s restructured loans (RLs) hardly changed from the previous month’s P4.67-billion level.

But the proportion of RLs to TLP climbed to 1.57 percent from the previous month’s 1.46 percent because of the reduction in TLP.

The ratio of real and other properties acquired (ROPA) over gross assets (GA) likewise went up to 5.43 percent from the previous month’s 5.25 percent.

The BSP attributed this decline to the contraction in the industry’s gross assets while ROPA barely moved at P27.02 billion. Nonetheless, the latest ratio was better than year ago’s 7.32 percent ratio.

The BSP said the industry’s stock of non-performing assets (NPA) was pared by two percent to P46.44 billion as of end-July 2008. However, the NPA ratio rose slightly to 9.37 percent from the previous month’s 9.24 percent as the NPA cleanup failed to match the 3.39 percent decline in GAs.

But the BSP said the July NPA ratio was still better than the 10.92 percent ratio posted a year ago.

The NPL coverage ratio widened to 49.34 percent, or by 0.61 percentage point from 48.73 percent the previous month.

The BSP said this improvement stemmed from the ample decline in NPLs, despite a 3.52 percent narrowing of loan loss reserves (LLRs) to P9.58 billion.

But the BSP said the coverage ratio paled in comparison with the 50.48 percent ratio registered a year ago.

The NPA coverage ratio narrowed to 26.94 percent from 27.22 percent in May due to the three percent shrinkage in NPA reserves to P12.51 billion. Nevertheless, the latest ratio was comparatively wider than the year ago’s 26.84 percent ratio.

-TC-

November 23rd, 2008, 04:51 PM

http://business.inquirer.net/money/topstories/view/20081123-173921/Citigroup-to-expand-workforce-in-RP

Citigroup to expand workforce in RP
Outsourcing expansion seen creating 1,000 new jobs
By Doris Dumlao
Philippine Daily Inquirer
11/23/2008

WHILE AMERICAN financial giant Citigroup is streamlining across the globe, it expects to create about 1,000 new jobs and triple its workforce in the Philippines next year, picking the country as a regional hub for business process outsourcing (BPO).

"Citi is repositioning in Asia-Pacific but we remain focused on growth. As we review our operations and where we can be more efficient, something which we have been doing even before the downtrend in the global financial markets, we in the Philippines are optimistic that instead of reducing head count, we will be growing," Citibank country business manager Mark Jones said.

Jones said Citibank had a staff of about 500 in the country and would likely hire an additional 1,000 in the coming year as part of plans to build processing centers and expand its domestic banking business.

"We expect the Philippines to be a preferred location for regional hubs or center of excellence because of superior skilled workers and attractive labor costs," Jones said.

"From call centers to financial reporting and service centers, there's a whole lot of activity moving to the Philippines," he said.

Citigroup announced in New York last week plans to cut more than 50,000 jobs or about 14 percent of its workforce to weather the lingering global financial market turbulence.

Jones said the bank obviously could not keep all of its existing staff in the Philippines, where the bank was investing heavily in systems and processes to make operations more efficient.

"Inevitably, if you go through change as we upgrade our systems, as systems get automated, that happens," he said when asked about potential lay-offs.

But overall, he said the bank would hire more people in the Philippines as Citigroup's global restructuring would require the expansion of regional BPO hubs.

"We are repositioning globally, doing what we have to do now that the markets are not functioning normally," Jones said.

Asked about the bank's outlook for next year, he said: "It's going to be a tough year globally. In the Philippines, it doesn't feel it's safe yet but we're certainly preparing for it."

"We haven't really seen it impact the consumer but we're preparing for it," he added.

Wall Street was filled with speculation on Friday that the New York-based Citigroup may now consider selling part or all of its shares to hurdle the global financial turmoil.

Igsuonnimo

November 24th, 2008, 12:35 PM

Big 3 local banks move to hike capital by P25B

11/24/2008

The country’s top three lenders — Bank of the Philippine Islands (BPI), Banco de Oro Unibank Inc. (BDO) and Metropolitan Bank & Trust Co. (MBTC) — has started raising a total of P25.5 billion in fresh capital.

“In view of the impending global economic slump, it has become absolutely imperative for our commercial banks to have extra capital to be able to step up their lending activities,” Cebu Rep. Eduardo Gullas, meanwhile, said.

Amid fears of an economic downturn, Gullas stressed the need for commercial banks to be able to extend adequate credit, particularly for small and medium businesses.

In fact, Gullas said government financial institutions (GFIs) should now also purposely boost their lending operations in order to pick up any possible slack from private commercial banks.

Gullas addressed his plea to all GFIs, including the Land Bank of the Philippines, Development Bank of the Philippines, People’s Credit and Finance Corp., Philippine Postal Savings Bank Inc. and the Small Business Corp.

In recent separate disclosures to the Philippine Stock Exchange, BPI, BDO and MBTC said they have either raised or are set to raise a combined P25.5 billion in additional capital.

BPI is set to raise up to P15 billion. MBTC and BDO have raised P5.5 billion and P5 billion, respectively.

Based on the closing prices of their stocks at the PSE on Friday, BPI, BDO and MBTC are the country’s three largest banks in terms of market capitalization. BPI has a market capitalization of P120 billion; BDO, P53 billion; and MBTC, P40 billion.

Gullas previously warned that the country could face a deeper economic downturn next year, unless government spends more aggressively right away.

He said government — the country’s single largest consumer — is in a position to avert a severe economic slump.

“There is no question government has to spend in a big way to keep the economy from stalling in the face of the looming global recession,” he said.

Government has to pick up any slack in private sector as well as household spending, as corporations and families brace themselves for the hard times ahead, according to Gullas.

“If our major trading partners such as the US, Japan and Europe are already in a recession, then we too risk undergoing a pronounced economic decline,” he said.

“This is why Congress has to pass the proposed P1.415-trillion General Appropriations Act for 2009, which is P188 billion more than this year’s budget. A re-enactment of this year’s P1.227-trillion budget is absolutely out of the question,” Gullas said.

Gullas, meanwhile, backed proposed new legislation that would at least double to P500,000 the maximum bank insurance coverage per depositor.

The state-run Philippine Deposit Insurance Corp. earlier said that under existing laws, with the maximum deposit insurance at P250,000, “around 95.12 percent of all the 31.98 million deposit accounts in the country are already fully insured.”

mygz14

November 24th, 2008, 02:18 PM

ATR KingEng bullish about the Philippines

MANILA, Philippines - Amid the global and regional economic slowdown, listed investment house ATR KimEng Financial Corp. remains bullish about the Philippines.

Its consumption-led economy has made the Philippines become a bright spot in the entire region, Manuel Tordesillas, ATR KimEng president, told reporters on Monday.

“If you go to Thailand, you’ll see the depression there and Singapore is also in recession," Leveriza said

Besides citing the liquidity of Philippine banks, he also pointed out the current account surplus of the Bangko Sentral ng Pilipinas and steady inflows from overseas Filipino workers.

Leveriza said ATR KimEng is projecting a growth of some 4.5 percent for the country’s economy last year.

“The Philippines is becoming a star in this crisis. Other bankers have also told us that," he said.

Leveriza noted that the reforms undertaken by the Philippines following the 1997 Asian financial crisis has provided it some cushion to better weather the global credit crunch. - GMANews.TV (http://http://www.gmanews.tv/story/135369/ATR-KingEng-bullish-about-the-Philippines)

Igsuonnimo

November 27th, 2008, 02:52 PM

RCBC eyes smaller banks
Banking & Finance
Monday, 24 November 2008 20:27

RIZAL Commercial Banking Corp. (RCBC), the Philippines’ fifth largest in asset terms, said on Monday it remains in an expansion mode and intends to buy smaller banks to grow its branch network.

“RCBC is acquiring small- or medium-sized banks as part of its strategy to increase branch network. There are several banks being considered and studied,” the lender controlled by the Yuchengco Group told the Philippine Stock Exchange.

The bank, however, declined to identify its acquisition targets, despite persistent rumors it was in talks to buy Asiatrust Development Bank.

RCBC’s latest acquisition was Merchants Savings and Loan Association Inc., also known as Merchants Bank, for P520 million. It was approved in May by the Bangko Sentral ng Pilipinas. Terms of the BSP approval mandated RCBC to upgrade 20 of the 21 thrift- bank branches of Merchants Bank into universal-bank status.

Quezon City-based Asiatrust has 28 branches.

Asiatrust has been mum about the purported plan of its major shareholders to sell a controlling 51-percent stake in the bank. But the Social Security System has expressed willingness to sell its 19.2-percent stake in Asiatrust “at the right premium” and has, in fact, received offers from unidentified potential buyers, according to Social Security System president Romulo Neri.

In an interview on Friday, Neri said “the plan is to sell together” with the Garcia family shareholdings in Asiatrust. The Garcias own 34 percent of the bank.

http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=2397:rcbc-eyes-smaller-banks&catid=25:bankingandfinance&Itemid=61

Igsuonnimo

December 1st, 2008, 08:48 PM

Top banks’ net income slides in year to September

12/01/2008

Most of the country’s top commercial banks posted profit declines in the first nine months, data obtained from the Land Bank of the Philippines showed.

The Ayala-owned Bank of the Philippine Islands or BPI remained the most profitable of the group but it also posted a sharp profit fall of only P5.32 billion during the period or 30 percent lower than the P7.64 billion profit a year ago.

Even the Metropolitan Bank and Trust Co., the country’s largest lender in asset terms, succumbed to the crisis and reported profits 32.4 percent lower than previous to only P3.64 billion. For the same period in 2007, Metrobank posted profits totaling P5.39 billion.

This made Land Bank the second most profitable bank in the country during the period and the only lending institution in the top 10 that posted continued profit growth of 8.1 percent to P3.81 billion from P3.53 billion.

“Land Bank is the only bank among the largest commercial banks that recorded a positive year-on-year net income growth. Land Bank generated the second highest income after BPI,” Land Bank president Gilda Pico said.

Unlike the Rizal Commercial Banking Corp., Banco de Oro Universal Bank, Metrobank and even the Development Bank of the Philippines, Land Bank did not invest in exotic structured products like mortgage-backed securities or credit linked notes peddled by investment banking giants as the defunct Lehman Brothers.

The Development Bank of the Philippines reported the fourth largest profit during the period, totaling P2.50 billion or 15 percent lower than previous. The previous year, DBP posted profits totaling P2.95 billion.

China Banking Corp. was fifth most profitable, with net income totaling P2.28 billion or 9.4 percent lower than year ago of P2.52 billion.

RCBC reported a very sharp 20.7 percent drop in profits to only P2 billion from year ago of P2.52 billion.

Union Bank, which reported profits of P2.57 billion last year, reported only P1.69 billion this year or a drop of 34.3 percent.

Ruben Hortelano

Igsuonnimo

December 2nd, 2008, 06:30 AM

Massive 61% drop in bank earnings

By ALBERT CASTRO

Profits of the country’s biggest corporations will drop by an average of one percent for the third quarter pulled down by massive contraction of 61 percent for banks, 28 percent for mining and three percent for properties.

The only companies expected to post robust earnings include food, media and utilities.

Telco profits will inch up by one percent.

Banks even before the US economy spun out of control, have been posting lower profits due to lower foreign exchange gains when the peso weakened. Interest earnings were also down.

Lower profits will be on top of the major shavings in share values.

A study prepared by Jonathan L. Ravelas, analyst of BDO Universal Bank, showed that in every US recession from 1969, local share prices contracted on average by 10 percent, ranging from a low of 2 percent in 1969 to 36 percent in 1980.

The rout in share prices this year is the worst in history at over 47 percent, higher than the 1980 clobbering of 36 percent.

Ravelas said that while it is given that the Philippines cannot escape the impact of the US recession, recovery will be swift because the country has better economic fundamentals.

But fundamentals or not, risks are all on government side. The government has limited resources to stimulate the economy.

Remittances and impending US dollar weakness will slow consumer spending.

Ravelas warned that exports will drop and the business process outsourcing sector’s growth slow down.

On a brighter note, Ravelas said the recovery period is "expected to be shorter."

Ravelas noted that among the "deep cushion" of the economy as the critical mass of overseas Filipino workers.

The agriculture sector can also be a source of growth for the economy, said Ravelas.

He also noted that the country’s workforce and wages are competitive, and that oil and food prices have stabilized.

In the Philippines, among the sector to be affected are exports, particularly electronics and commodities; the property sector as spending will focus on basics; mining, being capital intensive, will be affected by sluggish investor sentiment and softer prices; and tourism/travelling and allied industries, being a discretionary expenditures.

BDO estimates the Philippines’ GDP for 2008 to grow between 4.5 percent to 5 percent. The government targets a growth of between 4.1 percent to 4.8 percent.

The national government deficit is seen at P67 billion, compared to a government target of P60 billion.

For equities investors, Ravelas said that it would be prudent for individuals to "accumulate stocks" when the index hits 1,521.

lightsaber46

December 5th, 2008, 06:21 AM

Crisis dampens interest in home loans
By Doris Dumlao
Philippine Daily Inquirer
First Posted 03:19:00 12/05/2008
http://business.inquirer.net/money/breakingnews/view/20081205-176187/Crisis-dampens-interest-in-home-loans

The global financial meltdown has turned overseas Filipinos jittery in buying homes for their households, dampening prospects on local banks’ consumer lending.

The country’s two biggest thrift banks recorded contractions in overseas Filipinos’ housing loan applications in October—15 percent at BPI Family Savings Bank and 20 percent at Philippine Savings Bank (PSBank).

It was the first time in about five years that the banks had seen a decline in new loan application from overseas Filipinos. That sector used to provide lucrative business for banks, particularly remittances and consumer lending.

“The drop has been quite visible,” PSBank’s Pascual Garcia III said in an interview with the Philippine Daily Inquirer on Thursday.

“We won’t feel it immediately because there were (new loan) bookings done three or six months back,” BPI Family Bank vice president for retail mortgage division Jocelyn Sta. Ana said in a separate interview. “They have already made their down payment. But in terms of new loan applications, there is a drop.”

Consumer lending by banks in the Philippines grew by 20 percent last year, fueled by overseas Filipinos keen on buying homes. It was earlier reported that overseas Filipinos accounted for as much as 60 percent of new loan transactions with the country’s biggest thrift banks last year.

Given the gloomy global environment, Garcia said the whole banking sector would be lucky to attain a 10-percent growth in overall consumer lending next year.

“This may continue as they adjust to what’s happening worldwide,” Garcia said. “Some have lost their jobs, and even those who haven’t, they are nervous and would thus rather postpone making major decisions.”

Garcia said, “Until the job situation stabilizes, you will probably see them refraining from [making] these kinds of purchases and investments.”

Sta. Ana said it was unsure whether the slump in October was the beginning of a downtrend. “Housing is still a basic need of any Filipino family, so there will still be a need for people to get durable goods,” she said

Filipinos based in the US were the ones seen to be hardest hit by the global financial meltdown.

“We heard that some have cancelled purchases with (property) developers,” Garcia said.

Remittances from overseas Filipinos, however, have remained robust this year despite the global crisis. In the first nine months, remittances reached $12.3 billion, or 17.1 percent higher than the level in the same period a year ago, based on the latest report of the central bank. With editing by INQUIRER.net

lightsaber46

December 10th, 2008, 02:20 AM

2 Cebu rural banks declare holiday
http://business.inquirer.net/money/topstories/view/20081210-177104/2-Cebu-rural-banks-declare-holiday
By Jhunnex Napallacan, Kit Bagaipo
Philippine Daily Inquirer
First Posted 02:41:00 12/10/2008

CEBU CITY, Philippines — Philippine Countryside Rural Bank Inc. (PCRBI) and Pilipino Rural Bank Inc. (PRBI) have declared a bank holiday, taking their depositors by surprise.

The two banks were part of the Legacy group, a conglomerate of rural banks and pre-need companies.

In Tagbilaran City, the depositors of the PRBI learned about the bank holiday only through a notice posted at the bank entrance on Monday, which said the management was waiting for an emergency loan from the central bank to service all transactions of its clients.

In an interview Tuesday, a client with a P2-million deposit in PRBI said she felt worried when her calls to PRBI manager Delia Duliquez, who she said was a friend, remained unanswered.

The bank attracted many depositors through one of its products that offered to double deposits in five years.

PCRBI closed on Tuesday its branches in Lapu-Lapu City, Mandaue City, Banilad, and Liloan town.

Nobody answered the telephone in any of the branches although the PCRBI management reportedly sent a statement to local journalists through a text message.

"The management is working with the regulators to bring operation back to normal," PCRB president Gary Cando said in the statement sent through text message.

The Philippine Daily Inquirer reported earlier that the central bank, Bangko Sentral ng Pilipinas (BSP), in an audit done on July 31, 2007, had found PCRBI and PRBI, along with seven other banks of the Legacy group, to be undercapitalized.

The other banks included Rural Bank of Parañaque Inc., Rural Bank of San Jose (Batangas) Inc., Rural Bank of Carmen (Cebu) Inc., Rural Bank of Calatagan (Batangas) Inc. (now Dynamic Rural Bank), Rural Bank of DARBCI Inc., Rural Bank of Kananga (Leyte) Inc. (now First Interstate Rural Bank) and Rural Bank of Bisayas Minglanilla (now Bank of East Asia).

According to BSP audit findings, the rural banks of the Legacy group have a capital deficiency totaling P2.5 billion, ranging from P1.4 million for Dynamic Bank to P983.5 million for Rural Bank of Parañaque.

The BSP recommended that the Legacy group banks be placed under receivership but the banks sought the issuance of a temporary restraining order to stop BSP from implementing its planned takeover.

