Customs misses 2015 revenue target

For the 5th straight year, the Bureau of Customs fails to achieve its full-year goal

Despite an increase in revenue collection, the Bureau of Customs (BOC) has been consistent in missing its annual target.

BOC data show that the revenue-generating agency failed to attain its P436-billion ($9.24 billion) revenue goal in 2015 after it only collected P366 billion ($7.76 billion) – a shortfall of P70.56 billion ($1.45 billion) for the year.

Last year’s deficit was the 5th time in a row that the BOC missed its target.

The BOC's collection report also showed that 11 of the country's 17 ports missed their targets. The oil ports of Batangas and Limay posted the highest collection shortage during the period.

The Port of Limay fell short of its P45.27 billion ($959 million) target by P23.21 billion ($492 million), while Batangas only collected P82.32 billion ($1.7 billion) of its P96.03-billion ($2.04 billion) target.

The Port of Manila only collected P58.78 billion ($1.25 billion) out of its P73.07-billion ($1.55 billion) target.

The Manila International Container Port (MICP) and the Ninoy Aquino International Airport (NAIA) fell short of their targets by P13.31 billion ($282 million) and P3.58 billion ($75.9 million), respectively.

Also failing to meet their targets were the ports of San Fernando, Tacloban, Aparri, Subic, and Cagayan de Oro.

The Office of the Commissioner collected a tax expenditure fund (TEF) of P8.38 billion ($177 million), P1.62 billion ($34.3 million) short of its P10-billion ($212 million) target.

But the ports of Legazpi, Iloilo, Cebu, Surigao, Davao, and Clark exceeded their revenue goals.

Cebu, with a revenue target of P15.61 billion ($330 million), collected P16.49 billion ($349 million). Income generated by Davao amounted to P11.68 billion ($247 million), which is P980 million ($20 million) over its target of P10.70 billion ($226.9 million).

Iloilo achieved a surplus of P956.9 million ($20 million), Clark with P85.3 million ($1.8 million), Surigao with P6.4 million ($135,693), and Legaspi with P142.3 million ($3 million). – Rappler.com

Reserves increase at end-2015

THE COUNTRY’S reserves rose at the close of 2015 on the back of higher income realized by the Bangko Sentral ng Pilipinas (BSP) from its investments, among others, but still fell short of the regulator’s yearend projection.

The BSP yesterday said in a statement that the Philippines’ gross international reserves (GIR) stood at $80.614 billion at end-December, higher than the downward-revised $80.173 billion recorded as of November’s close.

This is also better than the $79.54 billion in reserves logged at end-2014.

However, the end-2015 GIR figure was a shade lower than the BSP’s downward-revised projection of $80.7 billion in gross reserves at yearend.

The GIR is composed of central bank assets held in different currencies, gold and special drawing rights (SDR), as well as foreign exchange deposits of the government and state-run firms and income from its overseas investments. It indicates a country’s capability to pay for imports and service foreign debts.

The central bank said the improvement in reserves was “due mainly to the national government’s (NG) net foreign currency deposits as well as the BSP’s foreign exchange operations and its income from investments abroad.”

“These inflows were partially offset by payments made by the NG for its maturing foreign exchange obligations,” the BSP added.

The end-2015 GIR level remains “ample,” the central bank said, as it can cover 10.3 months’ worth of imports of goods and payments of services and income.

The reserves are also equivalent to 5.5 times the country’s short-term external debt based on original maturity, and four times based on residual maturity, the BSP said.

The BSP considers reserves adequate if the level can finance three months’ worth of imports or cover 100% of the country’s foreign liabilities.

Central bank data showed that income from foreign investments went up to $71.723 billion at the year’s close from $70.752 billion at end-November. This was also higher than the $69.96 billion recorded at end-2014.

Reserve positions in the fund also ticked up to $438.6 million from $434.9 million at end-November. However, this was less than the $570.6 million seen the year prior.

Gold holdings also crawled higher to $6.702 billion from $6.7 billion the month previous, but stayed below the $7.483 billion recorded at end-2014.

On the other hand, the BSP’s foreign exchange stock declined to $588.1 million from $1.124 billion the month prior, but was higher than end-2014’s $300.2 million.

SDRs were flat at $1.161 billion at end-December from the November level. However, the end-2015 total was lower than the $1.226 billion seen twelve months prior. 

source:  Businessworld

Only 25% of Filipinos financially literate – S&P

Global survey highlights financial inclusion challenges

Only 25 percent of Filipino adults are financially literate, a Standard & Poor’s (S&P) Ratings Services survey found, highlighting the challenges facing the goal of boosting access to financial services.

An S&P Global Financial Literacy (FinLit) Survey conducted last year found country financial literacy rates ranging from 13 percent to 71 percent among 143 economies, with Yemen at the bottom and Denmark, Sweden and Norway sharing the top spot.

Globally, only one in three adults, or 31 percent, showed an understanding of basic financial concepts such as numeracy, risk diversification, inflation and compound interest (savings and debt.)

