WHILE ON a recent trip to Japan, I heard a story about an OFW driver who nearly wasted away his earnings. He worked in Japan for close to 30 years, and at one point was earning an equivalent of P400,000 a month with overtime pay. He had a wife and child back home in the Philippines and was able to send his child to school. However, he was always out drinking at bars in expensive Tokyo while having several relationships with other women. “Puro good time,” they say.

Well the guy wasn’t able to hold on to his job due to his drinking problem. His employer asked him to resign, and he was given an equivalent of P2 million as separation pay.

His Filipino friends could only shake their heads in disbelief at how he wasted away the opportunity to have a well-paying job, and how he was not able to save any money to make his life better. Last they heard, he was back home, bought himself a tricycle which he drives for a living, and is staying with his parents since he could not afford to buy a house of his own.

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THE AMATEUR video taken at the UERM parking lot during the height of typhoon Ondoy showed what happens to cars when flood gets to them: they float and bump into each other, and become heavily damaged.

The flood was considered by insurance companies as an act of God, and those without coverage for it sadly could not claim for damages.

We asked Arthur L. Panganiban, EVP/COO of Gotuaco,Del Rosario Insurance Brokers, Inc., an all-Filipino professional insurance broking and consulting firm in the Philippines, what this is all about and here is what he said.

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WITH THE country reeling from a triple whammy calamity (flooding in the National Capital Region, flooding in Laguna, and flooding in northern Luzon), the last thing we would like to be hit with are price increases.

After Typhoon Ondoy unleashed its devastating effect, it was really kind of big business to lower prices. The day after the great flood, MRT charged only a flat rate of P10 regardless of whether one’s destination was near or far. Pan de Manila lowered the price of its pan de sal during the days after the deluge. Kalinisan Steam Laundry offered free laundry services to typhoon victims. Even SM malls and other malls waived the overnight fee for cars left in their carpark overnight when shoppers were stranded during the flooding.

So price increases after Typhoons Ondoy and Pepeng have left the country really leave a bad taste in the mouth.

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HE may not be as famous (yet) as a rock star or top chef Cristeta Comerford (the Fil-Am chef at the White House), but Dr. Eli Remolona is at the top of his game. Currently the chief representative for Asia and the Pacific of the Bank for International Settlements (the central bank of central banks), Dr. Remolona is considered to be the most prominent Filipino economist in international monetary and financial policy circles. Based in Hong Kong, he deals with the 12 most important economies in the Asia-Pacific region.

For him, economics is a passion. He worked for the World Bank and the Federal Reserve Bank of New York, and taught at Columbia University, New York University, Stanford University, and the University of the Philippines. He finished his bachelor’s degree in economics (honors program) at Ateneo de Manila University, his master’s degree in economics at the University of Hawaii, and his doctoral degree in economics at Stanford.

He has authored a lot of papers on economic policies and international finance, including the famous Krugman Report, in which he wrote the chapter on monetary policy. For his outstanding achievement, Bank of the Philippine Islands awarded him last month the BPInoy Award for being an excellent example of how to “be Pinoy” even when working abroad. The other awardees were Comerford and painter Anita Magsaysay-Ho.

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IT USED to be that bonds were out of the reach of the small Pinoy investor. But that all changed when retail bonds were offered by both the government and the corporate world.

Offering a higher interest rate than time deposits, retail bonds are quite popular given their minimum investment requirement. For retail treasury bonds (RTBs) offered by the national government, investors can invest with a minimum placement of P5,000 and in multiples of P5,000 thereafter. Retail corporate bonds vary in amount, depending on the issuer.

Currently, the government is offering RTBs maturing in 2012 (3-year RTB), 2014 (5-year RTB), and 2016 (7-year RTB). The offering period started last September 15 and ends on September 22. Interest rates are as follows:
5.25percent for the 3-year RTB
6.25percent for the 5-year RTB
7 percent for the 7-year RTB

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By Karen Galarpe

PRETTY SOON, you might want to think twice about sending that text message.

On a committee level, a bill in Congress has been approved that will impose a 5-centavo tax on every text message, picture, audio and video file sent. See story here.