The Manila Regional Trial Court Judge Nina Antonio-Valenzuela, in her June 4 order, issued a temporary restraining order, which prevented the BSP from acting on the findings of its examiners or even submitting reports to the Monetary Board, which in effect prevented the regulator from closing the insolvent banks.

However, the Supreme Court issued early this month a restraint order on the enforcement of the trial court rulings that would enable the BSP to act on its adverse findings of the banking institutions.

In a phone interview Tuesday afternoon, the BSP said it would send bank examiners to Cebu to check on the situation of the PCRBI branches.

Marie Kristine Pajarillo, an officer at the BSP's Financial Consumer Affairs Group, however, said the group was still verifying if there was official notification from the bank to the BSP on the decision to declare a bank holiday.

Meanwhile, Antonio Wycoco, vice president and marketing division head of the Legacy group's pre-need insurance company, said in an interview Tuesday morning that his company was undergoing rehabilitation.

Wycoco said Legacy's pre-need company had been offering another savings scheme that would double the money of investors in three years, with the interest payable in checks. He said their investment product was entirely different from that of the Legacy group's banking division.

Wycoco said the Legacy management requested a two-month moratorium on all interest and principal investment payments starting last November.

However, since both companies were in financial trouble, the group's assets may be utilized in paying out investments and liabilities.

If rehabilitation efforts would fall through, Wycoco disclosed that the management of Legacy might apply for dissolution with the Securities and Exchange Commission.

"The company already discussed the possibility that if the company could not rehabilitate, then the most likely step would be to return the investors' capital by applying for dissolution," he said.

Under the process of dissolving the company, its assets will be liquidated to pay out investors.

Wycoco warned, however, that this process would take time.

-TC-

December 10th, 2008, 03:13 AM

http://business.inquirer.net/money/features/view/20081210-177112/Temporarily-number-one

Temporarily number one

By the Staff
Philippine Daily Inquirer
12/10/2008

Banco de Oro Unibank didn’t want to boast to the world that it had edged out Metropolitan Bank and Trust Co. for the title of “the country’s biggest bank” in the third quarter. BDO chairperson Tessie Sy told us (humbly and coyly) that it might turn out to be a “fluke” and that Metrobank—which has held the title for many years—could be back on top at the end of this fourth quarter.

“So we wanted to keep it quiet,” she said. “We did not expect it.”

And neither did Metrobank, we reckon.

Tessie Sy’s father, Henry Sy Sr., who built the SM retailing empire, is the country’s richest man, according to this year’s closely watched Forbes Magazine ranking. Tessie Sy is modest even about that, noting that that ranking was probably based mainly on the value of publicly listed assets.
But do expect BDO to make noise if it ends up in the top spot at yearend.

Doris C. Dumlao

Grandew09

December 11th, 2008, 05:24 PM

manila_eye

December 11th, 2008, 05:42 PM

depositor ako ng bdo at alam ko kung gaano kalaki ang lugi nila sa lehman brothers. basta vigilant lang ako.

amigo32

December 14th, 2008, 05:14 AM

depositor ako ng bdo at alam ko kung gaano kalaki ang lugi nila sa lehman brothers. basta vigilant lang ako.

ganun?
lipat ko na lang kaya sa Metrobank:D

-TC-

December 14th, 2008, 08:17 AM

Update...

http://business.inquirer.net/money/topstories/view/20081213-177768/3-more-rural-banks-padlocked

3 more rural banks padlocked
By Doris Dumlao
Philippine Daily Inquirer
12/13/2008

The central bank on Friday padlocked three more rural banks affiliated with the Legacy Group, using the leeway recently obtained from the Supreme Court in taking prompt action against insolvent banks.

Placed under receivership were Bank of East Asia based in Cebu City, First Interstate Bank based in Tacloban City, and Philippine Countryside Rural Bank based in Cebu City.

Earlier this week, four other banks of Legacy group were placed under receivership of Philippine Deposit Insurance Corp. (PDIC): Rural Bank of Paranaque, in Parañaque City in Metro Manila; Rural Bank of Bais, in Negros Oriental province; Pilipino Rural Bank, in Cebu province; Rural Bank of San Jose, in Batangas province; and Rural Bank of Nueva Caceres, in Naga City in Camarines Sur province.

The central bank, Bangko Sentral ng Pilipinas (BSP), said in a statement that it had been monitoring these banks well before the global financial turmoil began, because of potentially unsafe and unsound banking practices.

The Legacy group had engaged the BSP in a legal battle that constrained the BSP from taking action based on the findings of deficiency submitted by its examiners. Earlier rulings by lower courts favored the banks’ pleading for due process, but on Nov. 24 the Supreme Court issued a temporary restraining order against implementation of decisions of the Court of Appeals and the Regional Trial Court of Manila, paving the way for the BSP to take action against problematic banks.

The BSP reiterated that the closed banks represented a tiny fraction of the banking system and that the Philippine banking system remained stable, highly capitalized and highly liquid.

In a separate statement, the Chamber of Thrift Banks supported the BSP decision to padlock problematic banks and disclose which had voluntarily suspended operations.

2 Cebu rural banks declare holiday
http://business.inquirer.net/money/topstories/view/20081210-177104/2-Cebu-rural-banks-declare-holiday
By Jhunnex Napallacan, Kit Bagaipo
Philippine Daily Inquirer
First Posted 02:41:00 12/10/2008

CEBU CITY, Philippines — Philippine Countryside Rural Bank Inc. (PCRBI) and Pilipino Rural Bank Inc. (PRBI) have declared a bank holiday, taking their depositors by surprise.

The two banks were part of the Legacy group, a conglomerate of rural banks and pre-need companies.

In Tagbilaran City, the depositors of the PRBI learned about the bank holiday only through a notice posted at the bank entrance on Monday, which said the management was waiting for an emergency loan from the central bank to service all transactions of its clients.

In an interview Tuesday, a client with a P2-million deposit in PRBI said she felt worried when her calls to PRBI manager Delia Duliquez, who she said was a friend, remained unanswered.

The bank attracted many depositors through one of its products that offered to double deposits in five years.

PCRBI closed on Tuesday its branches in Lapu-Lapu City, Mandaue City, Banilad, and Liloan town.

Nobody answered the telephone in any of the branches although the PCRBI management reportedly sent a statement to local journalists through a text message.

"The management is working with the regulators to bring operation back to normal," PCRB president Gary Cando said in the statement sent through text message.

The Philippine Daily Inquirer reported earlier that the central bank, Bangko Sentral ng Pilipinas (BSP), in an audit done on July 31, 2007, had found PCRBI and PRBI, along with seven other banks of the Legacy group, to be undercapitalized.

The other banks included Rural Bank of Parañaque Inc., Rural Bank of San Jose (Batangas) Inc., Rural Bank of Carmen (Cebu) Inc., Rural Bank of Calatagan (Batangas) Inc. (now Dynamic Rural Bank), Rural Bank of DARBCI Inc., Rural Bank of Kananga (Leyte) Inc. (now First Interstate Rural Bank) and Rural Bank of Bisayas Minglanilla (now Bank of East Asia).

According to BSP audit findings, the rural banks of the Legacy group have a capital deficiency totaling P2.5 billion, ranging from P1.4 million for Dynamic Bank to P983.5 million for Rural Bank of Parañaque.

The BSP recommended that the Legacy group banks be placed under receivership but the banks sought the issuance of a temporary restraining order to stop BSP from implementing its planned takeover.

The Manila Regional Trial Court Judge Nina Antonio-Valenzuela, in her June 4 order, issued a temporary restraining order, which prevented the BSP from acting on the findings of its examiners or even submitting reports to the Monetary Board, which in effect prevented the regulator from closing the insolvent banks.

However, the Supreme Court issued early this month a restraint order on the enforcement of the trial court rulings that would enable the BSP to act on its adverse findings of the banking institutions.

In a phone interview Tuesday afternoon, the BSP said it would send bank examiners to Cebu to check on the situation of the PCRBI branches.

Marie Kristine Pajarillo, an officer at the BSP's Financial Consumer Affairs Group, however, said the group was still verifying if there was official notification from the bank to the BSP on the decision to declare a bank holiday.

Meanwhile, Antonio Wycoco, vice president and marketing division head of the Legacy group's pre-need insurance company, said in an interview Tuesday morning that his company was undergoing rehabilitation.

Wycoco said Legacy's pre-need company had been offering another savings scheme that would double the money of investors in three years, with the interest payable in checks. He said their investment product was entirely different from that of the Legacy group's banking division.

Wycoco said the Legacy management requested a two-month moratorium on all interest and principal investment payments starting last November.

However, since both companies were in financial trouble, the group's assets may be utilized in paying out investments and liabilities.

If rehabilitation efforts would fall through, Wycoco disclosed that the management of Legacy might apply for dissolution with the Securities and Exchange Commission.

"The company already discussed the possibility that if the company could not rehabilitate, then the most likely step would be to return the investors' capital by applying for dissolution," he said.

Under the process of dissolving the company, its assets will be liquidated to pay out investors.

Wycoco warned, however, that this process would take time.

bartstrife99

December 14th, 2008, 04:18 PM

kaka loan ko lang ng 40k sa BDo in just 1 week lang ehh siguro in secret lang nila pero ang lakas ng kita tlaga ng BDO at SM corp's kaya kaya nilang tiisan yung nawalang pera mula sa lehman.

-TC-

December 17th, 2008, 04:02 AM

http://bworld.com.ph/BW121708/content.php?id=021

Strong financial sector needed — BSP, PSE

BusinessWorld
December 17, 2008

THE CENTRAL BANK and the stock exchange yesterday urged Congress to act on measures designed to strengthen the local financial sector even if it has largely escaped a financial meltdown gripping developed countries.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said "continuing banking reforms are needed to sustain financial reforms" during a briefing called by the House economic affairs and banks and financial intermediaries committees.

The central bank is pushing for amendments to its charter, he said, and supports the doubling of the maximum deposit insurance coverage to P500,000.

Francis Ed. Lim, Philippine Stock Exchange (PSE) president, said tax perks will draw investors to the local bourse, which has slumped along with other regional markets.

He urged Congress to remove the initial public offering (IPO) tax; reduce the stock transaction tax (STT) to 1/4 of 1% from 1/2 of 1%; and introduce a lower corporate income tax for companies that go public. He also proposed the removal of the documentary stamp tax on shares traded at the exchange. Cebu City Rep. Ramon H. Durano, economic affairs committee chairman, requested the PSE to submit drafts of these bills. He said the committee will "try to fast track pending bills that were endorsed by the central bank."

Click on link above for the complete article.

teresa1

December 19th, 2008, 05:28 AM

^^^^

e pano na yang mga depositor diyan sa pinadlock na bangko???

tomguts na rin?

amigo32

December 19th, 2008, 12:20 PM

^^^^

e pano na yang mga depositor diyan sa pinadlock na bangko???

tomguts na rin?

:lol:puede namn silang kumain:D j/k

lightsaber46

December 20th, 2008, 03:00 AM

insured naman ng PDIC ang deposits up to 250K... the problem is kung mas mataas pa dun yung deposit.

le Reine

December 20th, 2008, 03:07 PM

:lol:puede namn silang kumain:D j/kLet them eat cake! :lol::jk:

What?! I saw rural bank of Parañaque! How did that happen!?! :nuts::nuts:

lightsaber46

December 22nd, 2008, 02:34 AM

Monday, December 22, 2008
http://www.manilatimes.net/national/2008/dec/22/yehey/business/20081222bus2.html

Mining, Property, BPO
among hardest hit next year

By Chino S. Leyco, Reporter

DEUTSCHE Bank said the Philippine property, electronics, commodity and mining, as well as the business process outsourcing (BPO) sectors would be hardest hit by the global financial crsis next year.

In its 2009 outlook, the German lender said the Philippine economy will not face a crisis-like situation next year even as growth is expected at its slowest since 2001.

The bank said the country’s economy is less susceptible to extreme risk aversion in this round than during the Asian financial crisis, thanks to strong ties to global trade and overseas Filipino worker (OFW) remittances.

Deutshche also said the country’s “economy will see its slowest rate of growth since 2001,” projecting a gross domestic product (GDP) expansion of 3.3 percent next year.

In contrast, the government forecast GDP growth of between 3.7 percent and 4.6 percent.

Forward looking indicators of consumer confidence and business expectations showed that the sentiment has worsened due to the inflation shock during the first semester, and the peso’s depreciation in the second half of this year.

Deutsche said the once-soaring property or construction sector has begun to cool as jobs and income prospects wane, while businesses related to the electronics sector have been receiving the worst impact of the global slowdown.

After enjoying a surge in prices during the first part of the year, the commodities and mining sector next year is looking at some of the lowest prices seen in this decade, with the demand outlook weak as well.

The BPO sector, a dynamic and fast growing sector in recent years, will likely see much lower growth due to economic activities being scaled back by multinational companies, Deutsche said.

As early as the third quarter of 2008, Philippine economic growth weakened to 4.6 percent compared with 7.1 percent in the same period last year.

The GDP growth in the first nine months also stood at 4.6 percent compared with 7.5 percent in the same period last year.

-TC-

December 23rd, 2008, 02:15 AM

Latest update:

http://business.inquirer.net/money/breakingnews/view/20081223-179519/4-more-rural-banks-closed

LEGACY AFFILIATES
4 more rural banks closed
By Doris Dumlao
Philippine Daily Inquirer
12/23/2008

FOUR more ailing rural banks believed affiliated with the bankrupt Legacy pre-need group were padlocked Monday by the Bangko Sentral ng Pilipinas.

In a statement, the BSP said it placed the following banks under receivership: Rural Bank of Carmen based in Cebu; Nation Bank in Bacolod City; Rural Bank of DARBCI in General Santos City; and Bicol Development Bank in Legazpi City.

The banks were shuttered after the BSP established their assets were insufficient to cover their liabilities (insolvency), they had liquidity problems, and they practiced unsafe and unsound banking.

Under receivership

With this latest act, the BSP has placed under Philippine Deposit Insurance Corporation receivership all the 10 Legacy-affiliated banks, plus three others linked to them, that had earlier filed for a restraining order from the courts against the BSP.

“The receivership paves the way for the PDIC to take over the banks’ assets to protect the interests of their depositors and to start processing insurance claims,” the BSP said.

Two of the recently padlocked rural banks had declared a voluntary suspension of operations prior to the BSP’s approval of a resolution placing them under PDIC receivership. Nation Bank has been on bank holiday since Dec. 12 and DARBCI since Dec. 17.

“These banks were already being closely monitored and engaged by the BSP in accordance with rigorous due process requirements mandated by law, long before the global financial turmoil, for potentially unsafe and unsound banking practices that could pose a danger to their customers,” the BSP said.

The BSP quickly clarified, however, that the banks represented a tiny fraction of the total Philippine banking system, which overall remained “stable, highly capitalized and highly liquid.”

As of end-October, the local banking system had 38 universal banks, 78 thrift banks, 672 rural banks and 45 cooperative banks.

Ten of these banks earlier engaged the BSP in a legal battle and constrained the banking regulator from taking action based on the findings of deficiency submitted by its examiners.

The banks had petitioned the courts to stop the BSP from submitting to its policy-making Monetary Board the 2007 report of examination covering their respective banks and to prevent the MB from acting on the basis of the examination reports.

Backed by SC

Earlier rulings by lower courts favored the group of banks but on Nov. 24, the Supreme Court issued a temporary restraining order against the implementation of such lower court decisions, giving the BSP leeway to take action against problematic banks.

The banks earlier padlocked by the BSP were Bank of East Asia, Philippine Countryside Rural Bank and Pilipino Rural Bank, all based in Cebu; First Interstate Bank in Tacloban City; Rural Bank of Parañaque; Rural Bank of Bais in Negros Oriental; Rural Bank of San Jose and Dynamic Bank (Rural Bank of Calatagan), both in Batangas; and San Pablo City Development Bank in Laguna.

Update...

http://business.inquirer.net/money/topstories/view/20081213-177768/3-more-rural-banks-padlocked

3 more rural banks padlocked
By Doris Dumlao
Philippine Daily Inquirer
12/13/2008

The central bank on Friday padlocked three more rural banks affiliated with the Legacy Group, using the leeway recently obtained from the Supreme Court in taking prompt action against insolvent banks.

Placed under receivership were Bank of East Asia based in Cebu City, First Interstate Bank based in Tacloban City, and Philippine Countryside Rural Bank based in Cebu City.

Earlier this week, four other banks of Legacy group were placed under receivership of Philippine Deposit Insurance Corp. (PDIC): Rural Bank of Paranaque, in Parañaque City in Metro Manila; Rural Bank of Bais, in Negros Oriental province; Pilipino Rural Bank, in Cebu province; Rural Bank of San Jose, in Batangas province; and Rural Bank of Nueva Caceres, in Naga City in Camarines Sur province.

The central bank, Bangko Sentral ng Pilipinas (BSP), said in a statement that it had been monitoring these banks well before the global financial turmoil began, because of potentially unsafe and unsound banking practices.

The Legacy group had engaged the BSP in a legal battle that constrained the BSP from taking action based on the findings of deficiency submitted by its examiners. Earlier rulings by lower courts favored the banks’ pleading for due process, but on Nov. 24 the Supreme Court issued a temporary restraining order against implementation of decisions of the Court of Appeals and the Regional Trial Court of Manila, paving the way for the BSP to take action against problematic banks.

The BSP reiterated that the closed banks represented a tiny fraction of the banking system and that the Philippine banking system remained stable, highly capitalized and highly liquid.

In a separate statement, the Chamber of Thrift Banks supported the BSP decision to padlock problematic banks and disclose which had voluntarily suspended operations.

