December 2007 Archives

Photo from Agence-France Presse (I have not been able to access this blog for the last four days, so I'm posting my entry for last Friday.) It’s such a pain to withdraw money from ATM machines these days. The lines are always so long! Since I am such an OC and would only transact with my bank’s ATM, finding one always feels like Amazing Race, the Trinoma leg. A very good friend tried to convince me it was a goofy idea to spend so many calories hunting for the right ATM machine to save up on bank fees. I’ve got all those flabs to think about, after all. I wouldn’t want them to lack nutrients nyahaha. Seriously, I do get overboard sometimes when it comes to “financial” stuff. I mean, there I was waiting 20 minutes for my turn at the ATM machine when I charge so much more than P11 for 20 minutes of my time! Wasn’t that crazy? There has to be the right balance, though. Efren Cruz, author of Pwede Na: The Pinoy Guide To Personal Finance wrote in his book that too many people take for granted the hidden fees and charges from banks. At P11 per transaction, if you use your ATM like a wallet and, say, withdraw money 20 times per month, that’s P220 in ATM charges per month and P2,640 per year. Add a little bit more and you could have bought shares in Philex Mining during its initial listing and tripled that amount by now. Or something like that. Some banks charge P7 per transaction, some as high as P11. Bancnet members don’t charge anything for balance inquiries, but Megalink-member banks do. Citibank and HSBC don’t charge any ATM fees at all. Click on this link to see how your bank fares when it comes to service fees: Click here to read http://www.bsp.gov.ph/banking/servicefee.htm. With uber beezee ATM machines these coming weeks, chances are higher for some networks to suffer from connection problems and you might get debited for money you didn’t enjoy. That’s not so hot, especially when you need money for the holidays. Report immediately to your bank’s hotline and if your bank does not immediately act on your complaint, be sure to report immediately to the BSP’s Financial Consumer Affairs Group. Here is their contact details: Financial Consumer Affairs Group
Bangko Sentral ng Pilipinas
 10th Floor, Multistorey Building
Mabini, Manila E-mail address: consumeraffairs@bsp.gov.ph Telephone Nos.: Direct Line (+632) 523-3631 and
Trunkline (+632) 524-7011 local 2584 For more information on current issues and regulations relating to e-banking transactions please visit the
BSP’s official website Also, beware of ATMs that look tampered with, shoulder-surfers in ATM lines (don’t be shy to shield the keypad with your hand or your body), have your card ready so you don’t have to fish around in your bag for your wallet and get distracted, do NOT leave your receipts behind and, most important and most obvious of all, do NOT give your PIN to someone else or ask your maid or driver to withdraw money for you. You won’t believe how many intelligent people I know who do this all the time, although they know it’s definitely a dangerous thing to do. Read BSP’s complete warning here: Click here to read http://business.inquirer.net/money/breakingnews/view_article.php?article_id=109194. Happy New Year!

If you want a discount of P1 per liter on your gasoline and a 50-centavo discount on diesel and kerosene, go bring your four-wheeled or two-wheeled babies now to Shell, Caltex and Eastern Petroleum stations. Playing David to the big three Goliaths, Eastern Petroleum initiated the holiday price cut at 2 pm yesterday (Wednesday), prompting Shell and Petron to follow suit. Problem is, the price cut is only being offered in “selected competitive trading areas” and I have no idea where these are. Errr...just try near your place, will ya? ;-) You have only until Monday to get the discount! Click on this link to read the breaking news article from INQUIRER.net.

