Know your SSS!

Do you know that most of us can’t avail of housing loans from the Social Security System anymore?  Though I have not applied (thus have not been rejected) for this loan, it came as a surprise to me.  The fact is, many of us are not familiar with this agency’s updated products and services, and for those of us in the private sector who are SSS members, this may be our loss.

I thought it was an opportune time to invite a top SSS official to the TV show Business & Leisure. Vice president May Catherine Ciriaco came for a one-on-one interview and was happy to do so because they had something new to offer to our “kababayans” who may be recent calamity victims and wanted to share this with television viewers:

The SSS Calamity Relief Package may not seem significant to others, but for those who lost their house or their livelihood, the aid is welcome like manna. For pensioners in calamity areas for instance, they are allowed to advance three month’s pension to tide them over, and because of Yolanda, this was extended to six months’ worth of advance pension.

There is also the Salary Loan Renewal Program for those who still have outstanding salary loans with SSS. Such salary loans normally take two years to pay, but if records will show that you have paid at least half (one year), SSS allows the renewal of the loan and even waives the one percent service fee for the calamity victims.

Previously, there was a condonation program sponsored by this agency for certain bad loans, and one of the conditions was that the SSS member cannot avail of new loans within 10 months of availment of the condonation program. With the recent calamities, SSS has opened its doors to the hapless typhoon victims even if they have availed of the condonation within the 10 month window.

If you have never availed of any loan with SSS, there is also something for first time loaners.  Assuming that you already have enough contributions to qualify, you can avail of a one- or two-month loan, and the one percent service fee will be waived.

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Many southern residents realized their worst fears when their entire house was demolished like matchsticks by the rains and the raging ocean. The House Repair and Improvement Loan of the SSS gives as much as P1 millionfor such purposes, with interest rates reduced from the usual nine percent p.a. to six percent p.a. On top of this, the service fee ofP3,000 is likewise waived. Where before the agency required a loan applicant to have all the necessary requirements within three months of the calamity, this period is now extended to one year for one to avail of the Calamity Relief Program.

What are needed to apply for this relief program?

The applicant must be a resident of an area declared by the National Disaster Risk Reduction Council as a calamity area, and this must be validated by a certification from the pertinent barangay of this calamity-declared area.

In the recent case of Glenda, for instance, these areas include the Calabarzon area, Samar, Camarines Norte/Camarines Sur, Albay and actually Metro Manila.

For those who wish to apply for salary loans, the following must be presented:

• Social Security System or Unified SSS ID.

• Certification from one’s barangay that applicant is a resident of the area and was actually affected by the calamity.

• For OFWs whose immediate family live in the affected areas:  an undertaking from the OFW who is an active SSS member in behalf of his family and a certification from the barangay (officially declared calamitous area) where the family lives.

I think the SSS has actually eased the burden considerably for their calamity-stricken members with such easy documentary requirements, and the program package was put together with no time wasted.  Kudos!

Now to go back to the first paragraph of this column. As explained by Ms. May Catherine Ciriaco, this agency’s housing loan program was originally designed as a supplement to the government’s existing housing program. With Pag-ibig’s funding and assets deemed sufficient to address the national housing needs now, the Social Security System has now shifted its focus to servicing two other large sectors.

SSS is now limiting their direct housing loans to overseas Filipino workers (OFWs) and bona fide members of trade unions only.  For SSS members who wish to apply for housing loans, they must apply with banks for such loans.  Although SSS is open to financing such loans, it is entirely up to the bank to determine the loan value as well as the applicant’s eligibility for a loan though its own credit investigation. I don’t know exactly when this was adopted, but like many, this is entirely new to me.

Some sectors are entertaining doubts about this agency’s lifespan, fearing that when their turn as pensioners comes, the SSS coffers will be empty. Currently, there are 1.9 million pensioners in the SSS roster, 70 percent of whom are senior citizens. SSS has assets valued at P420 billion, and by the reckoning of their actuarians, these assets are sufficient to pay for SSS claims up to year 2043.  This actuarial valuation should ease the minds of many, seeing that we have 29 years to go of worry-free SSS membership. Incidentally, a deceased pensioner’s widow will continue to receive a lifetime pension for the deceased member.