“Although financial literacy is higher among the wealthy, well educated, and those who use financial services, it is clear that billions of people are unprepared to deal with rapid changes in the financial landscape,” the survey said.

“Governments are pushing to increase financial inclusion by boosting access to bank accounts and other financial services but, unless people have the necessary financial skills, these opportunities can easily lead to high debt, mortgage defaults, or insolvency,” it added.

“This is especially true for women, the poor, and the less educated—all of whom suffer from low financial literacy and are frequently the target of government programs to expand financial inclusion.”

The survey involved interviews of over 150,000 adults in more than 140 countries.
Data was collected in 2014 as part of the Gallup World Poll and analytical support was provided by researchers at the World Bank and the Global Financial Literacy Excellence Center at George Washington University.

The Philippines accompanied the West Bank and Gaza, Burundi, Vietnam, Bolivia, Turkey, India, Jordan, Honduras, Romania, Macedonia, Uzbekistan, El Salvador, Sierra Leone, Sudan, Iran, Kosovo, Nicaragua, Bangladesh, Kyrgyz Republic, Cambodia, Nepal, Armenia, Haiti, Tajikistan, Angola, Somalia, Afghanistan, Albania and Yemen in the bottom 30 in the survey.

Among the Southeast Asian countries included in the survey, Singapore scored the highest with a financial literacy rate of 59 percent. Cambodia was the lowest at 18 percent and the only other economy to score lower than the Philippines was Vietnam at 24 percent.

A respondent was judged as financially literate if he or she could correctly answer three out of four financial concepts detailed via five multiple-choice questions:

• On risk diversification: “Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?’

• On inflation: “Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?”

• On numeracy: “Suppose you need to borrow $100. Which is the lower amount to pay
back: $105 or $100 plus 3 percent?”

• On compound interest: “Suppose you put your money in the bank for 2 years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did in the first year, or will it add the same amount of money both years.”

• Also on compound interest: “Suppose you had $100 in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove money from the account? More than $150, exactly $150, less than $150, don’t know?”

The correct answers, in order, are multiple businesses/investments, the same as you can buy today, $100 plus 3 percent, more money in the second year and more than 150.

Of the region’s economic powers, China scored 28 percent, Japan 43 percent and South Korea 33 percent. The survey also found that younger Asians were more likely to be financially adept than older respondents.

“While the array of financial products available in Asia continues to grow rapidly, S&P’s FinLit Survey suggests that most consumers lack a general understanding of credit, compound interest and other key concepts,” the ratings firm noted.

Citing China, credit card ownership in the country was said to have nearly doubled since 2011 yet less than half of the respondents could not correctly answer the survey questions on interest.

“We are committed to creating stronger financial markets all over the world,” said Courtney Geduldig, executive vice president of Public Affairs at McGraw Hill Financial, parent of S&P Ratings.

“We believe there are correlations between financial literacy, financial access, and the strength of markets. Addressing financial literacy is a key strategy in building stronger, more accessible and sustainable markets around the globe,” he said.

Matthew Bosrock, executive managing director and head of Asia-Pacific for Standard & Poor’s Ratings Services, said: “Understanding concepts like interest, inflation and the importance of savings are at the core of economic development.”

“A lack of basic financial understanding is one of the factors obstructing faster growth in Asia. This survey gives policymakers the tools to identify the gaps in education and also a chance to improve access to financial products,” he added.

source:  Manila Times

SSS won’t go bankrupt with P2,000 pension increase, lawmaker says

Party-list Rep. Neri Colmenares of Bayan Muna on Tuesday said that Sen. Juan Ponce Enrile’s contention that the Social Security System (SSS) will go bankrupt with the P2,000 pension increase is without basis and can easily be debunked.

“The SSS and Sen. Enrile should stop trying to delude the people that it has no funds for the P2,000 pension increase because this is not true. The SSS board in Congress hearings actually admitted several times that it has the funds for the pension increase. The increase will only shorten its fund life to 2029 instead of the current 2042,” he added.

Assuming this is true, he said, 14 years is more than enough time for the government and SSS to find ways to increase its fund life. In 2001 SSS declared that it has a fund life of only five years and, yet, it was able to increase this to 2042 in just 14 years.

“If it previously survived a five-year fund life, then surely it can also survive a 14-year fund life. Truthfully speaking, we are in a better shape than the United Kingdom, which has a fund life of only up to 2027 and Canada, which has a fund life of 2022 or merely seven years,” Colmenares, also senior deputy minority leader, pointed out.

In fact, he said, SSS has P428 billion in investment fund, which generates an investment income of an average of P32 billion per year.

“With this, the net revenue of SSS in 2014 was a huge P44.47 billion. Its assets amount to nearly P500 billion. Ayaw lang talaga dagdagan ng SSS ang pension ng mga pensioners kaya ganun na lang ang kanyang pag-oppose dito. Mas gusto pa ng SSS na pahabain ang buhay ng pondo niya, kesa buhay ng mga miyembro niya,” Colmenares said.