Photo courtesy of Michelle Morelos. I never really believed in Santa Claus. But I know all about him, his reindeers and his sleigh. In financial markets, especially in stocks, investors have, year after year, observed a thing called Santa Claus rally. That’s when stocks jump higher in between Christmas and New Year’s Day. No matter how tough the year is, there’s a lift in stock prices whether small or big. Nice gift from Santa, don’t you think? Perhaps it doesn’t really matter why stocks go up during the Christmas season. What matters more is what to do with that rally? Do you grab the chance to sell? If you follow the age-old adage to “buy low and sell high”, it would be best then to avoid at all cost any situation where you have to unload stocks during the Christmas season. Expect this to drag on to January because of what is called “the January effect” when stocks climb even higher in anticipation of more investments from the public. In the next few days in fact, market players expect the PSEi to go higher after Wall Street's rise last Friday. It sounds simple enough to understand, but this article from one of my favorite websites -- MarketWatch -- made me pause and reflect. It says if you have a Christmas windfall, should you really wait for “a good time” to enter the market? According to writer Jonathan Burton, “timing the market” is really an overrated thing. Something that can only be done successfully year in and year out in someone’s dreams. Meaning, if you have a windfall you would like to invest, put it in the market now and just close your eyes! I quote:

The odds of hitting exactly the right moment to invest are extremely remote. Repeating this feat year after year borders on fantasy. Mere market mortals have to be satisfied that stocks, while volatile, go up more often than not and over time will add more to a portfolio than bonds or cash.

Maybe true for the US market. I checked and still can’t find any study in the Philippine market that indicates if this is true. For those who have the keys to the truths in local investing, we mere mortals would be delighted if you can share. It can be a good Christmas gift, and we’ll take it gratefully even if it’s not from Santa :)

After cooking more than seven batches of leche flan, rushing around the malls making last minute gift purchases and with still a few more odds and ends to buy, preparing for Christmas parties and goodies for kids, I’m pooped. I’m giddy with the Holiday whirl and I can imagine that many of you are, too! And traffic shows it, grrr. So, I thought we could all do with some holiday reminders. It’s too easy to be afflicted with temporary moneysmart amnesia when you’re busy untangling Christmas lights and party decors. Double-check your check payments There must be more bounced checks in December than at any time of the year. If you are used to paying with post-dated checks, check now to make sure your December and January checks are funded with cash. Bank charges on insufficient funds are pretty nasty at P2,000 or higher. It may be Christmas season, but I don’t think that’s the kind of gift you want to give to your banker. Oh and here’s the time when having a good speaking relationship with the branch manager in your bank of account can be to your advantage. If you are considered a good enough client, he will call you to warn of an impending bounced check! Stock up on some cash I went around nearby malls to do an ATM check over the weekend and found that BPI and BDO machines are well-stocked with cash, while other ATMs are unfortunately littered with crumpled paper and grumpy customers. In this article, ExpressNet says its network has recorded Tuesday last week the highest withdrawal in its history at P1.8 billion, from P450 million per day on normal days. We already passed the first long holiday weekend, and there’s one more coming. Be sure you have some extra cash on hand, unless you can give tips to your postman already using your credit card! Pay credit card bills on time The temptation to miss credit card payments or pay only the minimum is probably great at this time of the year, but if I were to give just one tip, this would be it: don’t miss your due date and pay in full! If you’re paying by check, make sure you deposit early enough because the float can work against you. For example, if you pay via SM payment centers, your payment usually recorded in the system at night, and then you have to count two to three days before the money is actually credited to your account. Avoid paying on a Friday, at all cost, because the weekend can further aggravate the situation. This article today from our personal finance section also gives seven tips on avoiding the credit card trap. And now, for the most important part of this blog post: Merry Christmas! I hope this season is full of meaning for you and your family!