There are 31 million SSS members as of now, and you will be pleased to know that aside from the regular pension benefits, an SSS member can also benefit from the Employees Compensation Fund if his injury or death is work-related. If, for instance, you meet an accident on the way to your regular work, you can actually apply for ECC benefits aside from your regular SSS benefits.

As a bonus to our readers/viewers, the SSS VP made an advance notice:  next month is the anniversary of SSS and to mark this, they are launching the Voluntary Provident Fund. While this was previously made available only to OFWs, anyone now who wishes to increase his monthly SSS contributions in order to avail of a higher pension when he/she retires may already do so.  In anticipation of more benefits in the future as the senior years creep in, they can opt to contribute more than the current ceiling of P16,000.

Mabuhay!!! Be proud to be a Filipino.

For comments (email) businessleisure-star@stv.com.ph / sunshine.television@yahoo.com

source:  BUSINESS LEISURE By Ray Butch Gamboa (The Philippine Star)

Filipinos shown less inclined to tech courses

FEWER Filipinos in the United States appear interested in science, technology, engineering, and math (STEM) courses compared to other foreign enrollees, according to Washington-based Brookings Instititution, which culled data on study visas issued to foreign students from 2008 to 2012.

Nearly 30% of Filipinos granted F-1 (full-time student) visas from 2008 to 2012 (1,306 of 4,370) were primarily taking up “business, management, marketing, and related support services,” said the report that was authored by Neil G. Ruiz, senior policy analyst and associate fellow at the Brookings Institution Metropolitan Policy Program.

The report can be accessed at the think tank’s Web site at:http://www.brookings.edu/research/interactives/2014/geography-of-foreign-students#/M10420.

According to the report, barely one in five Filipinos studying in US schools or 19.8% are enrolled in science, technology, engineering, or math courses (STEM). In comparison, more than a third -- or 37% -- of all foreign students take up STEM.

The study may underscore a dearth of Filipinos qualified to empower the Philippines in emerging fields relevant to innovation, research and development, science and technology, industry, and manufacturing.

These findings seem to correlate with data from the Commission on Higher Education (CHEd).

Enrollment in Science, Technology, Engineering, Agriculture, and Mathematics (STEAM) was at 549,107 or 17.51% of total enrollment in undergraduate programs in academic year 2013-2014. This figure is slightly higher than 541,728 or 16% for the 2012-2013 schoolyear.

A check with CHEd showed the agency has increased funding for financial assistance to students enrolling in such priority fields.

Getting there

Sought for comment, American Chamber of Commerce of the Philippines senior adviser John D. Forbes said “the Philippine economy has yet to reach the stage of industrialization.”

“No economy has become developed without industry. Therefore the Philippines should make increased efforts to increase its graduates both at home and studying overseas in engineering, math, and related fields,” Mr. Forbes said by phone.

More Filipino students will take STEM courses abroad “as the country progresses,” Alfredo M. Yao, Philippine Chamber of Commerce and Industries, Inc. president, said separately.

“You can’t force the flow of water. As the country progresses and with all these things in manufacturing coming up, more students will take up those courses,” Mr. Yao said by phone. -- InterAksyon.com and BusinessWorld staff

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source: Businessworld

Philippines found among most restrictive

THE PHILIPPINES has the most restrictive environment for foreign investments in Southeast Asia, the Organization for Economic Cooperation and Development (OECD) said in a recent report, warning this could prevent the country from enjoying an expected surge of new money from investors now taking a closer look at the region.

In a report, titled: Southeast Asia Investment Policy Perspectives that was published last June, the 34-country group -- whose members include France, Germany, Japan, Mexico, South Korea, the United Kingdom and the United States -- cited its own FDI (foreign direct investment) Regulatory Restrictiveness Index showing the Philippines also as the most restrictive among 64 developed and developing countries. The index measures restrictiveness of FDI rules across 22 sectors, including agriculture, mining, electricity, manufacturing, as well as “main services” like transport, construction, distribution, communications, real estate, financial and professional services.

The report noted that Southeast Asia’s FDI prospects have improved in the last two decades due to the relatively strong economic growth of the region’s economies.

