There’s insurance for credit card debt, personal loans, mortgage loans and other kinds of loans usually offered through direct mailers and sometimes by telemarketers. It’s a complex product with a simple goal: to protect the borrower and the lender from loan default in case something happens to him while paying the loan.

But here’s a voice of reason from a bank that offers this product. “Not everyone needs it.”

Is it worth it to get credit card-related insurance? This is a question only the borrower will be in the best position to answer. Ask yourself: Is it worth it to get someone to help me pay off my credit card dues in the future when I can’t? Those who charge only a little amount on their credit card monthly, or regularly pay off the total credit card balance at month’s end don’t need it. (Read the rest of the article here.)

Protection for rainy days. Do you really need it? Photo from AFP. 

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Philippine Long Distance Telephone Co. (PLDT) is slashing its workforce. More than 500 employees will be forced to retire with P1.1 million by September 15. PLDT says that’s the average compensation of the employees the company needs to let go.

If you suddenly find yourself out of a job, has skills in telecommunications traffic operations, fleet services and network, and suddenly holding P1.1 million in your hands, what are you going to do with it?

Food for thought on a very slow news day.

Buckle up. The smooth ride is over; it’s time to embrace volatility. After all, that’s just the nature of the beast. Or at least, that’s what Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. is saying. It’s probably just a nice coincidence that several business stories indicate that the private sector is on the same page.

If you missed reading the business pages in the last 24 hours, you should at least read these:

$246M in ‘hot money’ fled RP in Aug.
Peso continues to strengthen, closes at P46.47:$1
MANILA, Philippines — Some $246.44 million in net foreign investments in stocks and bonds fled the Philippines in August due to global market jitters triggered by the worsening US housing slump, the Philippine central bank reported Thursday.

MoneySmarts: Hot money has nothing to do with the weather, nor hot ladies. When reading business stories, simply remember that hot money comes mostly from foreigners interested in making a quick buck in Philippine stocks, bonds and money markets. The Philippine stock market is quite dependent on them, that is why we are vulnerable to things like the subprime mortgage mess in the US and anything that makes first world economies sneeze. The more technical terms for ‘hot money’ are short-term capital flows or portfolio investments.

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A reader writes:

I got married six months ago, and am now finding out that my husband and I have different attitudes towards money. Maybe because we come from different backgrounds – I had to work to pay my way through college, while he was fully supported by his parents. Any advice so this won’t come between us? – Laine from San Juan.

Money doesn’t ruin marriages. Attitudes towards money do. People may have general similarities when it comes to handling money, but I bet that 10 couples given P20,000 each and one half day in the mall would have 20 different shopping bags at the end of the day. Those are 20 different attitudes from 20 different people!

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Yesterday, I threw a question at you on whether it’s better to time the Philippine market or hold on to investments for the long haul. To me, the significance of this question is magnified by the inefficiencies in our local stock market and the investment environment. I wondered whether Philippine-centric issues such as market inefficiencies make the Warren Buffet-style investing ineffective here.

Thank you for your replies.

Read what the experts say:

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A READER sent an intriguing question to INQUIRER.net and I’ve been spending quite a big chunk of my time going around business circles and asking experts what they think. But before I post their replies, I want to know what MoneySmarts readers think. Here goes:

After reading all of the columns and articles on investing, personal finance, and wealth management, there is still one question the bugs me to this day? Yes, we’ve learned about asset classes, risk and return, profiling, suitability, a lot of other terms. But when it comes to managing your money, especially to those who have the time to do it on their own and probably not have enough to qualify for a private bank account, which is the greater truth?

1. Invest long term, don’t actively manage your investments, and just invest in the market via index funds, or
2. Invest using short term cycles (i.e. time the market) and actively manage your investments by picking the potential winners.

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For Filipinos who are just starting to get their long-term savings acts together, mutual funds have slowly become the investment instrument of choice. It’s not very hard to see why. For a minimum of P5,000, small savers get a professional fund manager working to grow their little nest egg. (Photo of cuckoo’s nest courtesy of Michelle Morelos)

Businesswoman Liah Alcantara is confident returns from the company she has nurtured will help her retire perhaps better than she initially expected. Lately, however, she realized she needed to “put her eggs in different baskets” and invested some of her extra money in mutual funds.

She says she is not a financial person and knows little about how the market works. After listening to her financial planner, however, she decided to make a go for it. Next steps: learning to keep calm amid the gyrations of the market and decoding the mutual fund table.

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Jumper Kim Hopwood is seen as he leaps from the top of the 421-metres Kuala Lumpur Tower, during the International Tower Jump 2007, 24 August 2007. (Photo from Agence France Presse)

Here’s something I picked up from my interview with Francis Kong, veteran entrepreneur, public speaker and writer:

“Taking risks is good.”

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By Bianca

It was not your run-of-the-mill first meeting. True, there were muffins and sodas and a lot of getting-to-know-you questions but then Joe posed this query: “Who are your parents?” And he did not mean their names.

Joe explained that we are our parents – how we spend, earn, our attitude toward money – they are mainly because of what we were taught, what we observed from our parents, what we hated but imbibed anyway, whether consciously or unconsciously. That if we understand them, we understand ourselves.

I began to understand. [Read the rest of this entry »]

I wonder how President Gloria Macapagal-Arroyo handles huge swings in emotion. If she’s not on the verge of a tantrum (Are you telling me these people from the NSCB are liars??? – additional question marks mine), she’s on cloud nine about the GNP figures.

Expect to read all sorts of analysis about the GNP and GDP figures in the coming days. I wrote about what these figures mean in this post.

Two of the smartest economists in the country, Dr. Felipe Medalla of the UP School of Economics Cielito F. Habito of Ateneo, both former socioeconomic planning secretaries, earlier this year expressed doubts on the integrity of the national income accounts. They should know what they are talking about. The National Statistics Coordination Board was once an agency under them.

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