Avoiding gift-giving gaffes is tricky. Is it proper to give your boss a Christmas gift or will others interpret that as trying to curry favors with the man or woman on top? If you decide that spreading Christmas cheer with a gift is just right during the holidays, what is the right budget for bosses, colleagues and subordinates? This article from our personal finance section says you should remember that what works for one company might not work for another. If you have just moved into a new job, be sure to ask around first. Here are the seven other tips from that article: 1. Make a gift list and set a budget. I always go overboard on gifts and not just on Christmas Day. I just love wrapping presents so much! A gift is not a gift to me without a beautiful ribbon . There’s something about choosing, buying or making and wrapping and presenting the gift that lifts my spirit up. 2. Foodstuffs are always welcome gifts. Easier to give to both ladies and male friends and colleagues too! The most popular ones this Christmas are chocolates, so far as I can tell. 3. Go for gifts recipients can use. Personally, I like giving gifts that people will never buy for themselves but this is a good tip too for the practical side of money-smart peeps. 4. Partner with others for group gifts. Makes sense especially for bosses. 5. Homemade gifts. Definitely not for children. More for the sentimental and mature persons in the universe. Can I now claim that I go for homemade gifts? Heehee. 6. Look for the right size. Since I do a lot of walking around Makati area, I find myself declining Christmas baskets that are very heavy and difficult to lug around. 7. Cash gifts are, again, very tricky. These days, everyone gives little envelopes – from the postman to the utility boy to the messenger who goes to your house only once a year. So what’s the proper amount to put in the envelope? Here’s a little confession. Everybody keeps saying they can’t feel Christmassy anymore. It’s like the warm, fuzzy feeling of Christmas dies when people turn 12. Maybe, it was the Christmas caroling in Binangonan, Rizal that I joined the previous weekend that changed me. Nothing like serenading houses on the side of the road to make your heart soar! You can’t give the gift of cheer without sprinkling some on yourself – so go spend a little and give a little especially of your time and yes, always do these with a smile. Merry Christmas!

I find it remarkable that quite a number of INQUIRER.net readers are raring to invest in local stocks considering that those in more advanced markets are still stumped by subprime worries. From the kind of emails and queries I receive, the gung-ho attitude is not borne of ignorance but of a desire to be part of the action in the capital markets and a hope that owning stocks will make retirement so much better. From what you tell me, I can sense that the "prestige" of playing with stocks is a big part of the equation too. Perhaps some of you are thinking of investing your Christmas windfalls instead of spending them. Or for OFWs, investing will hasten the days for your final homecoming. Investing in equities is a personal choice, and one that might work for some and not for others. To begin, the first thing that you have to do is get a broker. The Philippine Stock Exchange requires investors to be represented by a broker before they can own or sell stocks. For many who are not in the country physically, setting up an account and making phone calls made to brokers can be quite expensive. Online brokerage accounts have become convenient ways of investing in the stock market because communications via email lessen the cost. Secure websites that display personal accounts add to the attractiveness of this option. Ideally, beginners should start with a traditional broker account, says the Philippine Stock Exchange. I was surprised to find that even at P5,000, nowadays, one can already open an account with a brokerage. Just don't expect the broker to be calling you up when he has a hot tip on his plate. For those whose only option to go online, make sure you get an online brokerage that's duly registered with the PSE, that don't charge very steep rates, has secure platforms (you don't want a hacker getting your account details), has good customer service, and has good track record. Here is a list of accredited online brokers and their websites. AB CAPITAL SECURITIES, INC. ACCORD CAPITAL EQUITIES CORPORATION BPI SECURITIES CORPORATION CITISECURITIES, INC. DIVERSIFIED SECURITIES, INC. F. YAP SECURITIES, INC. FIRST METRO SECURITIES BROKERAGE CORPORATION PNB SECURITIES, INC. RCBC SECURITIES, INC. Read this article for more tips on finding a good online stock broker.

Early this year, I ached for a big, flat-screen LCD television set. Yeah, I eventually bought one but a much smaller and more practical unit. Now, I’m aching for something more expensive and a potentially cascading expense: a new home that I can call my very own. For a long time, I believed financial planning experts who say renting a home is not such a bad thing. You are not tempted to make expensive home improvements, don’t pay real estate tax, are not tied down to a particular place, etcetera etcetera. This year, however, my eyes have been straying towards those fancy real estate brochures. Must be my age hehe. I am feeling the urge to have my roots firmly planted somewhere. I’ve visited many different sites as I went house hunting. I’m already dizzy with all the different financing packages and payment schemes. No decision yet, until now. Then Johnny Noet Ravalo’s column today made me wonder if I am missing the opportunity by dilly-dallying. He said current low interest rates make it attractive to buy a condominium or apartment close to where you work, especially with rising gasoline prices and the perennially bad traffic. Developers have also come up with creative and attractive financing packages. I am not really looking so much at the investment aspect, though. Either it’s the sentimental nature of people getting older or watching too much Lifestyle channel in the middle of the night! Of course, I understand that this will ultimately depend on one’s cash position, work and living conditions etcetera. This can work for some and not for others. But it really made me seriously consider what I am missing. What do you think? Am I missing a good opportunity to buy?