“Partly in response to these growth prospects and the rising middle class in one of the world’s most dynamic markets, direct investment in ASEAN (Association of Southeast Asian Nations) -- both from outside and within the region -- is likely to be at record levels for many countries over the next few years,” the report read.

“Southeast Asia was the only region to see rising inflows of foreign direct investments in 2012, while global flows fell 6%.”

However, benefits from such favorable scenario will not be equally distributed in ASEAN due to restrictions imposed by member states, OECD said.

In Southeast Asia, the Philippines and Myanmar were tagged as having the most restrictions for FDIs.

“In the Philippines, many restrictions on foreign equity and land ownership remain,” the report noted.

“The 1987 Constitution has a clause that supports laws restricting foreign ownership of property to 40%, with minor adjustments by subsequent laws. Further reforms in foreign access to local land require constitutional amendments,” the report noted.

Moreover, OECD cited the country’s restrictions on foreign ownership of banks, retail enterprises, telecommunications, and transport companies.

It should be noted, however, that the report was published prior to the enactment of the Republic Act No. 10641, or “An Act Allowing the Full Entry of Foreign Banks in the Philippines”, by President Benigno S.C. Aquino III last July.

‘LESS APPEAL’
Singapore was deemed the most open to FDI in the region, with OECD noting that the city-state is “often the first choice as a location by a wide margin.”

From the perspective of OECD investors, Thailand, Malaysia, and Indonesia come next to Singapore, while the Philippines and Vietnam have “less appeal to OECD investors.”

Meanwhile, Cambodia, Laos, and Myanmar are likely to be export-oriented in the medium term given their vast wealth of mineral and waters resources and a pool of relatively cheap labor, the OECD noted.

The findings of the report jibe with the results of the latest Global Competitiveness Report of the World Economic Forum, which evaluated 144 economies based on 12 “pillars of competitiveness” that drive productivity.

Singapore led the region in terms of business impact of rules on FDI -- one of the indicators used by the Forum to rank the economies surveyed -- followed by Malaysia, Thailand, Cambodia, Laos, Vietnam, Indonesia, the Philippines and Myanmar.

Sought for comment, Guillermo M. Luz, National Competitiveness Council private sector co-chairman, said: “Yes, we have a lot of foreign ownership restrictions which are very challenging for the business community.”

“However, we have to be very careful in pursuing economic amendments to the Constitution,” Mr. Luz warned in a text message.

“The current proposal will toss everything to Congress and that will put the entire burden on legislators. With all the bills they have to pass -- which are equally important -- then the amendments might take a long time to get passed.”

Asked if the OECD report bolsters the case for amending foreign ownership restrictions of the Constitution, House Speaker Feliciano R. Belmonte, Jr. replied via text: “Definitely.”

Mr. Belmonte had filed the Resolution of Both Houses (RBH) No. 1 at the start of the 16th Congress in July last year which seeks to add the phrase “unless otherwise provided by law” to provisions of the current Constitution that impose restrictions to foreign ownership and business participation, particularly for land, public utilities, natural resources, as well as media and advertising.

Mr. Belmonte has said that lifting such restrictions was critical to achieving the government’s goal of inclusive growth, since more FDIs are expected to result in additional quality jobs that, in turn, will lift more Filipinos out of poverty.

Plenary debates on RBH No. 1 are ongoing at the House of Representatives.

CONTROVERSIAL
Charter change has been proposed as early as the 1990s, but these efforts never prospered over fears that public officials would use it as an opportunity to extend their terms of office.

To allay fears that the current move to amend the Constitution could be used to extend the term of incumbent elected officials, Mr. Belmonte led the signing of a pledge at the House that committed legislators to introduce changes only for the charter’s economic provisions.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that net FDI inflows as of May amounted to $2.923 billion, 34% higher than the $2.182 billion registered in the same five months last year.

In May alone, net inflows reached $473 million, a turnaround from the $62-million net outflow recorded in the same month last year, BSP data showed further.

The increase, the central bank said, reflected “investors’ confidence in the country’s sound macroeconomic fundamentals.”