-TC-

December 23rd, 2008, 03:09 AM

http://www.bworldonline.com/BW122308/content.php?id=021

Banks remain well-capitalized — BSP
Business World
December 23, 2008

PHILIPPINE BANKS remain strong, the central bank yesterday said, which should reassure depositors shaken by the recent spate of rural bank closures and the collapse of large banks abroad.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the banking system’s capital adequacy ratio — a measure of financial strength — dipped to 14.32% on solo basis and to 15.25% on consolidated basis as of June, down from 14.49% on solo basis and 15.49% on consolidated basis as of March.

"Solo basis" covers banks’ head offices and branches, while "consolidated basis" includes their subsidiaries.

Despite the lower figures, the central bank said the industry ratio remains way above the BSP’s minimum requirement of 10% and the Bank for International Settlement’s (BIS) 8%.

The capital adequacy ratio or CAR indicates how much capital a bank has in relation to its risk-weighted assets, such as money it has loaned out. The central bank sets a minimum level of CAR to ensure that a bank can absorb losses, so that depositors are protected.

Philippine banks began abiding by the Basel 2 framework since July last year, which requires them to set aside more capital for riskier assets.

The CAR of universal and commercial banks, thrift banks and rural and cooperative banks also remained above the BSP’s and the BIS’s required minimum as of June.

Universal and commercial banks saw a 0.12-percentage point decline in their CAR to 14.34% in June from 14.46% a quarter ago, with the increase in risk-weighted assets to P3.09 billion from P2.94 billion offsetting the increase in capital to P442.9 billion.

The central bank noted that these banks’ capital level grew by P17 billion in the second quarter due to the issuance of Tier 2 capital by two domestic banks.

Including their subsidiaries, universal and banks’ CAR of 15.47% as of end-June was lower than the 15.66% in the previous quarter, also as a result of higher growth in risk-weighted assets.

Thrift banks’ CAR likewise to 13.5% as of June from 15.16% as of March on both solo and consolidated basis. Rural and cooperative banks’ CAR likewise slid to 13.52% in the second quarter from 13.67% in the previous quarter.

Click link above for the complete article

Igsuonnimo

December 23rd, 2008, 10:05 PM

PNB-AlliedBank merger delayed until mid-2009

Business Mirror
Tuesday, December 23,2008

PHILIPPINE National Bank (PNB) said on Tuesday its merger with Allied Banking Corp., which was expected to be completed before the year ends, has encountered delays due to a regulatory issue in the US.

“The merger is now expected to be completed at or about the middle of 2009,” PNB corporate secretary Renato Fernandez said in a letter to the Philippine Stock Exchange.

US banking regulations require AlliedBank to divest its 28-percent stake in California-based Oceanic Bank, Fernandez said.

The Bangko Sentral ng Pilipinas has been formally notified about the development, he said.

“Except for this development, merger-related activities have been in full swing and on track,” Fernandez said.

“Some of these are the identification and synchronization of information-technology systems; alignment of products, policies and procedures; branch rationalization; and review for consolidation of required regulatory documentation,” he said.

The ATM systems of the two Lucio Tan-controlled banks have, in fact, already been integrated and allow customers to use either banks’ ATM network free of charge, Fernandez said.

Ahead of the merger, he said the banks are to implement organization changes.

Beginning January 1, 2009, Domingo Chua will serve as chairman of AlliedBank; Chua has resigned as director of PNB. Replacing him in the PNB board is lawyer Estelito Mendoza.

Gloria Tan-Climaco has been elected director of PNB, taking the place of Macario Te, who will retire effective December 31 this year.

PNB executive vice president for global operations Anthony Chua also serves as concurrent chief operations officer of AlliedBank.

PNB, the surviving entity, will emerge as the country’s fourth-largest bank after the merger which will be undertaken through a share swap.

PNB currently ranks sixth-largest in terms of assets. Erik de la Cruz

cool_blue

December 27th, 2008, 08:27 AM

Hay naku kung pinalabas lang ang katotohan baka mag panic ang mga depositors ng BDO....:ohno::ohno::ohno:i guess behind of this publicity they want to attract more investors and depositors hehehhe...

Yes, I agree. They want to attract more depositors... Very aggressive ang BDO. See that before the merger they're only number 5 or 6 and they bought Equitable PCI which is number 3, now they're number 2 and they want to claim the number 1 position.

Parang gusto yata ng mga companies under the SM Group na number 1 sila in their respective industries... :ohno:

-TC-

December 27th, 2008, 04:02 PM

Yes, I agree. They want to attract more depositors... Very aggressive ang BDO. See that before the merger they're only number 5 or 6 and they bought Equitable PCI which is number 3, now they're number 2 and they want to claim the number 1 position.

Parang gusto yata ng mga companies under the SM Group na number 1 sila in their respective industries... :ohno:

Yes BDO is aggressive but aren't Metrobank and other banks aggressive as well? Just compare all their interest rates for deposits and loans.

The fact is BDO was #1 in terms of asset size as of the end of 3Q 2008. Metrobank was a far #2.

Metrobank is not expected to overtake the Php60Bln lead of BDO in 4Q 2008 so the latter will end up as #1 by the end of this year.

And what is wrong in being the biggest and the best? Isn't being #1 the goal of any business whether it is Henry Sy's or yours?

gen1

December 28th, 2008, 02:59 AM

BDO was able to shrug off its lehman exposure due to its sheer size.

RCBC was in more trouble because though its exposure was less, RCBC was a lot smaller than BDO.

The financial crisis affected ALL the banks. As my friend whose financial advice I sought a couple of months ago when citibank's troubles were surfacing told me - "all the banks are affected. citibank is too big for them to let fail. would you rather put your money under your pillow?" :D

cool_blue

December 28th, 2008, 06:35 AM

Yes BDO is aggressive but aren't Metrobank and other banks aggressive as well? Just compare all their interest rates for deposits and loans.

The fact is BDO was #1 in terms of asset size as of the end of 3Q 2008. Metrobank was a far #2.

Metrobank is not expected to overtake the Php60Bln lead of BDO in 4Q 2008 so the latter will end up as #1 by the end of this year.

And what is wrong in being the biggest and the best? Isn't being #1 the goal of any business whether it is Henry Sy's or yours?

It's only a point of view of a Metrobanker... :nocrook:

-TC-

December 28th, 2008, 07:06 AM

It's only a point of view of a Metrobanker... :nocrook:

George Ty is pissed at being overtaken by another taipan. Hehe. :D

-TC-

January 6th, 2009, 06:45 PM

http://www.bworldonline.com/BW010709/content.php?id=021

Lack of guidelines delays PERA law implementation
Gerard S. dela PeñaBusinessWorld
January 7, 2009

IMPLEMENTING guidelines of a law seeking to establish voluntary personal retirement plans remain on the drawing board close to five months after President Gloria Macapagal Arroyo inked the measure.

Jose Fernando B. Camus, head of the corporate finance and capital market development committee of the Financial Executives Institute of the Philippines (FINEX), said the Bureau of Internal Revenue (BIR) is still setting the rules for administering the law’s tax provisions.
"But we have begun discussions with [the BIR] already," he added.

A working group composed of representatives of FINEX, the Angara Abello Concepcion Regala and Cruz Law Offices (ACCRALAW) and SGV & Co., as well as central bank officials, have come up with draft implementing rules.

These draft rules will be finalized by FINEX members before these are forwarded to the central bank for approval.

A central bank source, who requested anonymity, said the central bank will check if inputs from the private sector "correspond with what the law says." He added the central bank will come out with the implementing guidelines within the month.

Republic Act 9505 or the Personal Equity and Retirement Account (PERA) Act of 2008 assigns the Bangko Sentral ng Pilipinas (BSP) along with "concerned regulatory authorities" to come up with the criteria for accrediting PERA administrators, custodians and investment managers and for approving PERA investment products, among others.

The BIR, on the other hand, "shall issue the implementing rules and regulations regarding all aspects of tax administration relating to PERA."

Atty. Eufrocina S. Casasola, BIR director, said the BIR and the Finance department are still discussing the revenue regulations covering the PERA law’s tax provisions. She said these should be finalized within the month.

The central bank’s implementing guidelines will also cover the tax treatment of contributions and investment income, among others, she said, but the bureau’s revenue regulations will supplement these in detail.

"We will study the BSP’s draft implementing guidelines to check if these correspond with our regulations," she added.

A PERA refers to a voluntary retirement account. PERA contributions are invested in investment products that include unit investment trust funds, mutual funds, insurance and pre-need plans, and stocks, among others.

Contributors may maintain a maximum of five accounts at any one time. The maximum annual contribution is P100,000 per year. In the case of OFWs, the ceiling is P200,000 per year.

A contributor will be entitled to a 5% tax credit. His income from investments will be tax-exempt.

Guidelines drafted by FINEX as of December 12 state that PERA administrators, or those who oversee the PERA on behalf of the contributors, need to undergo pre-qualification by the central bank, Securities and Exchange Commission and Insurance Commission before they can be accredited by the BIR.

The guidelines also state that PERA investment products must be pre-approved by regulators.

Entitled to the 5% tax credit are contributions for the year, which should not exceed the P100,000 or P200,000 maximum. Employers’ contributions are excluded from the computation.

Income from bank deposits will be exempted from 20% final tax while those from long-term deposits or investments will be exempted from the applicable tax on interest income.

Interest income from funds parked in foreign currency deposit units will be exempted from the 7.5% final tax.

The 10% tax on cash and/or property dividends received from domestic firms, joint stock company, insurance or mutual fund company and regional headquarters of multinational companies will be waived, as well as the regular ncome taxes.

-TC-

January 20th, 2009, 05:50 AM

http://bworld.com.ph/BW012009/content.php?id=021

Deposit insurance bill hurdles third reading
BusinessWorld
January 20, 2009

THE SENATE yesterday unanimously approved on third and final reading a measure increasing the insured deposit ceiling in a bid to boost confidence in the local banking sector amid a global economic downturn.

Thirteen senators voted for the bill’s approval. There were no negative votes or abstentions.

Senate Bill (SB) No. 2964 seeks to amend Republic Act No. 3591 or the Philippine Deposit Insurance (PDIC) Act by increasing the maximum deposit insurance coverage to P500,000, from the current ceiling of P250,000.

Senator Edgardo J. Angara, sponsor of the measure and chairman of the committee on banks, financial institutions and currencies, said that about 97.23% of the more than 31 million deposit accounts in the country will enjoy the benefits of the increased deposit insurance coverage.

The measure also specifies that investment products such as bonds, securities, trust accounts and other similar instruments and deposit accounts or transactions that are unfounded, fictitious or fraudulent will not be covered.

It also gives the PDIC, the state deposit insurer, the authority to form and operate or contract to operate subsidiaries or corporations whose whole primary purpose is to operate as bridge bank or to manage acquired assets of the PDIC. Bridge banks refer to a temporary bank licensed by the Bangko Sentral ng Pilipinas.

The PDIC has been seeking a bridge bank authority to resolve bank failures in an orderly way. It said that if it were allowed to establish a bridge bank, it can preserve banking functions by assuming a bank’s assets and liabilities until a resolution is reached.

SB 2964 also allows for an adjustment in the assessment premium rate paid by banks. The rate at present is a fifth of 1% of total deposits per year; the bill allows this to be raised three years after the new law takes effect.

The adjustment, however, shall not exceed one-tenth of 1% per year and in no case shall the assessment exceed one-half of 1% per year.

The bill further specifies that deposits marketed, solicited, accepted and received in violation of the law or rules of the Bangko Sentral ng Pilipinas and deposits accounts or transactions emanating from unsafe and unsound banking practices as determined by PDIC will not be covered.

Disagreeing provisions in SB 2964 and in the House version will be tackled by a bicameral committee.
The House version awaits approval on second reading.

The capitalization of PDIC contained in the House version will be finalized during the ways and means committee hearing today, said Manila Rep. Jaime C. Lopez, chairman of the House banks and financial intermediaries committee in a phone interview.

"Congress should appropriate a certain amount to help out the PDIC attain its objectives," he said.
The Senate version has no capitalization requirement.

Mr. Angara said the chamber will ratify the bill before the end of January.

"These are extremely confusing times where panic can only make matters worse. Maintaining, if not restoring confidence in the banking system should be our priority," he said.

Click on link for the full article.

-TC-

January 22nd, 2009, 06:36 PM

http://www.bworld.com.ph/BW012309/content.php?id=002

East West wins Philam Savings
BusinessWorld
January 23, 2009

MID-SIZED commercial bank East West Banking Corp. has bagged the local consumer banking arm of American International Group, Inc. (AIG) in a tough race that involved some of the country’s biggest tycoons.

East West Banking Corp. which is backed by real estate industry stalwart Filinvest Group of the Gotianun family, was chosen as the winning bidder for AIG Philam Savings Bank, a senior official said.

AIG is scheduled to announce the sale today in a press briefing, according to invitations sent out to the Philippine media. East West Bank will join the press conference, the official, who requested anonymity, said.

"Yes. We will announce tomorrow that we’ve signed," he told BusinessWorld when asked whether the bank had cornered the deal.

The other suitors were Banco de Oro Unibank, Inc. and China Banking Corp., both controlled by retail magnate Henry Sy. Sources said Robinsons Savings Bank of John Gokongwei was also one of the four in a shortlist.

The East West official did not divulge the amount of the deal, citing a nondisclosure agreement with AIG and its Philippine unit Philippine American Life and General Insurance, Inc. (Philamlife), only saying that the pricing was based on what its value is to us, the potential of the business".

"Whatever we offered, that’s it," he said.

Philamlife officials were not immediately available for comment. Reuters reported that a source put the price at about P2 billion.

Philam Savings is 45% owned by AIG Consumer Finance Group and 45% by Philamlife, the country’s largest insurer. AIG’s local savings bank had a book value of P1.3 billion and assets worth P14.78 billion as of end-September 2008, according to published financial statements.

lightsaber46

January 29th, 2009, 02:17 AM

Top lender seen tightening up in 2009
http://business.inquirer.net/money/breakingnews/view/20090129-186162/Top-lender-seen-tightening-up-in-2009

Philippine Daily Inquirer
First Posted 00:20:00 01/29/2009

Filed Under: Banking, Loan Markets, Company Information

Banco de Oro Unibank, the country’s biggest bank in assets, is expected to slow down its lending considerably this year in view of effects of the global crisis on the local economy, according to a study by investment bank JP Morgan.

After a 25-percent annual growth registered in the past two years, Banco de Oro lending is likely to grow 8-10 percent this year “as the company implements stricter risk-management policies due to slowing economic growth,” JP Morgan said in a paper on the Philippine economy and the banking sector.

Forecasts have been that overall bank lending in the Philippines will slow down this year as banks turn more cautious and demand drops because of weak appetite for investments amid an uncertain economic climate.

The central bank has said it expects overall bank lending growth to slacken this year to a little over 10 percent after hitting over 20 percent last year. It says a 10-percent growth in lending will still be respectable, given the economic environment.

JP Morgan said Banco de Oro’s business would benefit from corporate demand, as the government implements more infrastructure projects, and from consumer demand as the SM group, to which the bank belongs, expands its retailing business.

As of end-September, Banco de Oro had total assets of P743.49 billion. Michelle V. Remo; edited by INQUIRER.net

Muffstar

January 29th, 2009, 09:21 AM

-TC-

February 5th, 2009, 03:00 AM

Reposting the article re: BSP Charter here...

BSP cites urgency of charter changes

THE CENTRAL bank yesterday said shackles imposed by its charter, which prevented it from acting promptly on problematic rural banks belonging to the Legacy Group, should prompt Congress to begin deliberating on amendments to the law.

"I think this should be a priority," Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. told reporters late last Tuesday.

Under its existing charter, which was passed more than 15 years ago, the BSP is required to exercise "extraordinary diligence" in conducting its regulatory functions — something the new BSP charter, if passed, will change.

Mr. Tetangco said this rule, which is not required of any other government agency except the BSP, has made it highly susceptible to law suits.

"[There were delays] because we are required, under the law, to exercise extraordinary diligence," he told reporters late Tuesday night. "That’s a very high standard."

The only other group of people that the law requires extraordinary diligence from are drivers of public utility vehicles, because of the supposed value of their cargo — people.

Aside from the relaxation of the extraordinary diligence requirement, the BSP said exemption from Republic Act 1405 — or the Deposit Secrecy Law — would make checking for malicious banking activities easier.

"The law will still be in effect — but our recommendation is to lift the law for bank examiners," Deputy Governor Nestor A. Espenilla said.

He said once the money involved in dubious transactions is put in deposit accounts, the paper trail ends and the BSP becomes powerless.

This makes it difficult for regulators to check the nature of suspicious bank accounts, whose deposits may have come from banking scams.

Last December, the BSP shuttered several Legacy banks, which attracted investors with "double-your-money" schemes, after being found to be severely undercapitalized.

The BSP said because of the weaknesses in its charter, together with a restraining order slapped by the Manila Regional Trail Court and latter affirmed by the Court of Appeals, the regulator was unable to close down the banks earlier, resulting in more people being affected by the alleged fraudulent banking schemes.

Mr. Espenilla said investigations against the Legacy banks had started as early as 2005, and there was already enough reason to close them down as early as 2007, but weaknesses in its charter slowed down the investigations.

The amendments of the BSP charter have been pending since the term of the late former Governor Rafael B. Buenaventura. It is currently upfor second reading at the Senate, while the House has yet to act on its own version.

Manila Rep. Jaime C. Lopez, chairman of the House banks and financial intermediaries committee, said the BSP should be prepared for disappointment.