Instead of harping on increasing contributions,  the lawmaker said the SSS should (1) improve its collection efficiency from the employers of its 29 million members, (2) collect the billions in contributions, which delinquent employers failed to remit in the last 10 years, (3) cut down in bonuses and perks given to its board members and collect the more than P200-million retirement package given to SSS board members in 2009, and (4) collect the fines imposed by the courts against employers who violated the SSS law.

“If this is not enough, then Congress can always provide for subsidies as provided under Section 20 of RA [Republic Act] 8282 as amended. There is no way that the SSS will go bankrupt as the SSS wants people to believe. In fact, under Section 21 the Philippine government guarantees the benefits and solvency of SSS,” Colmenares said.

“The SSS pension increase law does not allow for an increase in premium contribution. So it is best for SSS and Sen. Enrile to support the pension increase and, together, with the government look for means to increase its fund life instead of using nonexistent obstacles to the pension increase. SSS is so obsessed with its funds that it has failed to see that it has completely abandoned its mandate to provide genuine social security to the people.” Colmenares said.

source:  Business Mirror

GIR Reaches $81B in October

Preliminary data showed that the country’s gross international reserves (GIR) rose to $81.14 billion as of end-October 2015, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco announced Friday.

This was slightly higher by $0.59 billion than the end-September 2015 level of $80.55 billion due mainly to the National Government’s (NG) net foreign currency deposits, revaluation adjustments on the BSP’s gold holdings as well as its income from investments abroad. 

These were partially offset by payments made by the NG for its maturing foreign exchange obligations.

The end-October 2015 GIR level remains ample as it can cover 10.4 months’ worth of imports of goods and payments of services and income. 

It is also equivalent to 6.1 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity. 2

Net international reserves (NIR), which refer to the difference between the BSP’s GIR and total short-term liabilities, increased by $0.59 billion to $81.13 billion as of end-October 2015, compared to the end-September 2015 NIR of $80.54 billion.

source:  Malaya

Study shows top concerns of OFWs

OVERSEAS FILIPINOS tagged emergencies, retirement and education as their top concerns in setting aside savings, a survey commissioned by the Philippine American Life and General Insurance Co. (Philam Life) showed, although most savings are coursed in short-term instruments.

A study on overseas Filipino workers (OFWs) conducted by Taylor Nelson Sofres (TNS) last April bared that migrant workers have long-term goals but most of them don’t have long-term investments.

According to the study, 66% of the respondents said their purpose in saving is emergency; 36% said retirement; 33% cited their children’s education; and 22% said investing in a home.

“[W]hen asked about their readiness to stay home permanently, 82% of the survey respondents said they are not ready to stay home for good for two main reasons: they do not have enough savings; and their goals have not yet been realized,” the study said.

The study also showed that an OFW wants to accumulate an average of P3 million to feel he is ready to come back for good; and that it would take the average OFW up to 18 years to save up that amount.

Philam Life said 97% of OFWs save in short-term instruments like savings accounts, while only 7% save in medium-term instruments like personal insurance, pre-need and investments.

“97% utilize bank accounts for savings, 4% in personal life insurance, 2% for nonlife insurance, 1% for pre-need plans and 0.4% for investment portfolio,” the study said.

Only 52% of OFWs also invest their money, the study said, noting that property, jewelry and business undertakings are the top investments for migrant workers.

Philam Life Chief Marketing Officer Jaime Jose M. Javier, Jr. said 10% of Philam Life’s policyholders are OFWs. Its distribution is majority through agency force of over 9,000 agents, he added.

The respondents in the study were mostly on a two-year contract with an average tenure of six years working abroad and earning an average of P50,000 per month.

Philam Life reported an P18.312 billion in premium income in 2014, the third largest in the industry, although down from the previous year’s P19.966 billion, based on its submitted annual statements to the Insurance Commission.

Philam Life’s total assets stood at P226.8 billion, net income was at P5 billion and net worth of P85.2 billion. It has close to 6,000 policyholders and more than 1.7 million insured group members.

source:  Businessworld

Diaspora shield vs capital flight

IF THE UNITED STATES raises interest rates, emerging nations skittish about potential capital outflows do have one key weapon in their arsenal: remittances from national diaspora.

The World Bank says money sent home by workers abroad to countries including Mexico, the Philippines and India will probably reach $427 billion this year, almost as large as the $443 billion in estimated net portfolio inflows.

Remittances, which are forecast to increase to $471 billion in 2017, are three times larger than official development loans and more stable than portfolio inflows, according to the World Bank.

“Remittances are relatively stable and acyclical: they are stable even during episodes of extreme financial volatility and they can help promote consumption stability,” said Dilip Ratha, lead economist for migration and remittances at the World Bank’s Development Prospects Group.

“The relative importance of remittances as a source of external financing, therefore, is expected to increase further in the medium term.”

Workers seeking better paying jobs abroad have long powered consumption and boosted foreign exchange in their home countries.

The Indian community abroad sends home more money than any other group overseas -- $70.4 billion in 2014, or double what the nation attracted through foreign direct investment.

“Growth in private capital flows to developing countries might well moderate when interest rates begin rising in advanced economies, or if growth in developing economies remains weak,” Mr. Ratha said. -- Bloomberg