(Below is a guest post by Malaya Laraya of Campos, Lanuza & Co. and a Registered Financial Planner. Aside from being an RFP, Aya is also a Certified Securities Representative, a Certified Investment Company Representative and a realtor.  He has written for Business Mirror, MoneySense, Inquirer.net and for Sense and Style.  He also conducts financial education seminars for schools (like DLSU, ADMU, St. Scho, PLM and PWU) and professional organizations (like the Pasay-Makati Realtors Board, Bobson Jeans and PAREB). ) For all of those considering investing in the local stock market, here are a couple of companies that have signified their intention of listing in 2008.   1.  Viva Entertainment Group. Viva is the next media company that is planning to enter the stock market, after GMA7. Slated for listing sometime in the first quarter of 2008, Viva has the advantage of being a well-known name and will surely generate quite a bit of interest for both novice and veteran investors.  Ostensibly, the firm is listing to fund several big movie projects as well as to further branch out into the recording and TV business.  There is actually an off chance they might get listed in January so even at this early stage, there is already talk in the market about this IPO.   2. Cebu Pacific.  Local budget airline Cebu Pacific has also announced its plans to list in the bourse next year. Proceeds from the listing are meant to upgrade and expand their current fleet of planes. This is another issue that is quite well known by the general public so it is to be expected that there will be quite a demand for this issue as well. There are a couple of other firms that have signified their intentions to list but so far, these two have generated the most interest so far.  For those interested, here are a couple of things to keep in mind when getting into IPO's.   First, if you are a new client, do not expect to get a lot of shares from a broker.  This is because, it is completely up to a broker who they will give shares to.  Furthermore, a broker can actually keep most, if not all, of an IPO for it's own accounts.  Consequently, small investors are encouraged to subscribe via the Small Investor's Program.  Details of this can be found via the PSE's website.  However, do keep in mind that even if you subscribe through the SIP, you will still have to sell your shares through a broker.   Second, company officers and insiders are prohibited from selling their shares for six months after the listing.  So, you can expect a slight dip in prices at around that time. Third, regardless of what you may have heard, IPO's are NOT a sure or guaranteed investments.  You CAN lose quite a bit of your principal -- especially if you invest in an overpriced or speculative company.   Last, if you get an allocation, make sure you decide whether you are in it for the long haul.  Do not dilly-dally between a long or short-term position as that is one of the easiest ways to lose money in the stock market. I scanned these photos from very old newspapers (1970s) showing what it was like in the stock exchange during those days. Instead of the electronic trading board, they were using blackboard and chalk! It must have been interesting to see how dangerous an eraser can be in those days for brokers. Photos courtesy of the Lopez Memorial Museum in Ortigas.)

From the looks of it, Gnoysa is likely to win the forex trading game with a P41.56 forecast for end of December! The peso on Wednesday breached the P41 level, hitting P41.99 before closing at P42.03 against the dollar. When the forex market opened this morning, the peso was at P41.90 again and the weighted average as of 10.44 a.m. today was P41.887 to the dollar. Both inflows from overseas Filipino workers sending money home for the holidays and investors taking positions in the stock market lifted the peso further. And because we all expect the money to continue to come in, this only means you gotta get ready to see the peso rising even more in the next weeks. Former Socioeconomic Planning Secretary Felipe Medalla sees a P38 to a dollar scenario as a very likely one in the coming months, unless the government adopts the right policy mix to keep the peso from appreciating. Medalla thinks that if the national government decides to become a big buyer of dollars and use these to prepay its dollar-denominated debt, the local currency might slow down its appreciation enough to keep exporters and OFWs from suffering more. He tells me that this, of course, should be closely coordinated with the Bangko Sentral ng Pilipinas, so that there are no surprises, I suppose in terms of volatility. The monetary police have an unviable job. Can you imagine how hard it would be to manage everyone’s expectations on the currency? On the one hand, the spike in global oil prices would fry us all if the peso has not appreciated. Imports are also cheaper, and this might make our Christmas expenses a lot lower. On the other hand, as everyone has been saying, OFWs are really feeling the pinch and so are dollar-earning industries like the call center business. Medalla, with his usual wit and candor, says the government could try two more options. Peg the peso to two or three currencies like the euro and yen, or use capital controls – that’s economist-speak for controlling the inflow and outflow of short-term money. These two other options, of course, carry with them their own difficulties. Like who chooses which foreign money should come in and which should stay out? Or which currencies should the peso be pegged to? I don’t know about you, but I think these two options are radical to begin with and would most like turn off the conservative guys up there in Bangko Sentral. In the meantime, enjoy the day and focus on simple things to enjoy like family, the upcoming holidays and friends.