"We will have to look into these (lifting of deposit secrecy and extraordinary diligence requirements), but members of Congress are not really inclined to support these kinds of proposals to give [the BSP] that kind of power," he said in an interview yesterday.

He argued that the problems created by the Legacy rural banks did not stem from the tightness of the laws in place, but from lapses in the BSP’s implementation.

He said some congressmen have said that granting the BSP’s recommended amendments would "endanger" depositors’ right to privacy.

"[The BSP] should be more strict, especially right now with the emergence of scrupulous bank owners that have discovered schemes that will enable them to manipulate the system for their own interest," he said.

"But I don’t want to go to any conclusions," he said, saying the House would hear the BSP’s side, together with other parties involved, including private banks.

He said the House has prioritized the approval of the pre-need code. — Paolo Luis G. Montecillo
http://www.bworldonline.com/BW020509/content.php?id=021

jaker449

February 6th, 2009, 05:52 PM

I was just at Metrobank office in Makati today, and about to sign my loan documents, but when I saw the bank charges to be 52,000PHP, I told them I'd come back to think about it. They also gave me a 1 year fixed rate, which is not what I wanted.

Can someone tell me what is the regulated bank fee for home loans. Is it supposed to be 1%, 2% of the loan amount? My loan amount by the way is 2.5M PHP.

tnx

leechtat

February 8th, 2009, 08:09 PM

What are the interest rates on home loans at present in the Philippines ?

Does anyone have recommendations as to which Banks are better than others ? We are buying our condo through Ayala, so I would assume they will steer us to BPI ?

But having limited knowledge of the local banking industry any info would be grateful.

I was just at Metrobank office in Makati today, and about to sign my loan documents, but when I saw the bank charges to be 52,000PHP, I told them I'd come back to think about it. They also gave me a 1 year fixed rate, which is not what I wanted.

Can someone tell me what is the regulated bank fee for home loans. Is it supposed to be 1%, 2% of the loan amount? My loan amount by the way is 2.5M PHP.

tnx

sent you both pm's...

venntro

February 9th, 2009, 04:18 AM

DOJ panel to probe BSP charges vs Legacy (http://http://www.gmanews.tv/story/147901/DOJ-panel-to-probe-BSP-charges-vs-Legacy)
02/09/2009 | 09:22 AM

MANILA, Philippines - The Justice department on Monday said it has set up a panel to look into the charges lodged by the Bangko Sentral ng Pilipinas (BSP) against officials of the controversial Legacy Group.

In a radio interview, Justice Sec. Raul Gonzalez said he ordered the creation of the panel to receive the complaint lodged by the BSP and conduct a "thorough" investigation against Legacy Group.

"I already set up a panel for that. The BSP should have reason and basis for what referral they make," Gonzalez said in an interview on dzXL radio.

Last weekend, the BSP lodged the second wave of charges against officials of Legacy but failed to nail owner Celso delos Angeles.

Delos Angeles was not named as an official in any of the four firms named in the charges.

However, Gonzalez said he has ordered his panel to go deeper into the complaints lodged by the BSP. "Obviously without advancing a theory, it would appear that delos Angeles should be one of those investigated," he said.

But in a separate radio interview, BSP governor Amado Tetangco, Jr. said the agency is preparing another wave of charges which may also include delos Angeles as respondent.

"Itong ginagawa ng BSP pagpapatuloy ng investigation at case buildup. Sa aking paningin marami pang kaso ang isasampa ng BSP, hindi pa kami tapos dito (What we are doing is a continuing investigation and case buildup. I think there are still more cases we can file. We're not yet through)," Tetangco said in an interview on dzXL radio.

He said last weekend's wave of charges was the second since the first wave of charges last Jan. 5. He did not say when the next batch of charges will be filed.

When asked if delos Angeles will be included in the next batches of charges, he said it will depend on the evidence they can gather. "As we are able to build up additional cases based on the evidence we continue to gather we will file appropriate cases accordingly. Lahat na may kinalaman dito isasama sa kasong ifa-file (Everyone who is liable will be included)," he said.

In the meantime, Tetangco said victims of the mess involving the Legacy Group can expect to start getting their deposits from the Philippine Insurance Deposit Corp. (PDIC) at the middle of this month.

He said the PDIC already hired external auditors to validate deposit insurance claims.

"Titingnan nila ang claims kaya nag-hire sila ng external auditors para matulungan sila sa pag-validate ng mga deposit insurance claims (They will look at the claims and they have hired external auditors to help validate the claims). Based on what PDIC has said, they will be
able to begin paying out deposit claims around middle of February," he said.

"Malapit na yan (The PDIC will start in a few days), in a few days," he added.

Last weekend, the BSP said it has filed cases against officers and employees of four rural banks under the controversial Legacy Group, initiating the process for possible criminal charges before the courts.

Tetangco said 116 counts of falsification of public and commercial documents were filed along with two counts of false statements against 18 officers, employees, and agents of four rural banks belonging to the Legacy Group.

The banks were identified as the Rural Bank of Parañaque, Rural Bank of DARBCI in South Cotabato, Rural Bank of San Jose in Batangas, and Bank of East Asia.

Delos Angeles was not included in the charges since he was not listed as an official or stockholder in any of the Legacy group of companies that were charged.

Espenilla said the BSP was only able to move against the Legacy Group in late November when the Supreme Court issued a temporary restraining order against the CA.

"People should know that it was a struggle all the way," Espenilla said. "We were not harassing these banks, and we were not sleeping on our jobs."

According to Espenilla, the Legacy banks were caught using manufactured official documents that have been used for fictitious loans.

"Getting deposits from the public was only the first part of the scheme," Espenilla said. "The second essential part is taking that away and fictitious loans were just one scheme. There were many others."

Depositors of the Legacy Group now had only the PDIC as their only recourse by claiming their deposit insurance up to P250,000. - GMANews.TV

venntro

February 9th, 2009, 09:05 AM

De los Angeles faults BSP anew for collapse of rural banks (http://http://www.gmanews.tv/story/147938/De-los-Angeles-faults-BSP-anew-for-collapse-of-rural-banks)
02/09/2009 | 02:28 PM

MANILA, Philippines - Businessman Celso de los Angeles on Monday accused a former incumbent officials of the Bangko Sentral ng Pilipinas (BSP) of harassment even as the central bank said it has not filed a case against him for the spate of closures of rural banks.

At the resumption of the House committee on banks and financial intermediaries, De los Angeles also blamed an incumbent central bank official for contributing to the collapse of his rural banks under the Legacy Group.

GMA News’ Ivan Mayrina reported on QTV’s Balitanghali that De los Angeles said Efren Reyes, brother of former BSP deputy governor Alberto Reyes, owed him some P1.4 million.

De los Angeles alleged that whenever he would demand the payment from Efren Reyes, the BSP would conduct a special audit on his banks.

But Alberto Reyes said he has “no personal knowledge of any alleged transaction" between De los Angeles and his brother and that he has not been privy to his brother’s agreements.

“The allegation of special audit, which implies, harassment on my part, is factually and legally baseless," Alberto Reyes added.

De los Angeles also accused incumbent BSP deputy governor Nestor Espenilla Jr. of blocking the implementation of his business plans, which the businessman said could have prevented the closure of the rural banks.

Espenilla denied these allegations as he tagged the Legacy Group as an “organized syndicate" in the country’s banking and financial system.

Espenilla also bared the group’s alleged scheme. He said that the Legacy Group would entice the public with “tantalizing promises" that it cannot meet. When the banks eventually collapse, Espenilla said the group will “make a clean getaway by selling out the banks to new investors."

“The PDIC [Philippine Deposit Insurance Corporation] and the tax payers will all be left holding the proverbial empty bag," Espenilla said.

The banks under the Legacy Group were shuttered and placed under the receivership of the PDIC in December for insufficient capital, poor liquidity and for practicing unsound and unsafe banking practices.

The PDIC had earlier estimated it needs to shell out a total of P14 billion to the banks’ depositors.

No raps filed vs De los Angeles

Also during the hearing, lawmakers grilled the BSP for not including De los Angeles among the respondents in the string of charges filed against Legacy Group officials.

But BSP Office of the Special Investigation director Alfonso Penaco IV explained they still have yet to complete its investigation on the matter and that there is still not enough evidence to implicate De los Angeles.

Last weekend, the BSP said it has filed cases against officers and employees of four rural banks under the Legacy Group, initiating the process for possible criminal charges before the courts.

BSP governor Amado Tetangco Jr. said 116 counts of falsification of public and commercial documents were filed along with two counts of false statements against 18 officers, employees, and agents of four rural banks belonging to the Legacy Group.

Earlier during the day, the Justice Department said it has set up a panel to look into the charges lodged by the BSP against the Legacy Group. - GMANews.TV

-TC-

February 9th, 2009, 06:07 PM

http://www.bworld.com.ph/BW021009/content.php?id=023

BDO finishes 2008 as largest bank in terms of resources

Business World
February 10, 2009

BANCO DE ORO UNIBANK, Inc. emerged as the country’s largest bank in terms of assets as of end-2008, breaking the stranglehold of the Metropolitan Bank & Trust Co. on the number one spot.

Based on banks’ balance sheets published in national dailies, the assets of BDO and its subsidiaries amounted to P808.04 billion as of December, edging out Metrobank, which together with its subsidiaries, had assets totaling P758.48 billion.

Metrobank had occupied the top spot from 1996 up to 2007.

BDO managed to raise its assets from P621.30 billion, and Metrobank, from P706.89 billion, in 2007.

The Bank of the Philippine Islands took the third spot with total resources of P658.42 billion, followed by state-run banks Land Bank of the Philippines and Development Bank of the Philippines with total resources of P434.03 billion and P290.87 billion, respectively.

Sixth largest is the Philippine National Bank with total assets of P276.83 billion, with the Rizal Commercial Banking Corp. close on its heels with assets summing up to P270.23 billion.

BDO swallowed the Equitable PCI Bank in May 2007, allowing it to bolt past BPI, which then ranked second to Metrobank, by the end of last year.

The bank extended P461.16 billion in loans and attracted P634.29 billion in deposits in 2008, up from P289.52 billion in loans and P444.41 billion in deposits the previous year.

Metrobank, on the other hand, approved loans totaling P351.17 billion and received deposits summing up to P585.79 billion last year, also up from P319.69 billion in loans and P530.20 billion in deposits in 2007.

Click on link for full article

venntro

February 10th, 2009, 03:45 AM

BSP: PDIC to address Legacy group victims' claims soon (http://http://www.gmanews.tv/story/148044/BSP-PDIC-to-address-Legacy-group-victims-claims-soon)
02/10/2009 | 06:58 AM

MANILA, Philippines - Depositors victimized by the failed operations of the controversial Legacy Group will get back their deposits as early as this week, the Bangko Sentral ng Pilipinas reassured.

BSP governor Amado Tetangco Jr. said the Philippine Insurance Deposit Corp. (PDIC) already hired external auditors and expects to address the claims at the middle of this month.

"Malapit na yan [The PDIC will start in a few days], in a few days," he said in an interview on dzXL radio.

"Titingnan nila ang claims kaya nag-hire sila ng external auditors para matulungan sila sa pag-validate ng mga deposit insurance claims [They will look at the claims and they have hired external auditors to help validate the claims]. Based on what PDIC has said, they will be able to begin paying out deposit claims around middle of February," he added.

Depositors of the Legacy Group now had only the PDIC as their only recourse by claiming their deposit insurance up to P250,000.

Last weekend, the BSP said lodged cases against officers and employees of four rural banks under the controversial Legacy Group.

Justice secretary Raul Gonzalez, for his part, ordered the creation of a panel to look into the charges.

Tetangco said 116 counts of falsification of public and commercial documents were filed along with two counts of false statements against 18 officers, employees, and agents of four rural banks belonging to the Legacy Group.

He identified the banks as the Rural Bank of Parañaque, Rural Bank of DARBCI in South Cotabato, Rural Bank of San Jose in Batangas, and Bank of East Asia.

Delos Angeles was not included in the charges since he was not listed as an official or stockholder in any of the Legacy group of companies that were charged. - GMANews.TV

venntro

February 11th, 2009, 01:56 AM

Banks urged to consolidate to weather crisis (http://http://www.philstar.com/Article.aspx?articleId=439119&publicationSubCategoryId=66)
By Ted P. Torres Updated February 11, 2009 12:00 AM

MANILA, Philippines - Local banks should further consolidate in order to shield them from the impact of the global financial turmoil, a top banking industry official said yesterday.

“There are just too many banks,” said Philippine Savings Bank president and CEO Pascual Garcia III, who is also president of the 82-member Chamber of Thrift Banks (CTB).

Garcia said there are too many banks that may not have the scale to cope with the crisis, the demands of the banking public, and the new regulatory environment.

“One of the challenges confronting the thrift bank industry, in scenarios like that, is the fact that there are too many banks. Too many banks that do not have the scale,” he said.

Garcia pointed out that the global crisis and the accompanying impact on the Philippine economy may likely lead to a large number of defaults in debt payments, much like what had happened during the 1997 Asian financial crisis.

These defaults will require banks to set aside provisioning for losses that may eat into the capital or reserves of a bank. Unfortunately, a large number of banks are not well capitalized to deal with defaults, he noted.

There are also the provisioning related to the Basel II global framework, regulatory requirements of the Anti-Money Laundering Council, of the risk-weighted capital requirements, and the rest of the operating expenditures that go with banking activities, including adopting to the rapid advances in information technology.

Garcia said in the case of smaller banks, those allied with conglomerates or larger commercial banks are well provisioned and capitalized, thus more capable in dealing with defaults.

The big losers when a bank goes under are the banking public and the government. The customers lose their money and the public sector has to pay for the insured deposits from reserves coming from taxpayers’ money and the banks themselves.

Garcia said the CTB would like to encourage their members to move towards consolidation or initiate mergers, although acquisitions have been more attractive lately.

Rizal Commercial and Banking Corp. (RCBC), for example, acquired Merchant Savings and Loan Association in 2007.

Recently, East West Banking Corp., a commercial bank, acquired AIG Philam Savings Bank, a thrift bank.

Sterling Banking Corp., a highly-capitalized thrift bank, meanwhile is in the market for a small or medium-sized commercial bank.

Rural banks are also consolidating as in the case of One Network Bank and GM Bank. Both rural banks are products of consolidations and mergers, thus bringing it to a scale equivalent to most thrift banks.

venntro

February 13th, 2009, 02:14 AM

Security Bank sees more lending, profit (http://http://business.inquirer.net/money/breakingnews/view/20090213-189068/Security-Bank-sees-more-lending-profit)
By Doris Dumlao
Philippine Daily Inquirer
First Posted 06:45:00 02/13/2009

Medium-sized Security Bank Corp. expects double-digit growth in net income this year on an improved outlook on core businesses despite a tough economic environment, bank president Alberto Villarosa said.

The bank’s improved earnings outlook this year — after an industry-wide downturn in 2008 — will be supported by sustained growth in lending and better treasury gains, Villarosa said in an interview.

“All core businesses will have a better 2009,” he said. “Treasury will have a better bond market and there will be growth in the consumer and corporate market.”

Security Bank is the biggest dealer of fixed-income bonds on the domestic market.

Villarosa said Security Bank’s lending portfolio expanded 40-50 percent last year. Some of the large corporate lending came from project finance deals, and the middle market, especially the Filipino-Chinese, also showed strong growth, primarily in trade-related financing, he said.

“We’re also pretty bullish on the consumer market this year,” he said.

He added, “Prudential credit and market credit risk management process must be further strengthened. You just don’t want to chase growth and stumble afterward.”

He said Security Bank would release full-year results at the end of this month or the first week of March.

In the first three quarters of 2008, the bank recorded a net income of P1.7 billion, down six percent from the year-before level. It said return on equity remained high at 19.3 percent.

Its yearend statement of financial condition showed the bank with P138 billion in consolidated total assets, P67.8 billion in net loans and receivables, and P104 billion in deposits. Edited by INQUIRER.net

venntro

February 16th, 2009, 06:10 AM

RP loan market activity gathers pace (http://http://www.abs-cbnnews.com/business/02/16/09/rp-loan-market-activity-gathers-pace)
Reuters | 02/16/2009 10:57 AM

Activity in the Philippine loan market has picked up with potential deals for San Miguel Brewery Ltd. and Bangko Sentral ng Pilipinas (BSP) in the pipeline.

San Miguel Brewery has mandated ANZ, Mizuho Corporate Bank and Standard Chartered Bank for a $300-million backstop facility to back its acquisition of the assets, brands, operations, patents, real estate, shares and trademarks of San Miguel Brewing International Ltd. and San Miguel Beverages Inc from its parent San Miguel Corp.

The lead group on the deal, which will likely have a tenor of less than 18 months, may be expanded by two banks, possibly Calyon and DBS Bank.

The loan is a backstop for the borrower's onshore and offshore bond issues of up to $815 million that are expected to be marketed in March. If the borrower fails to raise enough funds from the bonds, the backstop will meet the shortfall in funding.

According to a Reuters news story, the borrower has mandated HSBC and Development Bank of the Philippines for the domestic bond, and Citigroup, Credit Suisse, Deutsche Bank, Royal Bank of Scotland and UBS for the offshore bond. One banker said the offshore bond issue could be too expensive for the borrower though and may eventually be scrapped.

San Miguel Brewery values its parent's beer assets at around $815 million and the acquisition is targeted to complete by April.

San Miguel Corp. would use the proceeds from the sale to fund acquisitions and repay debt.

In October 2008, San Miguel Corp.'s board approved the acquisition of a 27-percent stake in Manila Electric Co. for more than $600 million. The borrower also has an option to buy a 50.1-percent stake in Petron Corp worth around $675 million.

