So, we make money mistakes. Big deal. What matters is what we do to recover and learn from them.

One MoneySmart reader, I will call him Danny, made a credit card mistake in the past enough to put him on banks’ negative list. The misdeed technically was his brother’s, who used his credit card to buy a computer and promised to pay him monthly.

You probably guessed what came next. His brother failed to pay, and the P18,000 debt ballooned to P30,000 within a year. Danny paid everything by 2004, but by that time, his name was already hot listed.
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(You wouldn’t want anybody nosing around your personal information but you would like to know if other people think your credit score stinks, and why! Photo courtesy of Aladdin Cordero.)

If you are worried about the smokes and mirrors surrounding your official credit score, or believe that after a bad credit spell banks should give you a chance, here’s something that might cheer you up.

President Gloria Macapagal-Arroyo will sign today Republic Act 9510 or the Credit Information Act, which will create a credit bureau called Central Credit Information Corp.

The CCIC will pool data from banks, quasi-banks and their subsidiaries and affiliates, life insurance companies, credit card firms, government lending institutions and other credit facilities.
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I have heard so much about the Bank of the Philippine Island’s web facilities. Wearing the hat of a consumer, I have been impressed by their technological innovations ever since I can remember (ATM, phone banking) so I wasn’t surprised when I heard from many of my interviewees that they find its online service very helpful especially when they are abroad.

I finally got around to registering for an online account last week and sat in front of my laptop, pregnant with anticipation.

First try: site undergoing maintenance. Please call 89-100.
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Michael Manuel and J. Edmond Garcia of Sunlife

With Banco de Oro posting a P1.3-billion loss in the third quarter due to its exposure to bankrupt Lehman Brothers there’s bound to be questions on how the banking industry will fare as a whole, considering that this crisis has its roots in the financial sector.

Here is the transcript of portions of a recent interview I had with J. Edmond Garcia, director for investments of Sun Life Financial Philippines, and Michael G. Manuel, chief investment officer of the same company. These guys have been watching different sectors of the Philippine economy closely since they were stock analysts more than 10 years ago.

MoneySmarts: What are your thoughts about how this crisis will affect the Philippines and the financial sector here?

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Our reporter in Malacanang, Joel Guinto, reported just now that President Gloria Macapagal-Arroyo has approved a move to raise deposit insurance coverage to P1 million from the current P250,000.

This would still require new legislation. If approved by both houses, this move will increase confidence in the banking system by time deposit-loving Filipinos.

Deposit insurance simply means if a bank goes pfft, you can still get your deposit up to P1 million from the Philippine Deposit Insurance Corp. There are, however, several common misconceptions about deposit insurance.
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Photo courtesy of Endless Studio

This is a guest post from Karen Galarpe, who also writes for our entrepreneurship blog Open for Business:

I went out one morning to pay my Social Security System contribution. Since I am self-employed, I pay my contributions myself to the banks. BDO, the bank I have an account with, does not accept SSS and Philhealth payments, so I have to go to other banks.

I usually go to RCBC Savings Bank on Visayas Ave. (near front of Montessori) because there’s hardly any line there. I think the last time I paid there was July. As of then, it was still free to pay your SSS contributions over the counter. For the next months, I went to East West Bank and UCPB (depends on where I am that day). On this particular day, I went again to that RCBC Savings branch. And the male teller said they’re now charging P10 just so I can pay my SSS contribution over the counter!
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(Photo courtesy of Kleyr)

Since the Personal Equity Retirement Account (PERA) Bill was signed by President Gloria Macapagal-Arroyo last August 22, 2008, those who have been conscious savers and investors were fairly bursting at the seams with excitement.

Ah, the joys of tax-free savings and investments. It’s enough to make hearts skip a beat despite the gloomy global environment.

But wait. This news should be something that excites the nation as a whole. Particularly OFWs and their families. I don’t see that happening. Yet. Let’s see what we can do with that.
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Wall Street giant Lehman Brothers has fallen, Merrill Lynch has sunk into the arms of Bank of America and traders smell blood from global insurer AIG. Who’s next?

The New York Times has called this one of the most dramatic days in Wall Street’s history. The whole thing brings ominous tidings, says Fortune magazine. Expect more dramatic articles in the coming days as the media is whipped up into a writing frenzy.

Lehman employs around 3,000 staff in Asia and everyone must be on pins and needles waiting to find out what will happen to them. On the local front, only AIG among the big names mentioned in the news today, has a big consumer base in the Philippines, Philamlife being a member-organization of the insurer. (UPDATE: My local source says Philamlife has its own financial resources and will not be affected much by AIG’s troubles. I am waiting for an official statement from the company.)

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What do you do with expired credit cards when the newer, shinier ones arrive in the mail?

Cut them up. Into tiny pieces. I had a few of them hidden somewhere in the house, not knowing what to do with them. After several years, I finally discovered that the official advice is to make sure nobody can duplicate them and with some, err, creativity, put their shopping bill under your tab.

This is probably one of the little things that credit card companies forget to advise their customers, or perhaps I just didn’t pay much attention. But these days, you can’t be too careful about protecting your identity. Remember that Filipinos are geniuses when it comes to IT crimes! Remember the “I love you” virus?
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Picture this. Assigned bank officers from 38 universal and commercial banks enter names of erring borrowers into their negative lists, send these files to the Bankers Association of the Philippines on a regular basis via file transfer protocol, and the BAP sends the file back to the banks so they can use the database for deciding whose credit application to approve or to junk.

Frightening? What really goes on after these files are modified? Too many points for human errors and no way yet for individual borrowers to conveniently check whether they have hits on their names and whether the hits are justified. That’s why everybody’s waiting for the credit bureau, where transparency will make it possible for people to check their credit score.

I got this email from a reader who is concerned about a hit on his name and interviewed Topper Coronel, executive director of the BAP, to clear things up. The email sender’s name has been changed upon his request.
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