FDI net inflows reached $3.86 billion last year, 20% more than the $3.215 billion recorded in 2012 and breaching the central bank’s full-year forecast of $2.1 billion.

For this year, the central bank expects net FDI inflows to reach $1 billion, down from the initial estimate of $2.6 billion -- a drop the central bank said would be due to continued global financial market uncertainties.

source:  Businessworld

One person commits suicide every 40 seconds: WHO

GENEVA: One person commits suicide every 40 seconds, an avoidable tragedy that fails to grab attention because of taboos and stigma, a UN report said Thursday.

In a study released three weeks after the apparent suicide of Hollywood great Robin Williams, the World Health Organization also warned that media reporting of suicide details raises the risk of copycat behavior.

“Every suicide is a tragedy. It is estimated that over 800 000 people die by suicide and that there are many suicide attempts for each death,” said WHO chief Margaret Chan in the landmark report capping a decade of research.

“The impact on families, friends and communities is devastating and far-reaching, even long after persons dear to them have taken their own lives,” she added.

WHO, which called suicide a major public health problem that must be confronted and stemmed, studied 172 countries to produce the report.

It said that in 2012 high-income countries had a slightly higher suicide rate—12.7 per 100,000 people, versus 11.2 in low- and middle-income nations.

But given the latter category’s far higher population, they accounted for three-quarters of the global total.

Southeast Asia—which in WHO-speak includes countries such as North Korea, India, Indonesia and Nepal—made up over a third of the annual.

Suicides in high-income countries, meanwhile, accounted for around a quarter of the global figure.

The most frequently used methods globally are pesticide poisoning, hanging and firearms, but jumping from buildings is a common method in highly urbanized areas in Asia.

WHO cautioned that suicide figures are often sketchy, with less than half of those nations keeping clear tallies.

As a result, it said, it crunched a range of data to enable it to craft country-by-country estimates of the suicide rate.

The global rate was put at 11.4 per 100,000, with men almost twice as likely as women to take their own lives.

The most suicide-prone countries were Guyana (44.2 per 100,000), followed by North and South Korea (38.5 and 28.9 respectively).

Next came Sri Lanka (28.8), Lithuania (28.2), Suriname (27.8), Mozambique (27.4), Nepal and Tanzania (24.9 each), Burundi (23.1), India (21.1) and South Sudan (19.8).

In their wake were Russia and Uganda (both with 19.5), Hungary (19.1), Japan (18.5) and Belarus (18.3).

Lurid details stoke suicide

In high-income countries, mental disorders such as depression were present in up to 90 percent of people who died by suicide, compared with around 60 percent in countries such as China and India, WHO said.

The UN agency said its goal by 2020 was to cut national suicide rates by 10 percent.

But a major challenge, it said, is that suicide victims are often from marginalized groups of the population, many of them poor and vulnerable to a string of pressures.And low-income countries whose health systems already struggle to deal with infectious diseases have particular difficulty detecting and helping people at risk of killing themselves.

“Suicides are preventable,” said Chan.

“This report encourages countries to continue the good work where it is already ongoing and to place suicide prevention high on the agenda, regardless of where a country stands currently in terms of suicide rate or suicide prevention activities,” she added.

Experts have repeatedly castigated the media and social network users for giving lurid details of suicides, whether of celebrities such as Williams or unknown individuals who killed themselves in a bizarre fashion.

“Inappropriate media reporting practices can sensationalize and glamorize suicide and increase the risk of ‘copycat’ suicides,” the report said.

“Media practices are inappropriate when they gratuitously cover celebrity suicides, report unusual methods of suicide or suicide clusters, show pictures or information about the method used, or normalize suicide as an acceptable response to crisis or adversity,” it said.

AFP

source:  Manila Times

Pitching in for inclusive growth

I’m often asked what needs to be done for our country to achieve inclusive growth, or economic growth with widest participation and whose attendant benefits are felt by all. We all know our economy has lately been growing faster than most in the region, but having that growth come from a broader base and uplift the lives of the least endowed among us remains elusive.