Meanwhile, around seven banks in early February pitched BSP for a $500-million 3-year loan. BSP had been rumoured for a $500-million deal in early January.

The banks that pitched BSP are said to include: ANZ, Bank of Tokyo-Mitsubishi UFJ, ING Bank, Mizuho Corporate Bank, Natixis, StanChart and Sumitomo Mitsui Banking Corp.

However, BSP has not yet given the go-ahead for a loan. If it does, it will still have to go through a formal process of issuing a request for proposals and selecting banks, a banker said.

If the deal materialises, the facility is expected to pay an all-in of around 400bp, which is significantly higher than the borrower's last venture into the loan market.

BSP has been absent from the offshore debt market since 2005 when it raised $500 million via a two-tranche loan. On that deal, a $125 million 3-year tranche and a $375-million 5-year bullet tranche paid all-ins of 160bp and 270bp, respectively.

Moody's Investors Service on February 12 affirmed the positive outlook on the Philippines' B1 foreign and local currency government ratings and the Ba3 country ceiling for its foreign currency bonds and the B1 country ceiling for its foreign currency bank deposits. Moody's had in late-January 2008 changed the rating outlook to positive from stable.

The ratings agency last week said the Philippines had "demonstrated a remarkable degree of resiliency" to the global financial crisis, preserving mprovements made in the last few years in its economic fundamentals.

venntro

February 16th, 2009, 07:29 AM

BSP cuts rediscount rate by 50 bps (http://http://www.abs-cbnnews.com/business/02/16/09/bsp-cuts-rediscount-rate-50-bps)
Reuters | 02/16/2009 12:53 PM

Bangko Sentral ng Pilipinas (BSP) said on Monday it has cut its rediscount rate by 50 basis points and will raise the budget for the lending facility for the second time in four months to spur lending amid the economic slowdown.

The reduction brings the central bank's peso rediscount rate -- the rate at which it lends to commercial banks -- to 5 percent, the same as its key overnight borrowing rate.

The central bank's budget for its rediscounting facility would also increase to P60 billion ($1.27 billion) from P40 billion.

"These changes would provide more liquidity and credit in the banking system to ensure the orderly functioning of financial markets should global financial conditions worsen," the monetary authority said in a statement.

"The liberalised rediscounting guidelines would enable banks to rediscount more loan papers and therefore, have access to additional funds that they can relend to the public."

The changes, approved by the monetary board last week, will take effect on March 2.

The central bank last hiked its budget for its rediscounting facility in November, doubling it from P20 billion, to allow more banks to obtain fresh cash from the central bank using promissory notes or other eligible debt for short-term liquidity needs.

In aligning the peso rediscount rate with the benchmark overnight borrowing rate, central bank Governor Amando Tetangco said: "For more effective monetary policy, all central bank monetary policy instruments should be priced off this policy rate.

The central bank slashed its overnight borrowing rate by a total 100 basis points in December and January and analysts are expecting more cuts to help the Southeast Asian economy cope with the global downturn.

The monetary board also approved an increase in the required ceiling for banks' non-performing loan ratio to 10 percentage points above the industry average from the current ceiling of 2 percentage points to improve access to the rediscounting window.

venntro

February 16th, 2009, 09:55 AM

PDIC unlikely to get P14-billion loan from BSP (http://http://www.gmanews.tv/story/148992/PDIC-unlikely-to-get-P14-B-loan-from-BSP)
02/16/2009 | 03:15 PM

MANILA, Philippines - The Philippine Deposit Insurance Corp is unlikely to get its P14-billion loan from the Bangko Sentral ng Pilipinas unless it could prove it needed to beef up its P61-billion Deposit Insurance Fund (DIF).

The Bangko Sentral ng Pilipinas (BSP) has made no decision on the PDIC's loan request that PDIC president Jose Nograles described as a "business decision."

According to sources at the BSP, the Monetary Board has not made a decision on the loan request and hinted that the PDIC was unlikely to get an approval since it still has a substantial balance on its DIF.

Under the rules, PDIC is allowed to ask the BSP for a loan to beef up its DIF but it is also allowed to issue its own debt instrument to raise the same amount from the commercial market.

Nograles said the PDIC decided to borrow from the BSP because it expected to spend P14 billion to pay the deposit insurance claims of some 135000 depositors of 12 rural banks that has already been shut down by the BSP.

But according to an MB source, all banks pay insurance premium to the PDIC precisely for ensuring that their depositors would be paid off in case of bank failure.

"That means the PDIC has funds precisely for this purpose, and they can use that fund because that's what it is for," the MB source said.

The MB source said the BSP itself was still waiting for the national government to complete its own recapitalization plan amounting to P40 billion as prescribed under the BSP charter.

Because PDIC's DIF is still substantial, the source said PDIC could easily draw from its Fund and pay down the deposit insurance claims right away without difficulties or seriously depleting its DIF.

Nograles said that it would not wait for the central bank to approve its P14-billion loan and start using its own funds to settle the claims of depositors caught up in the collapse of the rural banks.

At the recent Congress hearing on the collapse of the rural banks, Nograles told reporters that the PDIC has so far validated about 35,000 small accounts that could be paid out of the DIF.

In total, the PDIC estimated that it would have to pay out around P14 billion worth of insured deposits below P250,000.

The BSP shut down 12 rural banks closed by the BSP in the last two months as well as a group of banks under the so-called G7 group that were put under receivership early last year for unrelated problems.

Nograles said the PDIC's request for a loan from the BSP was still pending, but he said the company had more than enough to cover the claims of the so-called Legacy Group depositors.

Nograles said the PDIC was prioritizing depositors with accounts of less than P100,000. He said the about 35,000 accounts were already examined and the pay-out of the clean and validated claims would start this week.

PDIC said there were over 130,000 deposit accounts involved in all 12 banks under the Legacy Group and 62 percent of these accounts were deposit accounts with P100,000 and below.

Testifying before the House Committee on Banks, Nograles also asked lawmakers to grant the PDIC the authority to issue its own commercial papers with sovereign guarantee to give it access to cheap funds.

"We can always borrow from the BSP if it would make good business sense to do so but of course it would be good if we had more options," Nograles said.

Nograles said the PDIC had no dire need for the loan from the BSP but the PDIC board decided to request for the loan as a "prudent measure" toward protecting its DIF.

Central bank officials earlier said the depositors of the Legacy Group, in particular, no longer had hope of recovering their deposit and their only recourse was to file claims with the PDIC. - GMANews.TV

venntro

February 17th, 2009, 01:41 AM

BSP liberalizes rediscounting facility (http://http://www.mb.com.ph/BSNS20090217148315.html)
By LEE C. CHIPONGIAN

The Bangko Sentral ng Pilipinas (BSP), in a pre-emptive move to avoid credit tightness, has liberalized its rediscounting facility to allow banks easier access to credit and liquidity from the central bank.

The BSP’s Monetary Board also increased the facility’s reserves from P40 billion to P60 billion to accommodate loan requests by infusing additional liquidity.

In a statement released yesterday, BSP governor Amando M. Tetangco Jr. said the approved changes will take effect on March 2. "The liberalized rediscounting guidelines would enable banks to rediscount more loan papers and therefore have access to additional funds that they can relend to the public," he said.

So far, BSP Deputy Governor Diwa C. Guinigundo said P30 billion of the facility has been tapped. "There is no evidence of credit tightness right now but we do recognize that we are in a more difficult situation (with the global financial crisis) so we need to ensure that banks have greater access to our rediscounting facility."

In addition, the rates for the peso rediscounts were also aligned with the BSP’s overnight reverse repurchase (RRP) rate, less 50 basis points. The RRP rate is the BSP’s main policy lever and, for more effective monetary policy, all BSP monetary policy instruments should be priced off this policy rate.

"Rediscounting is now pegged at BSP overnight rate to lessen the credit costs. Previously, the rate was pegged based on the 91-day Treasury bill. Hopefully, the banks will pass this on (lower costs)," said Guinigundo.

The BSP likewise raised the loan value of all eligible rediscounting papers from 80 percent to 90 percent of the outstanding balance of a borrowing bank’s credit instrument, but not to exceed 70 percent of the appraised value of the underlying collateral.

BSP also revised the rediscounting requirements by adjusting the ceiling of the non performing loan (NPL) ratio requirement to 10 percentage points above the latest available industry average from the current ceiling of two percentage points above the industry average. "This NPL ratio requirement, which is nonetheless still more stringent than the requirement imposed by other government banks, is meant to improve the access to the rediscounting window," said Tetangco.

BSP said in the same statement that other revisions to the rediscounting guidelines include the lifting of the requirement to execute a Surety Agreement (SA) by any single stockholder, natural or juridical, owning more than 50 percent of the voting stocks of a bank with approved rediscounting lines with the BSP; and the imposition of a ceiling on the outstanding papers that a bank may rediscount equal to the rediscounting bank’s single borrower’s limit (25 percent of its net worth) or P3 billion, whichever is lower.

"Right now they are required to submit SA, but there’s no need because we’re already protected by the collaterals that they submit to us," said Guinigundo. "We can now lift this requirement because there’s full collateralization for rediscounting."

BSP said the former is intended to facilitate faster processing of rediscounting loans, while the latter is aimed at providing greater access to as broad a number of banks as possible to the rediscounting facility to help address their liquidity requirements.

The Monetary Board approved the revisions to the facility so that banks with liquidity concerns can tap this mechanism rather than taking out emergency loans.

Guinigundo said the changes in rediscounting is not intended to divert emergency loan requests from banks.

"We wanted to provide banks a way of turning around and liquefying their previous exposure to borrowers. (Although) there are similarities, both facility are collateralized and are for liquidity purposes."

Guinigundo added, "if the bank is not problematic why get an emergency loan? They have the option to go to rediscounting. We don’t want to be restrictive so this is an easier way to access credit. The conditions are now easier to comply with."

Banks applying for emergency loans are limited since the amount applied for should not exceed 50 percent of its outstanding deposits. These loans are collateralized, mostly by real estate.

BSP offers rediscounting, emergency loans and the overnight clearing line to address a bank’s liquidity problems. Since the closure of 15 rural banks in December and January, the BSP found itself dealing with more banks seeking liquidity assistance.

Rediscounting, by central bank definition, is a standing credit facility provided by the BSP to help banks meet temporary liquidity needs by refinancing the loans they extend to their clients. It is a monetary tool to regulate liquidity. BSP said the facility "makes possible the timely delivery of credit to all productive sectors of the economy." BSP offers two types -- peso rediscounting facility and the Exporters’ Dollar and Yen Rediscount Facility.

Emergency loans – a dreaded word by some officials as this would sometimes create a contagion among banks – is a financial assistance extended by the BSP as secured liquidity for the "temporary remedial measure to help solvent banks overcome their liquidity problems arising from causes beyond their control …"

venntro

February 17th, 2009, 04:32 AM

Philippines liberalizes access to rediscounting facilities to boost lending (http://http://www.philstar.com/Article.aspx?articleId=441171&publicationSubCategoryId=200)
Updated February 17, 2009 09:45 AM

MANILA (Xinhua) -- The Philippine central bank BSP said yesterday it has further liberalized access to its rediscounting facilities to boost lending amid a global economic slowdown.

Philippine central bank Governor Amando Tetangco said that the central bank's Monetary Board has increased the peso rediscounting budget to 60 billion pesos (1.27 billion US dollars), up from the current budget of 40 billion pesos (847 million dollars).

The central bank has likewise reduced its rediscount rate by 50 basis points, bringing the peso rediscount rate to 5.0 percent.

"The liberalized rediscounting guidelines would enable banks to rediscount more loan papers and therefore have access to additional funds that they can relend to the public," the Monetary Board said in a statement.

Tetangco said the easing inflation outlook "provides greater room for monetary policy to support the liquidity and credit requirements of the economy."

Monetary officials expect the inflation level this year to ease at 2.5 percent to 4.5 percent on declining fuel and food prices and weak consumption due to the global economic crisis.

They have also approved several measures to ensure liquidity and prevent credit tightness in a weak economic environment. These changes, which were approved by the Monetary Board last week, will be implemented March 2, 2009.

"These changes would provide more liquidity and credit in the banking system to ensure the orderly functioning of financial markets should global financial conditions worsen," the Monetary Board said.

The loan value of all eligible rediscounting papers will increase from 80 percent to 90 percent of the outstanding balance of a borrowing bank's credit instrument, but not to exceed 70 percent of the appraised value of the underlying collateral.

The Monetary Board also raised the ceiling of the non- performing loan (NPL) ratio requirement from the current two percentage points to ten percentage points above industry levels.

"This NPL ratio requirement, which is nonetheless still more stringent than the requirement imposed by other government banks, is meant to improve the access to the rediscounting window," monetary officials said.

venntro

February 17th, 2009, 05:46 AM

Investment houses, others complain over PERA administrator provisions (http://http://www.philstar.com/Article.aspx?articleId=440961&publicationSubCategoryId=74)
By Ted P. Torres Updated February 17, 2009 12:00 AM

MANILA, Philippines - The First Metro Investment Corp. (FMIC) is protesting a plan to disallow non-trust entities such as investment houses, investment company advisors, insurance companies and stock brokerages in participating as administrator and investment manager in the implementation of the Personal Equity and Retirement Account (PERA) Act of 2008.

In a letter to the Philippine Stock Exchange (PSE), FMIC vice chairman of the First Metro Asset Management Inc. Roberto Juanchito T. Dispo likewise objected to implied insinuations that non-trust entities were incapable of handling, managing and avoiding conflicts in relation to assuming the role of administrator and investment manager of PERA funds.

“This is an obvious indictment of our capability and our concern for the safety and interest of our clients. We strongly object to this implied indictment,” Dispo added.

Dispo said that the administrator and investment management of PERA are soles that are similar in nature and function as what they do for their non-PERA clients.

“And records will show that there has not been any reported case of investment losses or anomalies specifically arising from the assumption of both of these roles by the same entity,” he added.

He said that there are many investment company advisers who manage the investment activities of some of the largest and reputable mutual funds, and they certainly have the operational and technical capabilities to support these investment activities.

The PERA Law has not been implemented as the implementing rules and regulations (IRR) are still being formulated, which is the job of the Technical Working Group.

The PERA will establish a legal and regulatory framework for voluntary personal retirement plans, comprised of voluntary personal savings and investments, and promote capital market development and savings mobilization, contribute to long-term fiscal sustainability through long-term financing.

The controversial provision being noted by Dispo is under rule 3.A, regarding the entities qualified to be PERA administrator.

The argument is that non-trust entities can be administrators but that the invesment managers and product provider must obtain a trust license from the Bangko Sentral ng Pilipinas (BSP).

Another provision in the law states that the PERA investment product must be invested solely in the Philippines.

The PERA rule does not expressly state that the PERA investment product must be a domestically registered or licensed product and that the issuer thereof must be a domestic issuer.

According to the members of the working group, it may end up having the concerned regulatory authority to approve or determine specific investment products.

venntro

February 18th, 2009, 03:42 AM

Bank deposits up 13.4% to P2.9 trillion (http://http://www.philstar.com/Article.aspx?articleId=441214&publicationSubCategoryId=66)
By Des Ferriols Updated February 18, 2009 12:00 AM

MANILA, Philippines - Total deposits accumulated by the local banking system rose by 13.4 percent to P2.9 trillion as of end October last year, indicating that deposit liabilities are still the industry’s major source of funding.

Bank regulators said the industry’s “inherent conservatism” and “domestic orientation” allowed the banking sector to weather the global turmoil while still growing its main source of financing.

Regulators said the local banking industry compared significantly better than other countries in the region where bad loans ratios are higher, outperformed only by countries whose governments spent billions to buy up their banks’ bad loans.

According to the BSP, the increase in bank deposits was fueled mainly by the rise in demand and time deposits although the central bank said there was a decline in savings deposits, which accounted for almost half of the funding base.

The BSP said these numbers indicate that depositors still prefer the more traditional financial products and that banks get the bulk of their funds from accumulated savings.

As savings rose, the BSP said the total resources of the banking system rose by 13.9 percent to P5.7 trillion as of end-October 2008 from the 2007 level of P5 trillion.

The increase was due mainly to the rise in the cash and loans accounts, with universal and commercial banks accounting for almost 90 percent of the total resources of the banking system.

“The Philippine banking industry continued to be stable, well capitalized, and highly liquid during the last quarter of the year,” the BSP said in its quarterly inflation report.

According to the BSP, the banking industry’s inherent conservatism and the domestic orientation have helped keep Philippine banks’ exposure to the global financial turmoil to a limited extent.

Moreover, the BSP said Philippine banks continue to be capitalized above the Bank for International Settlements (BIS) standard and the BSP regulatory requirement, with bank balance sheets at their strongest since the 1997 Asian financial crisis.

On the other hand, the BSP said the banking system’s asset quality continued to improve as the non-performing loan (NPL) ratio eased further to 4.5 percent as of end-October 2008 compared to 5.7 percent a year ago.

The BSP said compared with other countries in the region, the Philippine banking system’s NPL ratio was lower than Thailand’s 6.1 percent but higher than Indonesia’s 3.9 percent, Malaysia’s 2.4 percent, and South Korea’s 0.6 percent.

The lower NPL ratios in Malaysia and South Korea, however, resulted from the creation of publicly-owned asset management companies (AMCs), which purchased the bulk of their NPLs.

In contrast, the BSP said the Philippine banking industry managed to pare down its NPL ratio by selling off their bad loans to private asset managers with only minimal incentives and no cash assistance from the government.

venntro

February 19th, 2009, 02:07 AM

Bank lending slows down at end-2008 (http://http://www.philstar.com/Article.aspx?articleId=441459&publicationSubCategoryId=66)
By Des Ferriols Updated February 19, 2009 12:00 AM

MANILA, Philippines - As banks grew increasingly wary about lending in the midst of a global economic downturn, the expansion in lending activities slowed down at the end of 2008.