We got a very interesting question from a reader and Noet Ravalo has answered it in his column today.

I am now 69 years old and still working. But my saving is only P100,000. Will the government continue to impose tax on my saving in the bank? Where is the logic here? — Rose

Most people have mixed feelings about taxes. From an intellectual standpoint, we all know that if the government stops collecting taxes tomorrow, for example, life as we know it will drastically change. But on a personal level, who wants to pay more taxes? The government, however, collects more taxes from us than many of us think. If you have deposits in the bank and it earns, say, P100 at the end of the year, you will get only P80 credited to your account. You lost P20 to tax on interest earnings. Deposits in other currencies, say in dollars or yen, are charged the foreign currency deposit unit tax of 7.5%. But if you are an OFW or a foreigner who opened your account here in the country but no longer lives here, make sure you get an exemption from the BIR from the FCDU tax. I know of a senior couple that owns a small farm in Mindanao. They wanted to open a bank account with a P3,000 cash gift they received recently. Their daughter discouraged them. What for? A deposit like that will earn almost nothing. Assuming they add to it, any interest they will earn, if any at all, will be automatically deducted with a 20% tax. Since many salaried Filipinos use their bank accounts as an extension of their wallets and hardly check their statements, this tax on interest earnings is almost invisible. If you have savings or checking account statements, you would be surprised at how much you have paid over the course of, say, five years! Senator Loren Legarda recently sponsored Senate Bill 269 which seeks to exempt senior citizens from the 20% tax on bank savings. Depatment of Finance Secretary Gary Teves said only rich senior citizens would benefit from the proposal because the poor don’t have any savings at all. The DoF also warns that the exemption could be exploited by younger members of the senior citizen’s family. Unfortunately, it seems that there is no way to know if Teves is right because the Finance department has no official figures on the savings profile of senior citizens. That would be a big help. In the meantime, we all just have to pay our taxes, whether it’s a pleasant experience or not. Click on this link for Noet's full column on taxes on deposits, and don't miss the onions!

What do you give to someone who has everything?A few Christmases ago, Synergeia Foundation president Milwida Guevara found herself worrying what to give to Washington Sycip for Christmas. Apart from being a well-known figure in the business sector, Wash is one of the reasons Synergeia can do so much work in the education sector, Milwida says. (If you are interested in reading more about this very interesting man, read my favorite professor's blog post on him here. Butch Dalisay finished his biography on Wash Sycip just this year.) After agonizing about her problem, Milwida bought Wash a toy train that moves on its tracks. You know the type, either your son wants one or your husband does. :) “He was so happy with it, he played with it in his office and called his staff to look at the train,” Milwida told me, laughing. When I asked Mr. Sycip last week about his toy train, his warm laugh spoke volumes of how much he loved it! Finding the right gift is an art. Some people plan gift-giving for weeks; some do it on the day before Christmas Eve. Here are some ideas that would last longer than toys, clothes, iPods or iPhones and could start your loved ones on the road to financial security.

• Savings accounts
• Investment gifts (mutual funds, UITFs, stocks or bonds)
• An appointment with an investment planner
• Books and magazines on personal finance and money management. (MoneySense’s gift subscription for one year is P648. The address label on every issue will bear the name of the sender. Email info@moneysense.com.ph and include your name, address, telephone number, email, age, company and position. Payments can be made through any BPI branch. Visit www.moneysense.com.ph for more details.)
• Seats to a personal finance seminar
• Money management software
• Your time (a one-on-one dinner in a special restaurant to talk about goals and dreams sounds nice!)
• Donations to a charitable institution

Read our personal finance article for today to know more tips about finding the right gift for financial security. So, be wise in your gift-giving and be money-smart!