What will bring about more inclusive growth in the economy? We need more of our economy’s growth to come from sectoral inclusive growth drivers. And to be an effective driver of inclusive growth, an economic sector must meet two important criteria:

One, the sector must be job-rich or labor-intensive. It must employ large numbers of workers, such that growth in the sector will also translate into similar growth in jobs. A sad commentary to the lack of inclusiveness in our 2013 economic growth is the fact that while the economy grew by a hefty 7.2 percent, the number of jobs actually grew by a mere 0.17 percent then.

Two, the sector must have strong and wide interlinkages with the rest of the domestic economy. That is, it must rely on other domestic industries for its inputs such as raw materials and intermediate goods (backward linkages), and/or its products must find use as inputs by other domestic industries (forward linkages). Growth in such a highly interlinked sector would thus have greater multiplier effects, hence broader benefits. Our electronics sector satisfies the employment criterion, but not the linkages criterion. Note that our top export is electronics (mainly intermediate products like circuit boards and semiconductors), but our top import is also electronics (more basic components that we assemble into the products we export). This implies that the value added by our domestic economy in our top export is confined to assembly labor. There has been wide consensus that agriculture/agribusiness, tourism and manufacturing are the sectors that best satisfy the two criteria, hence are the most potent drivers of inclusive growth.

An inclusive economy is also one where micro, small and medium enterprises (MSMEs) are strong contributors to total employment and economic output. MSMEs comprise 99.6 percent of all firms in the country and contribute an estimated 61 percent of all jobs. But they account for only 32 percent of total value added or gross domestic product (GDP). This means that the top 0.4 percent of our firms already account for 68 percent (more than two-thirds) of our total economic output and incomes. A 2008 Indonesian study showed the Philippines’ 32 percent SME GDP share to be the smallest among its neighbors, with Indonesia’s SME output share at 57 percent, Malaysia’s and Thailand’s at 47 percent, Vietnam’s at 42 percent, and Singapore’s at 35 percent. The same study cited a 60-percent SME GDP share for China, 55 percent for Japan, and 50 percent for Korea. These comparative data suggest that Philippine SMEs may be lagging in productivity behind their counterparts in our neighbors. This could very well reflect the persistent hurdles faced by our SMEs in terms of access to finance, technology, raw materials and markets. Thus, our lack of inclusive growth relative to our neighbors may simply be mirroring our failure to address the difficulties faced by our SMEs.

Even as government policies and initiatives can have a crucial role in fostering inclusion and broad-based growth, government alone cannot bring it about. I used to be fond of saying that sustainable development is not something government does for its people; rather, it is something that the people collectively attain for themselves. One can very well say the same about inclusive growth. Government can provide the enabling conditions, incentive structures and conducive policy environment, but unless people do their part and take the right actions, inclusive growth will still not come about. All sectors of society can in fact contribute to making inclusive growth and sustainable development a reality.

Big business can pitch in, for example, by venturing more into agribusiness and manufacturing, and move beyond the seeming preference by the country’s wealthiest for services, particularly finance, real estate and utilities. Banks can deliberately help serve the financing needs of the MSME sector more actively. Large firms can also opt for more inclusive value chains, rather than take control of their entire value chain via vertical integration. Known examples are how Jollibee procures onions from hundreds of small farmers around the country, and how Nestlé does the same with coffee. Meanwhile, small firms can do their share by being more willing to cluster together, team up and unite to take advantage of volume demands especially from export markets, rather than be content with staying small in a “kanya-kanya” (individualistic) environment. For their part, workers could take more initiative to help improve productivity at the production floor and the workplace—but employers must also be willing to commensurately reward worker-initiated cost savings and productivity improvements. The youth can pitch in too, by aspiring through their studies not to merely find a job and work for someone else—but instead aspire to eventually create jobs for others. And we consumers can be more conscious and deliberate about patronizing small local businesses whenever we have the choice. I can think of many more ways how each of us can pitch in for inclusive growth; I’m sure the reader can too.

Maybe it’s time we stopped counting too much on government to bring inclusive growth about. We can in fact all start pitching in.