Data from the Bangko Sentral ng Pilipinas (BSP) indicated that bank lending continued to increase in December, albeit slower, expanding by 17.5 percent including placements with the BSP.

The BSP reported that the outstanding loans of commercial banks including reverse repurchase agreements or RRPs increased in December by 17.5 percent year-on-year.

Excluding banks’ RRP placements with the BSP, bank lending actually grew faster by 20.5 percent.

These growth rates were, however lower than those recorded a month earlier.

The BSP reported that loans for production activities drove the expansion in bank lending, growing by 18.3 percent in December.

The December growth rate was negligibly lower than the 18.4-percent expansion posted in November 2008.

The BSP said lending to agriculture, hunting, and forestry grew by 53 percent while lending to real estate, renting, and business services expanded by 30.2 percent.

On the other hand, bank lending to wholesale and retail trade grew by 27.9 percent; and transportation, storage and communication increased by 45.9 percent.

But the BSP said lending to the financial intermediation sector contracted by 14.9 percent, as did lending to the fishing and mining sectors.

Consumption loans on the other hand grew by 13.4 percent in December from 20.6 percent in November. The BSP said the growth came mostly from credit card receivables which expanded by 20.5 percent from 23.3 percent in the previous month.

Auto loans also rose by 10.5 percent from 12.6 percent in the previous month. Meanwhile, loans for other household consumption fell by 16.3 percent from a growth of 22 percent in November.

“We keep a close watch on bank lending trends to generate an advance indicator on the direction of future economic activity,” said BSP Governor Amando M. Tetangco Jr. “The BSP’s monetary easing moves in previous months are expected to support credit growth in the months ahead to help alleviate the effects of the global financial crisis on the domestic economy.”

Tetangco said the BSP expects bank lending to continue growing in 2009 although admitted there would be some slow down as bank regulators saw initial signs that banks are tightening their credit standards.

Tetangco said this was a natural reaction to the crisis which had banks freezing credit in major economies. In the Philippines, Tetangco said the reaction was not quite so extreme but he said tightening of credit standards was the prudent thing to do.

“The only thing we want to ensure is that even if banks tightened their standards for lending, the actual cost of money would not go up since we are providing liquidity and making it cheaper by cutting our interest rates,” he said.

The BSP data for December were obtained from the new system of bank reporting under the Financial Reporting Package (FRP). This system replaced the Consolidated Statement of Condition (CSOC) reports.

The FRP adopts the detailed classification of the amended 1994 Philippine Standard Industrial Classification (PSIC) for international comparability. The FRP also classifies lending by production activities (which covers 16 economic sectors) and by household consumption purposes (with three economic categories).

Bank reports previously classified loans into only nine economic sectors.

tonight

February 20th, 2009, 03:35 AM

^^
affected by global crisis :ohno:

tonight

February 20th, 2009, 03:37 AM

Metrobank drops bid for Philamlife (http://business.inquirer.net/money/topstories/view/20090215-189488/Metrobank-drops-bid-for-Philamlife)

Banco de Oro, BPI still in the race

MANILA, Philippines—Local banking giant Metropolitan Bank & Trust Co., the banking arm of taipan George Ty, has bowed out of the race to acquire the American International Group’s local crown jewel Philippine American Life and General Insurance Co.

With Metrobank out of the race, four groups are still in the running and have been given access to pertinent Philamlife database and management presentations, sources in the banking industry said.

Access to Philamlife’s database ended on Friday ahead of a Feb. 23 deadline set for suitors to submit the final binding proposal.

Those still in the race include Metrobank’s toughest rivals Banco de Oro Unibank and Bank of the Philippine Islands as well as Toronto-based global insurance player Manulife Financial Corp. There is a fourth unidentified group that is eligible to bid and has had access to data needed for a due-diligence audit, industry sources said.

Asked for an official word on whether Metrobank was joining the Feb. 23 bidding, a bank spokesperson replied to the Inquirer Friday night: “We will not participate, there’s a change of direction.”

Other banking sources said Metrobank was not able to firm up an agreement with its bancassurance partner, Paris-based AXA group, on what was originally planned to be a joint bid for Philamlife. Metrobank and AXA were previously keen on joining the bidding with a 55-45 sharing arrangement favoring Metrobank.

BDO, now the country’s biggest bank, will bid for Philamlife in partnership with Generali Pilipinas.

BDO will have a 40-percent share while Generali will take 60 percent. The portion of Generali will include its parent company Generali Assuzaccione of Italy, Kuok group and Jerneh Asia Berhad.

The Inquirer earlier reported that the Ayalas’ Bank of the Philippine Islands would team up with British insurance giant Prudential Plc, although the sharing arrangement is not known.

Winston Garcia, president of the state-owned Government Service Insurance System, had said that to make it to the shortlist of eligible bidders, an initial offer not lower than P36 billion must be submitted. GSIS had dropped out of the race early on because Garcia believed that the estimated book value was too high.

Some bankers said that as a rule of the thumb, profitable companies put up for sale can fetch a price equivalent to twice the book value.

After selling its consumer finance units bundled into AIG Philam Saving Bank to property magnate Andrew Gotianun’s East West Bank for a little over P2 billion last month, AIG is selling its remaining Philippine assets as a single block.

bledzoe

February 20th, 2009, 05:04 AM

http://businessmirror.com.ph/index.php?option=com_content&view=article&id=6337:uk-based-barclays-opens-office-in-manila&catid=25:bankingandfinance&Itemid=61

UK-based Barclays opens office in Manila

Banking & Finance
Written by Erik de la Cruz / Reporter
Thursday, 19 February 2009 20:49

UK-BASED global bank Barclays is strengthening its presence in the Philippines by opening a local representative office and expanding its corporate social responsibility (CSR) program to cover the poor communities in Pasay City and Masbate province.

Barclays chairman Marcus Agius, who was in the country for a three-day visit together with other senior bank officials, announced on Thursday the establishment of a representative office and the bank’s CSR activities in the country.

“Just two weeks ago we opened a representative office in Manila and that’s going to be an important indication of our intention to do more business in the Philippines,” Agius told reporters.

Barclays’s decision to establish a local office, he said, is based on the company’s long-term view of the global economic conditions.

Opening a Manila office, which will be focusing on investment banking, is part of the bank’s overall goal of growing its business in Asia, said Barclays Capital vice chairman Sir David Wright.

Asia was the fastest-growing region for Barclays Capital, the investment banking division of Barclays, in 2007 with income from the region more than doubling from 2006.

In recent months, Barclays continued to invest and grow in Asia across both products and platforms, the officials said.

Barclays also operates in Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Pakistan, Singapore, Taiwan and Thailand.

Wright said Barclays’s operations in Asia also cover asset management under Barclays Global Investors, and wealth management under Barclays Wealth.

Wright said: “As we go forward in the business, we also want to go forward in terms of demonstrating that we have wider interests and wider responsibilities in the social sector.”

The Philippines is one of the 13 countries covered by the Barclays-Unicef partnership, which forms part of Barclays wider five-year, $150-million flagship community investment program called “Banking on Brighter Futures.”

The other 12 countries are Kenya, India, Egypt, Botswana, Mexico, Pakistan, Russia, Zambia, China, the UK, Nigeria and Brazil.

Barclays’s Banking on Brighter Futures program covers 1,500 projects around the world. In 2007 the bank invested £52.4 million in community projects around the world.

In November 2008 Barclays and the United Nations Childrens Fund (Unicef) announced a new global community investment partnership called “Building Young Futures” worth £5 million.

Barclays and Unicef have made the Philippines part of this program, particularly the poor communities in Pasay and Masbate.

Vanessa Tobin, Unicef representative in Manila, said the partnership will complement a “conditional cash-transfer program” initiated and managed by the Philippine government in the two areas.

This program will target 3,000 households in Pasay and 23,637 households in Masbate for a maximum period of five years.

Under the program, every household may have a maximum of three beneficiaries aged up to 14 years and is provided with a monthly cash grant on the condition that their children get regular preventive health services, attend school and mothers get prenatal and postnatal care and attend parental training sessions.

Tobin said Unicef activities will complement this scheme by providing additional livelihood-skills training to the families to ensure that they can sustain their children’s health and education needs when the cash grant stops.

Agius said Barclays has allotted £250,000 for the program in the Philippines.

venntro

February 23rd, 2009, 02:33 AM

BSP denies P14-billion PDIC loan request (http://http://www.philstar.com/Article.aspx?articleId=442607&publicationSubCategoryId=66)
By Des Ferriols Updated February 23, 2009 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has denied the P14-billion loan request of the Philippine Deposit Insurance Corp., saying that the Deposit insurance fund (DIF) was robust enough.

BSP sources told reporters over the weekend that the loan application was not approved by the Monetary Board after deciding that PDIC’s DIF was sufficient.

Under the rules, PDIC is allowed to ask the BSP for a loan to beef up its DIF. But it is also allowed to issue its own debt instrument to raise the same amount from the commercial market.

“The DIF is more than enough to cover the currently pending deposit insurance claim,” the BSP source said. “Moreover, not all that P14-billion claim will be validated.”

PDIC president Jose Nograles said they decided to borrow from the BSP because it expected to spend P14 billion to pay the deposit insurance claims of some 135000 depositors of 12 rural banks that were shut down by the BSP.

But according to an MB source, all banks pay insurance premium to the PDIC precisely for the purpose of ensuring that their depositors would be paid off in case of bank failure.

“That means the PDIC has funds precisely for this purpose, they can use that fund because that’s what it is for,” the MB source said.

The MB source said the BSP itself was still waiting for the National Government to complete its own recapitalization plan amounting to P40 billion as prescribed under the BSP charter.

Because PDIC’s DIF is still substantial, the source said PDIC could easily draw from its fund and pay the deposit insurance claims right away without difficulty or seriously depleting its DIF.

Nograles said as much earlier, saying that it would not wait for the central bank to approve its P14-billion loan and start using its own funds to settle the claims of depositors caught up in the collapse of the rural banks.

At the recent congressional hearing on the collapse of the rural banks, Nograles told reporters that the PDIC has so far validated about 3,5000 small accounts that could be paid out of the DIF.

The PDIC estimates it would have to pay out around P14 billion worth of insured deposits below P250,000.

The BSP shut down 12 rural banks over the last two months as well as a group of banks under the so-called G7 group that were put under receivership early last year for unrelated problems.

Nograles said the PDIC’s request for a loan from the BSP is still pending but he said the company had more than enough to over the claims of the so-called Legacy Group depositors.

Nograles said the PDIC is now prioritizing depositors with accounts of less than P100000. He said the about 35,000 accounts were already examined and the payout of the clean and validated claims would start this week.

PDIC said there were over 130,000 deposit accounts involved in all 12 banks under the Legacy Group and 62 percent of these accounts were deposit accounts with P100,000 and below.

Testifying before the House committee on banks, Nograles also asked lawmakers to grant the PDIC the authority to issue its own commercial papers with a sovereign guarantee to give it access to cheap funds.

“We can always borrow from the BSP if it would make good business sense to do so, but of course it would be good if we had more options,” Nograles said.

He said the PDIC is not in dire need of the loan from the BSP but the PDIC board decided to request for the loan as a “prudent measure” toward protecting its DIF.

Central bank officials earlier said the depositors of the Legacy Group, in particular, no longer had hope of recovering their deposits and their only recourse was to file claims with PDIC

tonight

February 23rd, 2009, 07:52 AM

DoF seeks to collect P16-billion dividend underpayment from BSP (http://www.mb.com.ph/BSNS20090223148784.html)

The Department of Finance (DoF) has affirmed the Commission on Audit’s (CoA) report that the Bangko Sentral ng Pilipinas (BSP) has understated its dividend payments to the National Government by P16 billion over a spread of years.

This information was contained in a letter that the DoF sent to BSP, according to sources. The government wants to collect this amount as soon as possible as it needs all the cash it could get to fund state social services projects.

The DoF has started talks with the BSP as far back as 2005 on how they could collect the rest of the mandatory dividend remittances. COA first reported BSP’s understated dividends in 2004.

Based on Republic Act 7654 or the New Central Bank Act, the BSP remits 75 percent of its net profits to a sinking fund until such time as the net liabilities of the old central bank will have been liquidated or to the NG as dividends with the remaining 25 percent as residual BSP surplus.

In the latest COA report auditing BSP’s 2007 financial statement released only last week, it said that there remains a pending issue on the basis of the distribution of BSP net income as per its charter.

According to COA, which did not mention the P16 billion, the BSP maintains its position that to promote adequate performance of its responsibilities and ensure viable operation, the BSP has authority to maintain reserves as necessary and consistent therewith (and) may exclude such reserves when calculating its net profit for purposes of distributing net income to NG as dividends.

The report did not include what the COA thinks about the BSP’s explanation about the alleged understatement of dividend payments to NG.

DOF Secretary Margarito B. Teves said in January that discussions have been resumed after more than a year’s postponement.

"We’re part of a family in a way so we need to discuss this," he said. "First of all, we want to find out from them how much they can handle. We have to have an agreement on the figure first." The amount covers the dividend payments from 2003 to 2006.

The BSP did not deposit dividends for 2007 after incurring net loss of P87 billion for that year. For 2008, the central bank is expected to resume payments after reversing income, which as of end-September was a net gain of P3.68 billion.

The BSP as a government owned and controlled corporation (GOCC), although independent, remits higher dividends of 75 percent of its yearly income compared to others GOCCs’ 50 percent.

The last time the BSP deposited dividends was in 2006 in the amount of P4 billion in cash and real estate.

Since 1993, the BSP has remitted P105.9 billion to the NG as P47.9 billion dividends; P40.7 billion in total taxes from its operations; and P17.3 billion as rebates.

The BSP is still discussing with the DOF how it would get its P40-billion capitalization from the NG. Under the law the BSP should have been capitalized with P50 billion but the government only disbursed P10 billion in 1995.

Sources said the BSP and DOF are considering a new scheme on how to raise this amount, including direct NG capital infusion and if congress rejects this plan, the DOF will issue sovereign bonds.

A new memorandum of agreement will replace the previous two and discussions now include the dividend payments.

tonight

February 23rd, 2009, 07:55 AM

Gov't studying changes to '09 revenue targets (http://abs-cbnnews.com/business/02/22/09/govt-studying-changes-09-revenue-targets)

Revenue targets may be added to the list of assumptions up for downward revisions as the global downturn takes its toll on the economy.

A senior Finance department official who requested anonymity said the change was necessary. A tax bureau chief said the agency had no knowledge of the move, but added that a lower goal would be welcome.

Revisions to the government's macroeconomic goals are expected to be announced on Wednesday during an economic managers' briefing.

The interagency Development Budget Coordination Committee met last Friday to discuss possible changes. Budget Undersecretary Laura B. Pascua that day said the inflation goal would be lowered while the deficit cap would be raised.

Asked if the Bureau of Internal Revenue (BIR) had sought lower revenue targets, deputy commissioner Nelson M. Aspe said "If you will ask us, we would welcome that ... it is probable but it is not for me to say if it has been set."

Lowering the BIR's collection goal, he said, was advisable since the global economic crisis has led to reduced business activity and therefore reduced tax collections.

The BIR is the government's main revenue-generating agency, followed by the Bureau of Customs (BoC) whose officials were not immediately available for comment.

The Finance official said forecasts on oil prices, interest rates, foreign exchange, and exports and imports would have to be taken into account in determining the new targets.

Last November, the government slashed the BIR's revenue target for this year to P910.9 billion from P968 billion, citing the expected impact of the global financial crisis and a tax relief measure for workers.

The BoC's target, however, was raised to P317 billion from P300 billion due to expectations of more imports and a weaker peso.

Last week, BIR's Mr. Aspe said the agency's regional offices were finding it hard to meet their targets due to slower economic activity, lower demand, and job losses.

Customs Commissioner Napoleon L. Morales, for his part, has cited the need to adjust revenue goals as imports are expected to weaken.

tonight

February 23rd, 2009, 10:01 AM

Debt yields seen higher on budget gap (http://business.inquirer.net/money/topstories/view/20090223-190543/Debt-yields-seen-higher-on-budget-gap)

MANILA, Philippines – Debt yields are likely to push higher this week on expectations of more government borrowings due to a wider-than-expected budget deficit in 2009, traders said Monday.

Yields on short-to-medium dated securities are expected to move up 20 basis points, while yields on longer tenors would probably edge 10 basis points higher during the week as banks prepare for fresh government issues, traders said.

"The revenue targets this year look unattainable given the present economic conditions and that would translate to higher borrowings and therefore more (debt) issues," said a trader from a local bank.

"We are seeing some selling because investors would like to create more space just in case the government ups its borrowings requirements for the year."

The government is looking at revising its 2009 budget deficit ceiling upwards to around P160 billion ($3.3 billion) or 2.0 percent of gross domestic product, from an earlier estimate of P102 billion, officials have said.

The budget deficit forecast is part of an ongoing review of the country's macroeconomic and fiscal assumptions this year, and the updated policy estimates will be announced during an economic briefing on Wednesday.

The government's budget performance data for 2008 and January 2009 will be announced on the same day.

"There will have to be a corresponding increase in borrowings if the 2009 budget deficit goal will be adjusted," National Treasurer Roberto Tan said.

An auction of 91-day, 182-day and 364-day treasury bills on Monday is expected to attract slightly lower bids due to healthy demand.

The three-month paper is seen to fetch an average rate of 4.5 percent, lower than bids in the secondary market of 4.6 percent.