MY apologies to our non-Filipino speaking readers. This is an article in Filipino sent to me by stock broker-friend Rodney Lim right after the Makati stand-off last Friday, which affected the stock market and the foreign exchange market. I could translate it to English, but a lot of the funny stuff will get lost in translation. This is just for laughs guys; nothing is factual in this article. Enjoy the week ahead! According to sources from an asylum in Mandaluyong, this mobile phone conversation happened in Manila Pen. Senator Trillanes: Pare, nasan ka na, nakareserve na ako ng room para sa iyo dito. Five star pa ang accommodations ko. Royette Padilla: Pare pasensiya na pero kausap ko pa si Pareng Bill Clinton, inaayos namin ang mga supporters na babarikada diyan. ST: Pare bilisan mo naman, binigyan tayo ng three p.m. deadline ni Ate Glo pero wala ka pa… sayang naman ang pagtulong namin sa pagtakas mo sa rehab kung di ka makakarating. RP: Bad trip nga yang si mama eh, lumabas ba naman sa Showbiz Central tuloy alam na ng pamahalaan na tumakas ako, kaya nahihirapan ako papuntahin ang H-World diyan, relax ka lang. ST: Paano ako marerelax eh etong si Lolo Guingona titig ng titig sa akin, gusto yatang piliin ko siyang maging vice-president ko. Kinakabahan na nga ako, tumataas ang balahibo ko kung di lang malakas ang three-flowers pomade na gamit ko baka parang nakuryente na ang buhok ko. Pansinin mo ko sa TV videos, di man lang nagugulo ang buhok ko di ba? RP: Oo nga eh, pare plantsado talaga ang buhok mo, pero pare hinay hinay sa pagsasalita at halatang kinakabahan ka, tuwing lumulunok ka napapansin ng mga tao na tatlo na ang Adam’s apple mo, sundalo ka pa naman, di ba dapat matapang ka? ST: Pare, matapang naman ako ah, kita mo nga di pa ako bumibigay, umaandar pa ang mga camera dito, kaya pakitang tapang ako. Alam mo naman ngayon ang Senado, puro action stars. Siguro papapupuin na nila ako kasama sina Senator Lapid, Senator Revilla and Senator Estrada kung makita nila ngayon ang action scenes ko dito. RP: Pare, asa ka pa, lahat yang mga sinabi mo walang batbat sa utol kong si Binoy, yan siguradong senador, kaso busy lang siyang kababantay sa utol naming si Rustom, alam mo naman si Binoy kabadong ma dehado ang aming utol. Kaya nga ako nakatakas kasi iba na ang binabantayan niya. ST: Ay oo nga, kung sinali lang ako ng kuya mo sa mga pelikula niya, kahit yung Karaoke King, di ko na kailangang mag mutiny sa Oakwood para maging senador, kahit sidekick lang niya pwede na. RP: Sensiya na pare, kaso comedy yung pelikula na yun eh, di ka bagay, mas bagay yung kasama mo sa Oakwood na magaling magpatawa. ST: Pare naman he should have given me a chance, the same way that the Filipino people should give me a chance to be their President di ba? RP: Teka lang, papunta na ako diyan, nasa Ayala Avenue na ako pero ayaw gumalaw ang traffic eh. ST: Bilisan mo at naluluha na ako dito sa kahihintay sa iyo. RP: Di kaya dahil sa tear gas yan? ST: Oo nga noh, teka nandiyan na sila, nandiyan na, got to go… RP: Wag mong kalimutan na kunan ako ng tuwalya at ng toothbrush ng Manila Pen ha? ST: (Line went dead) Editor's note: You gotta try the uber cool 3D Interactive walkthrough at the Makati Standoff site. Click here: www.inquirer.net/specialreports/makatistandoff/vr.php.