* * *

E-mail: cielito.habito@gmail.com

source:  PH Daily Inquirer

INFOGRAPHIC: Movements in June import categories

The Anne Curtis effect on bank deposits

FILIPINOS are notoriously bad at saving money, a shortcoming made worse by having neighbors with world-class levels of thrift. Data compiled by two Japanese researchers show a Philippine savings rate of 13.8% in the 2001-2007 period, compared with an astonishing 46.3% for Singapore and 46.2% for China. What’s less well-known is that Filipinos used to have a perfectly respectable savings rate of 21.9% in the late 1960s, which peaked at just over 26% in the run-up to the 1980s, worsened during the crisis years of the Marcos government and then, contrary to expectations, worsened even further through the post-EDSA years and the slow climb to prosperity in the present day.

Is the inability to save a function of poverty? The figures don’t seem to bear this theory out: Indonesia had a 29.9% savings rate late in the last decade while Thailand came in at 32.2%. Does one need to be a rich country to know the value of thrift? Not really: war-ravaged Vietnam built up its savings rate from virtually a standing start -- 3.9% in the late 1980s -- to a spectacular 29% by 2007. Whatever the reasons might be for low savings rates, they are likely to be cultural - a desire to enjoy life more, treat friends to dinner, take expensive vacations, and buy the latest luxury goods. Not for nothing are shopping malls booming in the Philippines - it’s hard to think of any other industry that has evolved so perfectly to capture a population’s disposable cash.

What we’re seeing in the data for the Philippines is the unusual combination of a relatively stable state, with a growing economy, in which savings rates persistently refuse to rise, even in good times. No other country in developing Asia can even claim to have seen its savings rate fall compared with the 1960s, though Taiwan’s and Hong Kong’s rates are currently below their historical averages and could dip further. But the point about Taiwan and Hong Kong is that they grew wealthy before they came to adopt relatively profligate habits, while the Philippines is spending its nest egg freely without having even achieved anywhere near the same level of affluence. 

We can get a sense of the desperation of the Philippine savings situation by the signals our banks are sending us. Over the past few years banks have focused their marketing campaigns on attracting depositors - a critical activity, because banks must accumulate deposits in order to lend money. Most have emphasized the ease of doing business or the hassle-free process of opening an account, but one bank -- PSBank -- has take the unique approach of rebuking Filipinos for failing to accumulate the kind of capital they need to live the good life.

Central to the good life, the ads tell us, is the ability to woo beautiful women. And that’s where PSBank endorser Anne Curtis comes in. She’s the actress who since May 2013 has been poking fun at all those hapless suitors who promise women the moon and the stars, without actually having the savings to back up their boasts. Whatever you might think of the sexual politics behind the ads, it’s hard to deny the importance of the message: people need to save more to live out their dreams, see them through retirement, and provide for loved ones in good times and bad. You don’t even need to be a PSBank depositor to benefit from this message: the act of saving more is good for you, no matter where you keep your deposits.

The other great thing about this ad campaign is that its impact can be tracked in the deposits data, which are diligently compiled by the central bank. May 2013 just happened to coincide with the end of a stagnant period in thrift bank deposits dating back to the 2008 financial crisis. The first of these charts show how savings deposits have risen at thrift banks since that point, while the second shows how overall deposits at thrift banks have allowed banks to lend more. 

It’s easy to dismiss the broad rise in overall thrift bank deposits as merely an effect of the growing economy, and there’s no easy way to quantify the exact impact Miss Curtis had on deposit levels. But the data from PSBank itself suggest an overall steady rise in the bank’s savings deposits, with a healthy bump up around the time Miss Curtis joined the campaign. 

This is where we issue the standard warning that correlation is not causation, and remind ourselves of the post hoc, ergo proper hoc fallacy. That said, it’s very rare for banking statistics to share the same space with celebrities, who always add an element of fun to any economic analysis.

No matter what the exact cause, any rise in deposits for a spendthrift country like the Philippines is a good thing, allowing banks to lend more and add fuel to the country’s economic development. Someday we might be able to point to May 2013 as the exact moment when the savings rate took a turn for the better. When the economists write the the book on that momentous event and soberly examine all the factors that might have propelled the turnaround, it's quite possible that some of those scholars will be adventurous enough to consider the impact of a single actress, seductively dressed and cooing into the camera, telling her suitors in no uncertain terms, “No money no honey.”

source:  Businessworld