We have talked about this often here in MoneySmarts: the pain suffered by OFWs who now can buy fewer pesos with their dollars.

As you all know, the peso broke into the 43-per-dollar level yesterday for the first time in even years. The exchange rate is now closer to the yearend forecasts of Richardson, Vero, Clipper, Reinan, Melan and the rest :-) (Check out the result of our peso forecast game here and the original challenge here)

We all know the peso will keep on climbing. This statement from the central bank, however, was very illuminating:

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We all want to live comfortably, if not with an affluent lifestyle. But not all of us think about how to exit this life in style. Just today, I learned how that requires quite a lot of money!

A family estate at Loyola Memorial Plans, for example, now costs at least P5 million complete with an air conditioned family mausoleum. Five years ago, the same lot cost P3 million, quite a big jump in price. I think it was business columnist, author and public speaker Francis Kong who said one of his favorite investments is funeral lots! You know what they say about obstetricians and gynecologists – they are never out of business.

At The Heritage Park in Fort Bonifacio, a family estate costs P3.4 million – and that’s the cash price. The same lot goes up to P3.7 million if you pay in installment.

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 When I wrote about the Bangko Sentral’s plan to revive its proposal to float $1-billion in bonds for overseas Filipino workers, the reactions were a mix of skepticism and curiosity.

Many did not trust the government, so lending money to this administration (which is, in effect, what you would be doing if you buy the bonds) did not make any sense. Others are concerned that the bonds are dollar-denominated, and with good reason because for the past year, the dollar has been losing value against every other currency of the world.

Personal finance expert Alijeffty Gonzales, however, raised some points that should also be considered by many of us.

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Mzkukuro wants to trade stocks. Many of you have emailed me about this also. Why don’t we meet up this November and I can arrange for someone to give you all a tour of the Philippine Stock Exchange trading gallery, the same tour I arranged for Bianca and Diego?

Any takers? I need at least 10 participants and it’s a go. We will videotape everything for our readers overseas.

Guess which toys my two-year old son played with the most?

This Leapfrog overpriced invention that sings the alphabet for him while mom looks on?

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(This post was written by Bianca, a MoneySmarts reader who was chosen among a long list of candidates to be part of our Money Makeover. In Money Makeover, we match financial planners with reader-volunteers and chronicle their one-year journey to their financial goals. Generali Pilipinas’ senior executive vice-president Augustus J.V. Ferreria has agreed to coach couple Bianca and Diego for 12 months pro-bono. In Money Makeover, we aim to show readers that finding financial freedom is really possible. Read previous Money Makeover articles here.)

I do not do math.

Addition

It started simple enough.  Joe wanted us to list all of our expenses every day forever.  He did not warn us that our hearts could suffer anxiety attacks because, for one, we were confronted by the fact that our expenses overshot our income by some P30,000 every month.  He also provided no explanation as to how we could have survived all this time – but our zero-balance savings, credit card debts, frequent lifeline calls to mom and dad could possibly provide a clue. It is a stressful exercise trying to figure out where our money went every day because with it comes the understanding that it went to excesses of the flesh and vanities. Want and need are becoming very delineated concepts at this time (but concepts all the same).

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Our Take Charge of Your Money feature today helps a young investor to build a good portfolio. His question was:

I want to begin investing for my future, and wonder if there is a recommended portfolio? How much should I set aside for short-term needs, medium-term requirements and long-term goals? I just turned 25, am single and can set aside between P10,000 to P20,000 monthly. - Paolo C.

Paolo must be earning well. But that’s not what floored me. It’s the fact that he is willing to set aside P10,000 to P20,000 regularly.

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Doris Dumlao wrote an interesting story today in the Philippine Daily Inquirer:

MANILA, Philippines–THE GOVERNMENT has revived plans to offer as much as $1 billion in retail treasury bonds to overseas Filipino workers as proposed by the Bangko Sentral ng Pilipinas (the Philippine central bank) to harness large remittance flows for productive investments.

BSP Managing Director Ma. Cyd Amador said the BSP and the Bureau of the Treasury have resumed discussions on the proposed OFW bonds. “It looks like they (Treasury officials) are more open this time around,” Amador said.

She said the BSP and the Overseas Workers Welfare Administration were considering holding overseas roadshows on financial literacy, focusing on countries that host big Filipino communities.

Click here to read the rest of the article.

Most interesting points:

1. Government has now realized the importance of teaching Filipinos, especially OFWs, about financial literacy. Enough about politics, let’s learn how to keep our heads above the water by learning how to save and invest.
2. Can investing in bonds really help OFWs reintegrate into the economy? Alone, it can’t, but together with a well-thought out plan (and lesser corruption and better business environment), maybe. With the dollar continuing to weaken, some economists say that more Filipinos will be coming back home. What will they come home to? A manufacturing sector that is hollowing out as more companies rely on automation and technology rather than hiring people, thus no employment opportunities. Entrepreneurship and investing wisely will increasingly be a popular option.
3. Bangko Sentral expects remittances to slow down significantly next year (as in 5% from 15%) and its study shows OFWs send less home when the economy is not doing so great.

For those who are interested in buying OFW bonds, better read this article by Noet Ravalo. It’s a bit dated (he wrote it in 2003 for then INQ7.net) but you will still learn a lot from the principles he explained:

The danger of getting too complacent with bonds

Here’s an excerpt:

Many people have the impression that investing in bonds is fairly straightforward and that bonds are a no-brainer no-risk investment.

The truth is anytime you buy in or unload before maturity, there are enough pitfalls to cause serious financial ruin.

Bonds are long-term debts issued either by a country or by a corporation. There is no absolute definition to the qualifier “long-term” but we associate bonds as those with maturities longer than one year.

Anything shorter than a year’s maturity is referred to as a “bill”. This is why you hear terms like Treasury bills (T-bills) and Treasury bonds (T-bonds).

The terminology though can be extra confusing in the Philippines. Instead of a corporate bond, for example, tax considerations have instead coined the phrase Long-Term Commercial Paper (LTCP).

As a long-term debt, bondholders receive a periodic payment called “coupon”. These coupons are paid to the bondholder every six months.

If you plan to hold a particular bond from the time it is issued, to its maturity date, the return you get can be summarized by the coupon.

But very few hold a long-term instrument for its full term. Normally, investors buy and sell during the life of the bond and this trading activity leads us to the issue of price fluctuation. 

Happy investing!
 

What are the chances you would be a victim of a bomb blast? I’m pretty sure the 89 persons wounded by the blast or the families of the eight who died had that farthest from their minds as they spent the afternoon going about their ways.

Always be prepared because anything can happen. Protection comes first before investing.

I can’t help but thank God I didn’t have a meeting in that area today, nor opted to buy my tickets from Philippine Airlines whose new sales office is now near the area. It’s unfortunate and very shocking to see so many people wounded and hurt.

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Where did all my money go? Isn’t that a question we all ask ourselves from time to time?

Well, here’s a common answer: look in your closet.

Are you looking? Seven pairs of shoes all with straps and high heels but in different colors, matching handbags, shirts, blouses, designer jeans, and signature dresses. Then you see all those baubles peeking out from the jewelry box – trinkets for the ears, neck and wrists.

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