The six months paper and one-year papers are likely to attract an average rate of 4.75 percent and 5.0 percent.

tonight

February 23rd, 2009, 10:22 AM

Solons bicker over summoning judges (http://newsinfo.inquirer.net/breakingnews/nation/view/20090223-190528/Solons-bicker-over-summoning-judges)

MANILA, Philippines – Lawmakers at the House of Representatives engaged in debate at Monday’s resumption of the inquiry on the closure of rural banks over a motion to summon judges to the committee hearing.

Cagayan de Oro Representative Rufus Rodriguez inquired before Manila Representative Jaime Lopez, chairman of the committee on banks and financial intermediaries, why three appellate court justices and a Manila regional trial court judge were not invited.

In the previous hearing, Rodriguez said he wanted Manila regional trial court Judge Nina Antonio-Valenzuela and Court of Appeals Justice Apolinario Bruselas to explain why they issued a temporary restraining order against the Bangko Sentral ng Pilipinas that was then seeking to sanction the rural banks of the Legacy group, which allowed Legacy to get between P800 million and P1 billion more in fund placements from investors and depositors.

Rodriguez said the two magistrates violated Section 25 of the New Central Bank Act of 1993, which gave the BSP the powers to immediately act on banks facing insolvency.

Rodriguez's motion to invite the magistrates was approved in the last hearing.

But Lopez said that while he signed the invitation letter, they have not yet been sent.

Albay Representative Edcel Lagman made a motion to formally reconsider the invitation to the magistrates, saying that it is the Supreme Court, not the committee that has supervision over members of the judiciary.

Lagman added that "the correctness or error" in the magistrates' decision "were reflected in their decisions, the decisions will speak for themselves."

"There is no need for us to invite them to explain their decision," he said.

Lagman also said that calling the members of the judiciary would not be in aid of legislation "because Congress of this committee has no competence or jurisdiction to enact a law proscribing how judges should adjudicate decisions."

Camarines Sur Representative Luis Villafuerte supported Lagman's view and challenged Rodriguez to make true his statement that he would file administrative complaints against the justices and the judge.

Nueva Vizcaya Representative Carlos Padilla came to Rodriguez's defense, saying that the motion has been approved by the committee in the last hearing and should be implemented.

While Padilla acknowledges the separation of powers among branches of government, he said legislation was a prerogative of Congress and "for purposes of legislation, we should be benefited form the views coming from various sectors, including those from the judiciary."

He added that there were also instances when members of Congress were called by the Supreme Court when a law was under question.

Parañaque Representative Roilo Golez said he would support Rodriguez's position if he could ensure that the magistrates would not be asked queries "that would in any manner traverse their decision, . . . an area that we could not touch."

The committee decided to defer discussion on the issue until the end of the hearing to be able to proceed with questioning of the guests, including Legacy Group owner Celso Delos Angeles, Bangko Sentral ng Pilipinas officials, Philippine Deposit Insurance Corp. officials, and representatives of the Securities and Exchange Commission.

tonight

February 23rd, 2009, 10:43 AM

Economy to grow 4% in 2009 -- Recto (http://business.inquirer.net/money/breakingnews/view/20090223-190583/Economy-to-grow-4-in-2009----Recto)

MANILA, Philippines -- The Philippine economy is expected to expand about 4.0 percent this year based on current indicators, the socio-economic planning chief said Monday.

"There is a bias that we will still grow by 4.0 percent," Ralph Recto told reporters, adding agriculture and services would support growth this year.

The government would likely maintain the low end and downgrade the high end of its current growth forecast of 3.7 to 4.7 percent this year, Recto said.

tonight

February 25th, 2009, 10:21 AM

Legacy owner blames BSP for collapse of empire (http://abs-cbnnews.com/business/02/23/09/legacy-owner-blames-bsp-collapse-empire)

It's the regulators fault that the Legacy Group's businesses collapsed, controversial owner of the embattled and bankrupt financial services group said in an exclusive TV interview.

Celso de los Angeles, in a two-part interview with ABS-CBN News Channel's "Big Picture," said that if the Bangko Sentral ng Pilipinas (BSP) did not intevene, his business would still be running smoothly.

The Legacy Group's collapse, now considered a coordinated and one of the major pyramid scams in the country's financial services history, has left thousands of depositors all over the country scrambling to recover their P24 billion funds in the bankrupt 14 Legacy-linked rural banks.

Taxpayers have to shoulder P14 billion of that amount through the state-funded Philippine Deposit Insurance Corporation, which is mandated by law to cover deposits amounting to P250,000 and below.

In a domino-effect, even the Legacy-linked pre-need firms' thousands of plan holders, who invested about P7 billion for their future educational, pension and memorial needs, are also left holding the bag.

The Legacy-linked rural banks and pre-need firms closed shop one-by-one in December and January, after the Bangko Sentral clinched a favorable restraining order from the Supreme Court that allowed the central bank to go after the 14 identified Legacy-linked rural banks.

The BSP has unraveled fraudulent and unsound business practices in the way the Legacy Group's rural banks were conducting business through its special examination team. In early 2008, the BSP was about to submit the team's examination findings and recommendations to its policy making body, the Monetary Board, but the Legacy Group beat it to the draw when it filed court cases against the regulator, in effect buying time for the rural banks to continue operations. (Read how the lower courts handled the Legacy court cases here.)

Fraud is 'relative'

The BSP has said that the Legacy Group's fall was due to fraud. It said the group promised high interest rates to depositors and investors, including double-your-money schemes, sustained by using fresh funds from new investors to pay off maturing obligations to clients.

In the "Big Picture" interview, de los Angeles said the high interest rates his group promised to depositors and investors should not be considered as "unsound business practice" since they had a business plan to back these promises.

De los Angeles said the concept of unsound business practice, or promising high yields to clients, does not apply to them. "It's relative," he stressed.

"It is unsound if we have no outlet for [these sources of money. But we had a business plan," he said.

The mayor of a town in Albay province said that after the public entrusts their money to them, they turn around and invest these in other businesses, which give them returns higher than the promised rates to the depositors and pre-need plan holders.

These outlets include loans to teachers and motorcyle buyers, and to credit card clients.

"We lend to teachers at 36 percent [per year, which is] higher than the 14.7 percent cost of money. Our credit cards earn 42 percent, higher than the [deposit and investment products where we promise] 20 percent [per year] or double-your-money. Our motorcycle [loans] earn 37 percent [and more]," de los Angeles explained.

As long as these outlets continue earning these high returns, the politician-businessman noted that the entire empire would have continued to operate smoothly.

But Legacy's access to these profitable outlets started being closed one after another. The late Raul Roco, who then headed the Education Department, disallowed the practice of businesses like Legacy from earning high rates out of state teachers' salary loans. Roco, who then said these loans rates are considered "usury," imposed that rates charged to teachers loans be reduced to 18 percent from 36 percent.

Policy decisions like the education department's started distorting the flow of money within the empire. The BSP's efforts to close the banks didn't help any.

De los Angeles likened these regulator's efforts to closing the faucets it considered the fund sources that helped pay back the depositors and pre-need holders.

"If you close the faucet, how will we pay [the depositors and pre-need plan holders back]?"

BSP official's ire

De los Angeles also said a former top BSP official was behind the efforts of the regulator to close the rural banks.

The Legacy Group owner said former BSP deputy governor Alberto Reyes wanted to close his banks because he wanted Reyes' brother, Efren Reyes, to pay his loans to the Legacy companies.

De los Angeles said Efren Reyes, who used to head one of his rural banks, availed of P1.4 million in loans.

"It's pure and simple harassment," de los Angeles said of the former BSP deputy official's moves against his banks. "I'm referring not to the insitution but to certain individuals [in the BSP]," he added.

In a statement, former BSP deputy government Reyes said he was aware of his brother Efren's connection with the Legacy Group, which the BSP has been keeping a watchful eye on since early part of the decade.

Reyes said his brother's involvment in Legacy was "a purely professional service work," and that it had "nothing to do with the closure of Legacy by BSP."

“We at BSP continued documenting unsafe and unsound banking practices of the Legacy Banks," Reyes added.

The finances of the Legacy group has been in limbo since 2003. The BSP had asked the Legacy group to infuse fresh funds to ensure it had enough cushion for the depositors' money. The BSP later learned that the group was dependent on additional money from new and existing customers to pay off maturing obligations to other clients since the banks themselves are already cash-strapped.

The Legacy Group has been criticized for banking on connections in politics, judiciary, and in regulators to continue with their financial services operations.

tonight

February 25th, 2009, 10:28 AM

BSP says to consider easing policy (http://abs-cbnnews.com/business/02/25/09/bsp-says-consider-easing-policy)

The Bangko Sentral ng Pilipinas (BSP) will look to further ease monetary policy to bolster economic growth, Governor Amando Tetangco said on Wednesday.

"We will consider opportunities to further ease monetary policy to help stimulate growth," he told a business forum attended by the country's economic managers.

"Inflation will continue to decelerate and fall within target in 2009 and 2010," Tetangco added.

"Monetary policy remains flexible," he said, adding the central bank "has room to act pre-emptively."

The BSP holds its next rate-setting meeting on March 5. It has cut policy rates by a total of 100 basis points at its last two meetings.

Tetangco also said foreign exchange reserves at the end of the year should be between $37.5-$38.5 billion.

tonight

February 25th, 2009, 12:26 PM

Central bank to consider easing policy (http://business.inquirer.net/money/breakingnews/view/20090225-190922/Central-bank-to-consider-easing-policy)

MANILA, Philippines - The Bangko Sentral ng Pilipinas, the country's central bank, said it would look to further easing monetary policy to bolster economic growth, governor Amando Tetangco said Wednesday.

"We will consider opportunities to further ease monetary policy to help stimulate growth," he told a business forum attended by the country's economic managers.

"Inflation will continue to decelerate and fall within target in 2009 and 2010," Tetangco added.

"Monetary policy remains flexible," he said, adding the central bank "has room to act pre-emptively."

The central bank holds its next rate-setting meeting on March 5. It has cut policy rates by a total of 100 basis points at its last two meetings.

Tetangco also said foreign exchange reserves at the end of the year should range between $37.5 billion to $38.5 billion.

venntro

February 26th, 2009, 02:22 AM

^^ The anticipated lower inflation figures for 2009 will give the BSP more room to lower interest rates.

venntro

February 26th, 2009, 02:23 AM

Bangko Sentral trims foreign exchange reserves target to $37.5B in 2009 (http://http://www.philstar.com/Article.aspx?articleId=443521&publicationSubCategoryId=66)
By Des Ferriols Updated February 26, 2009 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has downscaled its 2009 projection for the country’s foreign exchange reserves from $39 billion to at least $37.5 billion as the growth in remittances grinds to a halt this year due to job losses abroad.

The government also revised its projected balance of payments (BOP) position from $500 million to $700 million, mainly because of lower oil prices.

BOP is the balance after deducting all external payments for debt servicing and imports, from the gross international reserves (GIR) or the sum of all foreign exchange flowing into the country.

The BSP said remittances from overseas Filipinos will reach $16.4 billion this year, same as in 2008 —marking the first time that remittances would not expand since the country stated exporting workers.

The BSP had earlier projected that remittances would expand by six to nine percent but central bank Governor Amando M. Tetangco Jr. revealed yesterday that the projection needed to be adjusted as major economies start to contract this year.

Tetangco said the revision has been approved by the Development Budget Coordinating Committee (DBCC), pegging the growth rate at zero.

“There is a very real danger that the global economy would weaken more and the Philippines has to face this,” Tetangco said. “We might be an island of calm but we are at risk of a negative feedback loop if credit markets freeze up and economic activities grind to a halt.”

With weakening inflows, Tetangco said the gross international reserves would be $37.5 billion to $38.5 billion, slightly lower than earlier projections which placed the expected level at $39 to $40-billion for this year.

Tetangco said the country’s relatively robust external position would allow the economy to tolerate inflationary pressures while supporting a sustainable growth trajectory that would lead to a 3.7-to 4.4-percent expansion in gross domestic product.

The BOP is keenly watched by both credit rating agencies and investors since it is one of the major determinants of the country’s ability to continue servicing its external debt and other payments.

The BSP had originally projected that the BOP surplus would reach $2.3 billion but the slowdown in exports, remittances, investments and other inflows would weigh down the reserves, offsetting the relief from lower oil prices.

Tetangco said weakening imports would ease some pressure on the country’s reserves since global demand is expected to fall even more dramatically this year.

As global consumption slows down, the country’s import-dependent exports would also weaken and this would hit the BOP from two opposing sides: on the one hand, there would be less dollar outflows paying for imported components and on the other, there would be less inflows from exports.

In January, the BSP reported that the BOP surplus rose to $1.735 billion as the National Government deposited the proceeds of its $1.5-billion commercial borrowing in January.

The country’s GIR level reached $39.6 billion at the end of January, rising by $2 billion from the end-2008 level as government borrowing boosted reserves.

With oil prices drastically down and imports also softening up, the BOP surplus was significantly larger than the January 2007 surplus of $259 million and the second highest surplus level since 2004.

tonight

February 27th, 2009, 03:54 AM

GOCCs remit P6.79 B in dividends (http://www.mb.com.ph/BSNS20090227149142.html)

The Department of Finance (DoF) collected P6.79 billion in total dividends from government- owned and -controlled corporations (GOCCs) and government financial institutions (GFIs) for the full-year 2008, exceeding the target of P4 billion.

The dividends collected were 65 percent lower compared to what was collected in 2007 of over P19 billion.

Under Republic Act 7656, GOCCs must remit 50 percent of their income to the National Government.

Finance undersecretary Jeremias N. Paul said the largest of the dividend payments came from Philippine National Oil Co. of P2.1 billion. The two other major contributors were the Philippine Ports Authority with P1.8 billion and Development Bank of the Philippines with P1 billion.

For 2008, the Department of Finance (DoF) has programmed P21 billion as dividends, guarantee fees and advances from GOCCs and GFIs.

For the month of December, total dividends remitted to the Bureau of the Treasury amounted to P1.4 billion.

The DoF has asked all GOCCs to advance their 2008 dividend payments, however, DoF officials said some were requesting exemptions citing slow business as reasons.

The Bangko Sentral ng Pilipinas (BSP), which did not remit dividends for 2007 since it incurred losses of P87 billion for that period, is expected to release a big amount for 2008.

tonight

February 28th, 2009, 04:49 AM

NG debt-to-GDP ratio to decline in 2009 (http://www.mb.com.ph/BSNS20090228149197.html)
By LEE C. CHIPONGIAN

Government outstanding debt exceeded the program in 2008, rising to 56.3 percent of gross domestic product (GDP) when the ceiling was 50.7 percent, data from the Department of Finance (DoF) show.

In nominal terms, the latest total debt figure was P4.22 trillion, higher than program of P3.85 trillion. This means that every Flipino, all 88.5 million as of 2007, have debts amounting to P47,645.92.

For 2009, DoF said national debt vis-à-vis the GDP is expected to decline to 54.8 percent but in actual value this will be higher at P4.41 trillion.

In the same data presented by DoF Secretary Margarito B. Teves during the bi-annual government economic briefing in Makati with other economic managers, total debt serving last year was lower compared to program or P612.7 billion (8.2 percent of GDP) versus P636.1 billion (8.4 percent of GDP). For this year, the program is P798.5 billion or 8.7 percent of GDP.

Of total debt service, interest expense in 2008 was lower at P272.2 billion (3.6 percent of GDP) against the program of P290.1 billion (3.8 percent of GDP). The DOF said for 2009, the expected interest expense is P309.7 billion or 3.9 percent of GDP.

As for the government principal payments last year, the DOF this amount was lower at P340.5 billion (4.5 percent of GDP) compared to the ceiling of P346 billion (4.6 percent of GDP). This year, the expected principal payments are P388.8 billion or 4.8 percent of GDP.

The DOF was using a GDP value of P7.592 trillion for the old 2008 program, P7.497 trillion for the actual numbers and P8.05 trillion for 2009.

Domestic debt was about P1.83 trillion of total while foreign debt was P2.4 trillion.

Of the total outstanding debt, about 43 percent is owed to foreign creditors and 57 percent to domestic creditors.

The latest outstanding debt reported by the Bureau of the Treasury was November and based on this report, of the total domestic debt, about P2.4 trillion were direct loans, of which P2.38 trillion were government securities and only P2.3 trillion were assumed loans.

As for foreign debt, P796.4 billion are direct loans, of which P724.1 billion are availed of by different state agencies and P72.3 billion are relent to government owned and controlled corporations.

Foreign-denominated loans total slightly over P1 trillion as of November. Loans in US dollar notes amount to P937.7 billion, P72.4 billion were in Euro bonds and P25.6 billion are in Japanese bonds.

venntro

March 2nd, 2009, 03:21 AM

Metrobank inks remittance pact with New York bank (http://http://www.philstar.com/Article.aspx?articleId=444693&publicationSubCategoryId=66)
By Ted P. Torres Updated March 02, 2009 12:00 AM

MANILA, Philippines - The Metropolitan Bank and Trust Co. (Metrobank) has expanded its reach to overseas Filipinos, especially those residing in the United States, with an agreement with the Bank of New York Mellon (BNYM) for a retail remittance program.

Called Remit Worldwide, BNYM can receive remittances from Filipinos based in the US for beneficiaries in the Philippines. The New York-based bank will then electronically-forward the same to Metrobank for distribution to various branches near the beneficiaries.

The agreement allows BNYM to receive remittances for credit to Metrobank accounts, cash pick-up, home delivery, as well as other banks payments.