The bill is not a law yet, but with the government standing to raise P20- to P36-billion a year from such a tax, it may look like the bill will be made into law, unless consumers make themselves heard.
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SORRY TO start off your week with a couple of sad stories, but these stories beg to be told. Mind you, they are true stories, which happened here in Manila recently.

Story 1
A widow in her sunset years has a small house and lot in her name. That is her only asset and it was given to her by her late husband.

The widow entrusted the land title to her daughter for safekeeping, who kept it in her own home she shared with her husband.
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IT IS no secret that a lot of marital conflict is due to the way money is handled in the family. Sad, but true. At the recent “Money Sense Live! Family Finance 101” seminar organized by Learning Curve, Heinz Bulos, editor-in-chief of Money Sense magazine, says the reasons why couples fight over money include:
*  having different money personalities
*  valuing money in different ways
*  both parties wanting to take charge or one is clueless or not interested
*  both parties still live as if they’re single
*  having difficulty trusting
*  being irresponsible
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IF YOU’RE due to renew your driver’s license soon (which means your birthday is coming up—Happy birthday!), make sure you won’t be charged an unnecessary late renewal fee.

Carmen Dulguime went to the Land Transportation Office branch at the Ayala MRT last week, a few days before her birthday. After undergoing the drug test, she went to the cashier and was surprised to be charged an additional P75 as late renewal fee.

She asked the cashier when she should have renewed her license. The cashier replied, “60 days po.”
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By Karen Galarpe

IT seemed like a scene from a scary movie:
P30,000 per sem tuition now will become–
P111,000 per sem in 17 years at 8 percent increase per annum
P152,000 per sem in 17 years at 10 percent increase per annum
P206,000 per sem in 17 years at 12 percent increase per annum

As Registered Financial Planner Alvin Tabanag continued on with his Powerpoint presentation at the recent Money Sense Live! Family Finance 101 seminar, the audience looked at him in disbelief when he said it may take P1 million to P2 million to get a child through college 15 years from now.

That may be peanuts for the millionaires out there, but for the rest of us, that is a tall order. A very tall one.

Clearly then, we must all save for our children’s education, and the earlier we do so, the better. Just how to do that? Tabanag, personal money management coach, author of Kaya Mo Pinoy! 12 Steps to Build Wealth on Any Income, and founder of Pinoy Smart Savers, counts the ways:

1.Pay as you go.
It’s crossing the bridge when you get there. “A bad strategy since there is no guarantee that the parent will still be gainfully employed or earning income at that time,” said Tabanag. This may also lead to huge debts if that’s the case.

2.Get an educational plan.
Now educational plans are viewed with utmost suspicion since the industry is having problems. However, Tabanag said the industry is recovering. What really pulled the industry under was the sale of traditional educational plans since the 80s which promised payment of tuition fees in the future no matter what the cost may be. The unanticipated deregulation of tuition fees, the 1997 Asian financial crisis, and the lax enforcement and monitoring of government agencies adversely affected the trust fund earnings of the preneed companies offering traditional educational plans, and the rest, shall we say, is history.

“The preneed industry, while troubled right now, will get better,” explained Tabanag, citing the recent SEC order requiring preneed companies to increase their trust fund deposits up to 70 percent. He further said saving for a child’s education through a preneed education plan may be attractive to some because it is ideal for those on a tight budget, fits nicely to our “gives” mentality, is easy to understand, and forces us to save.

Here are Tabanag’s tips for those considering getting an educational plan:
a. Buy only from big, reputable companies.
b. Read the terms and conditions carefully.
c.Compare rates of return.
d.Buy the plan you can afford.

3.Save and invest on your own.
Another strategy is do-it-yourself: Invest for the purpose of getting higher potential earnings. There is a risk involved, and this strategy requires discipline and regular monitoring. However, there is a wide array of investment choices available which can help you meet your goal. Examples of investment choices are long-term deposit accounts, government securities, stocks, and mutual funds or unit investment trust funds.

4.Use the mixed funding strategy.
This simply means employing a combination of any 2 or all approaches.

Whatever way you choose, start saving now.