Metrobank executive vice president and International Offices and Subsidiaries Group head Carmelita R. Araneta said that with over 8,000 partners - mostly credit union and banks - that BNYM has for the program, the arrangement complements Metrobank’s offices in the United States.

“The new arrangement expands the bank’s relationship with Bank of New York Mellon from a purely correspondent relationship to a remittance partnership,” Araneta added.

Metrobank corners a major share of the total remittance business owing to its remittance offices and partners abroad. The bank has an extensive global network of international branches, offices, and subsidiaries in Asia Pacific (Hong Kong, Japan, Singapore, Taiwan, and Shanghai), the Americas (New York, Hawaii, California, Chicago, Canada, and the Bahamas) and Europe (London, Rome, Milan, Bologna, Madrid, Barcelona and Vienna).

Last year, Metrobank established a sub-branch in Shanghai, the business center of China.

Metrobank already operates a full branch in Shanghai, and under state regulations, one full branch can give birth to many sub-branches in the same province or city.

It likewise increases the opportunities to open full branches in other provinces or cities anywhere else in mainland China. Metrobank is the only Philippine bank that has an operating full branch license in China.

Araneta explained that operating more branches and sub-branches opens more opportunities for the Ty-led universal bank.

A sub-branch allows for basic banking services as a full branch including deposit taking, lending, trade banking and remittances.

Metrobank is one of the country’s leaders in the remittance business, accounting for roughly a fifth of total remittances passing through the country’s banking system. It has an extensive network of 552 domestic branches and an ATM network with over 800 teller machines.

venntro

March 2nd, 2009, 03:35 AM

International Monetary Fund backs PDIC charter change (http://http://www.philstar.com/Article.aspx?articleId=444687&publicationSubCategoryId=66)
Updated March 02, 2009 12:00 AM

MANILA, Philippines - The International Monetary Fund (IMF) has expressed its support to the strengthening of the capabilities of the Philippine Deposit Insurance Corp. (PDIC) as a co-regulator of the banking system through the amendment of its charter.

The IMF Staff Report for the 2008 Article IV Consultation released on Dec. 22, 2008 called on a number of measures to enhance the institutional and financial capabilities of the state deposit insurer to support the doubling of the maximum deposit insurance coverage (MDIC) from P250,000 to P500,000.

The Senate had earlier approved Senate Bill 2964 to amend the PDIC Charter while the House of Representatives passed on second reading recently its own version. Upon approval by the House of the PDIC bill on third and final reading, both chambers of Congress will convene as a bicameral conference committee to reconcile the two bills and endorse for joint resolution a final PDIC bill.

The measure is seen to boost the state deposit insurer’s capacity to protect depositors of the Philippine banking system through an increase in MDIC and the adoption of corollary measures that will reinforce the institutional and financial capabilities of the PDIC.

The IMF team, led by IH Lee, released its financial strengthening recommendations that included enhancements in the deposit insurance system in IMF Public Information Notice (PIN) No. 09/21 dated Feb. 17, 2009. The PIN summarized the results of the IMF consultations with key Philippine economic officers and private sector representatives that included Finance Secretary Margarito Teves, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., Budget Management Secretary Rolando Andaya, and National Economic Development Authority Secretary General Ralph Recto.

The consultations, held in Manila on Nov. 5 to 14, 2008, focused on near-term financial sector and macroeconomic policies to safeguard domestic and external stability in the face of adverse global financial spillovers.

The IMF recommendations include the doubling of the MDIC, the creation of a bridge bank as a bank resolution method, and the recapitalization of PDIC. The IMF also noted that PDIC must be given the flexibility to temporarily raise the MDIC amidst a turbulent financial sector. IMF likewise recommended enhanced legal protection for PDIC staff.

“We are pleased that the IMF recommendations are in consonance with the PDIC Charter Amendments which will soon be taken up in a bicameral conference committee of the Senate and House of Representatives,” PDIC president Jose C. Nograles said. “This gives a strong signal that we are in the right track with our aim to strengthen PDIC which, in turn, will help promote stability and confidence in the banking system,” Nograles added.

tonight

March 2nd, 2009, 04:00 AM

SEC, 65 traders file raps vs Legacy exec (http://business.inquirer.net/money/breakingnews/view/20090301-191741/SEC-65-traders-file-raps-vs-Legacy-exec)
By Norman Bordadora

MANILA, Philippines -- The Securities and Exchange Commission filed late last week yet another criminal complaint before the Department of Justice against embattled businessman Celso Delos Angeles and another one of his companies in the Legacy Group.

This developed as a group of 65 investors from Cebu lodged their complaint for syndicated estafa against Delos Angeles before the DOJ in connection with Legacy’s double-your-money scheme that again also failed to deliver the two-fold return.

A 20-page affidavit detailed the SEC’s new case against Delos Angeles and other officers of Galaxy Realty and Holdings, Inc., for violation of the Securities and Regulation Code that banned the sale of securities without the SEC’s permission.

The SEC, in its complaint, showed that Galaxy was another Legacy-affiliate allegedly used to solicit investments that later turned sour without the promised high yield of returns.

“As can be gleaned from their complaints-affidavits, Legacy Consolidated Plans, Inc., through sales agents, enticed the complainants-investors to invest their hard-earned money in the company,” the commission said.

Individual complaints have been filed before the SEC against Galaxy involving at least P15 million in total investments.

“To ensure payment of their investments, Legacy Consolidated Plans, Inc., gave the investors post-dated checks under the name of respondent Galaxy Realty. Unfortunately, some of these post-dated checks bounced starting November 2008 for the reason ‘account closed’ or ‘insufficient funds,” it added.

A multimillion-peso syndicated estafa complaint was also brought before Delos Angeles by investors in the Legacy Consolidated Plans, Inc., who were allegedly defrauded by its “double-your-money” scheme.

The investors claimed that Delos Angeles himself handed out brochures detailing the investment plan and presenting Legacy’s supposed liquidity and ability to deliver on the returns on investment.

“Clearly then, at the outset, LCPI was not really into the legitimate business of selling bona fide pension plans. LCPI, while it may have been authorized to do so, did not actually intend to sell pension plans,” the investors said in their complaint.“

"Instead, LCI wanted to generate and solicit monies from the public using LCPI’s pension plans as a smokescreen to further LCI’s double your money scheme," they added.

venntro

March 2nd, 2009, 04:17 AM

BSP files last complaint versus Legacy officers (http://http://www.philstar.com/Article.aspx?articleId=444832&publicationSubCategoryId=63)
By Edu Punay Updated March 02, 2009 12:00 AM

The Securities and Exchange Commission (SEC) has filed charges of fraud at the Department of Justice (DOJ) against businessman Celso De los Angeles Jr. and other officials of the controversial Legacy Consolidated Plans Inc.

In a 20-page complaint filed last Friday, the SEC accused De los Angeles, incumbent mayor of San Jose, Albay, and six others of violating several provisions of RA 8799 (Securities Regulation Code) and Corporation Code of the Philippines (CCP) for supposedly using Galaxy Realty as a business conduit of Legacy Consolidated Plans Inc. in its grand scheme to defraud investors.

SEC said the case is the “final piece of puzzle to complete the elaborate and fraudulent activities of Legacy Consolidated Plans Inc.”

They also accused De los Angeles’ wife Ma. Concepcion, son Martin Nicolo, brother Victorino, mother Purita, and Galaxy Realty officers Eva Villapando and lawyer Christine Limpin, following the complaint filed by 14 investors who shelled out some P16 million into the firm.

Investigation showed that most of contracts, official receipts and other pertinent documents issued to the investors were under the name of Legacy Consolidated Plans Inc. but the postdated checks used to allegedly secure the return of investments were drawn under the account name of respondent Galaxy Realty.

De los Angeles’ group was specifically accused of violating sections 8, 16 and 26 of RA 8799 and section 45 of CCP for selling unregistered securities and engaging in misrepresentation by assuring investors that the principal amount of their investments is guaranteed.

Section 16 of the SRC provides that no person shall offer to the public any pre-need plan without the approval of the SEC, while Section 26 prohibits anyone from employing any device or scheme to defraud.

The respondents will face imprisonment of not more than 21 years and pay fines ranging from P50,000 to P5 million.

The SEC also filed two complaints against Legacy Group and One Realty Corp. of De los Angeles last Thursday.

“The act of Legacy Card (formerly Legacy Group Inc.) in issuing postdated checks to secure the payment or return of the investments solicited by Legacy Consolidated Plans Inc. was in excess of the primary purpose for which it was incorporated. As such, the said act amounts to misrepresentation as to what the corporation can or cannot do,” the SEC said.

SEC also filed charges against One Realty, which was accused of acting as the business conduit of Legacy Consolidated Plans Inc. in its grand scheme to defraud the investors.

Roxas invites victims of fraud

Sen. Manuel Roxas II has invited victims of Legacy Consolidated Inc. to attend the Senate public hearing today to narrate how De los Angeles and his managers sweet-talked them into investing their hard-earned money in its banks and affiliate businesses that have later filed for dissolution.

Also summoned were De los Angeles, officials from the SEC, the Bangko Sentral ng Pilipinas, the Philippine Deposit Insurance Inc, and players in the pre-need industry.

“We will find out how De los Angeles and his officers were able to convince parents and retired workers to invest their monies to Legacy. What sweet words did they use that resulted in the bitter plight of these plan holders?” said Roxas, chairman of the Senate trade and commerce committee.

Roxas met with some 200 victims of Legacy last Saturday in Davao City, where he personally listened to their complaints on how De los Angeles and his managers tricked them.

One of those who attended the meeting in Davao had agreed to testify during today’s hearing. The witness was a former ranking officer of Legacy.

She will detail how De los Angeles and his minions planned scheming offers to generate money for the company, with the clear intent of misleading their investors and getting their hard-earned savings.

Roxas said the inputs he culled from the discussions would be used as guide by the technical staff of his committee when it comes up with remedial measures on how to more strictly regulate the pre-need industry; and to the legal counsels when it comes to demanding accountability from De los Angeles and the other suspects.

Legacy has sold more than 50,000 educational plans for an estimated worth of P1.4 billion. Its trust fund held by its trustee banks only has P350,000, according to De los Angeles.

Roxas has tapped a pool of lawyers to provide free legal counseling to victims of pre-need companies. Those who wish to avail the free legal assistance can text or call 0919-627-6927.

The SEC had earlier filed charges against De los Angeles and the other Legacy officers last Feb.13 for alleged involvement in a double-your-money program wherein potential investors are wooed with promises of unusually large gains.

Under the Legacy Group’s double-your-money program, investors will supposedly double their investment in three years and immediately get 10 percent of the plan’s maturity value. The balance of 90 percent will be paid in 12 equal installments through postdated checks issued by Legacy Consolidated Plans, one of three pre-need firms under the Legacy Group.

Investors said only the first three or four of the 12 checks issued by the group were funded.

De los Angeles was tagged as the mastermind behind the financial schemes that led to the collapse of the Legacy Group which comprised 13 rural banks and affiliate firms Legacy Consolidated Plans, Scholarship Plan Phils., Legacy Card Inc., One Realty Corp., Galaxy Realty and Holdings Inc., Legacy Consolidated Asset Holdings Inc., Fusion Capital Corp., Conventional Realty Corp., Shining Armour Property Inc., and Legacy Motors Inc.

Among the rural banks were Rural Bank of Parañaque, Rural Bank of San Jose (Batangas), Rural Bank of Carmen (Cebu), Pilipino Rural Bank, Philippine Countryside Rural Bank, Rural Bank of Calatagan (Batangas, now Dynamic Rural Bank), Rural Bank of DARBCI, Rural Bank of Kananga (Leyte, now First Interstate Rural Bank), Rural Bank of Bisayas (Minglanilla, Cebu, now Bank of East Asia), and San Pablo City Development Bank.

These banks reportedly offered returns of as much as 30 percent per annum on huge deposits and misused collaterals surrendered by clients. –With Christina Mendez

venntro

March 2nd, 2009, 06:37 AM

PSBank sees 17% profit growth in 2009 (http://http://www.abs-cbnnews.com/business/03/02/09/psbank-sees-17-profit-growth-2009)
abs-cbnNEWS.com | 03/02/2009 12:16 PM

Philippine Savings Bank (PSBank) expects a 17 percent rise in net profits this year on the back of continued growth in deposits and loans.

In a statement, PSBank said its net income for 2009 could reach P1.1 billion compared to P940 million last year.

"While we anticipate weaker demand from households and consumers in 2009, we have built a momentum in our core business growth that will serve us well this year. We will focus on relationship deepening programs that will improve cross-selling results," said bank president Pascual Garcia III.

Garcia added that the bank's treasury business should recover this year while margins are likely to improve due to lower funding costs resulting from slower inflation and monetary easing.

PSBank intends to further develop its network through aggressive branch expansion and setting up of additional ATMs. These are seen to further increase deposits and allow PSBank to actively go after lending and investment opportunities. The bank expects its deposits to grow by 11 percent and loans by 9 percent this year.

Last year, weak trading gains due to the bad investment climate pulled down PSBank's earnings by 8 percent from P1 billion to P940 million. The bank reported that trading revenues for 2008 fell by P900 million, resulting in a 24 percent decline in non-interest income to P1.4 billion.

PSBank, the country's second-largest thrift bank, currently has a network of 164 branches and 188 ATMs nationwide.

tonight

March 2nd, 2009, 06:45 AM

^^
good for them :okay:

tonight

March 2nd, 2009, 08:06 AM

BSP approves PNB's P5-B deposit offer (http://business.inquirer.net/money/topstories/view/20090302-191861/BSP-approves-PNBs-P5-B-deposit-offer)
By Doris Dumlao

MANILA, Philippines -- The Philippine National Bank (PNB), the banking arm of tobacco magnate Lucio Tan, has obtained approval from the central bank to offer P5.0 billion worth of high-yielding long-term deposits to the public.

PNB disclosed the Bangko Sentral ng Pilipinas's approval to the Philippine Stock Exchange on Monday.

PNB, the country's fifth largest commercial bank, plans to issue the long-term negotiable certificates of deposits (LTNCDs) within the first semester.

Individual investors get the interest coupon tax-free if they hold the LTNCDs to maturity compared to the local central bank's special deposit account (SDA) and government securities, which are subject to the 20 percent withholding tax.

Unlike regular deposits, banks are able to offer higher yields on LTNCDs because funds raised from these are exempt from the reserve requirement.

PNB recently exercised a call option on P3.0 billion in subordinated or tier 2 notes prior to maturity in 2015 to avoid an increase in debt servicing fees.

A call option gives the issuer the right but not the obligation to buy the security at a specified price within a specified time period.

PNB is set to merge with Allied Bank, also owned by Tan, within the year.

The bank expects to post a 15-percent increase in net profits this year despite costs from its integration with Allied Bank. Growth is expected to be supported by at least a 10-percent expansion in loans.

venntro

March 2nd, 2009, 08:37 AM

^^ Ang yaman talaga ni Lucio Tan.

venntro

March 2nd, 2009, 08:37 AM

Survey: RP seen to cut interest rates again this week (http://http://www.philstar.com/Article.aspx?articleId=444894&publicationSubCategoryId=200)
Updated March 02, 2009 02:09 PM

MANILA, Philippines (Xinhua) -- The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), is forecasted to cut interest rates again this week to boost domestic demand, a local newspaper survey shows.

Six out of eight executives polled by the Business World said the slash would be at least 25 basis points as central bank officials convened for the March 5 policy-setting meeting, the paper said.

The Philippine central bank has cut its key policy rates by a total of 100 basis points since December last year following the plunge of inflation reading from 12.5 percent in last August to 7. 1 percent in January.

The authorities predicted the inflation to fall to average 2.5 - 4.5 percent this year.

At present, the overnight borrowing and lending rates stand at 5.0 percent and 7.0 percent.

Top central bank officials gave hints that there is still room to further ease the monetary policy.

tonight

March 2nd, 2009, 08:42 AM

^^ Ang yaman talaga ni Lucio Tan.

^^
oo, ano sa tingin nyo sasali pa kaya siya sa pulitika? :D

tonight

March 2nd, 2009, 09:44 AM

ADB commits to aid plan for Philippines (http://business.inquirer.net/money/topstories/view/20090301-191752/ADB-commits-to-aid-plan-for-Philippines)
By Michelle Remo

THE ASIAN DEVELOPMENT Bank, one of the country’s primary sources of official development assistance, said it was keeping its financial assistance plan for the country for 2009 to 2010 despite charges of corruption involving a project funded by the World Bank.

ADB stressed, however, that it was taking all corruption issues “extremely seriously.” While the lending programs lined up for the Philippines for 2009 to 2010 still stand, ADB said it was exercising vigilance in monitoring projects it funds.

“The latest agreement with government is reflected in our Country Operations Business Plan 2009-2010. That has not changed. [But] ADB will continue to be vigilant in implementing its anticorruption policy,” ADB media relations officer Karen Lane told the Inquirer in an e-mail.

Under the latest Country Operations Business Plan [COBP] of the ADB for the Philippines, it plans to lend as much as $974 million from 2009 to 2010 to fund developmental projects in infrastructure, environment and financial sector.

ADB said the Philippines’ ability to cut its budget deficit, from P187 billion in 2004 to only P68.1 billion in 2008, gave enough reason for the institution to continue lending to the Philippines.

“[COBP] will continue ADB support for medium-term reforms,’ the foreign lender said in the paper on its assistance strategy for the Philippines.

Earlier this year, the Senate conducted a hearing on the alleged corruption involving a road project that was supposed to be funded by the World Bank.

This was prompted by the World Bank’s announcement that it had blacklisted several firms from participating in any of its projects in the Philippines because of rigging the bidding for contracts and colluding with certain government officials.