By Paolo Romero (The Philippine Star) Updated May 07, 2012 12:00 AM Comments (0)

MANILA, Philippines - A lawmaker has called for the creation of a government body to regulate dozens of health maintenance organizations (HMOs).

In House Bill 6025, Quezon City Rep. Winston Castelo proposes the creation of the independent Health Management Organizations Regulatory Commission to exercise control, supervision, and authority over HMOs nationwide.

Castelo said except for a “clearance to operate” issued by the Department of Health, HMOs have been largely unregulated.

“There must be a regulatory commission to take charge of the multifaceted problems that now plague this industry as the ones that serve as medical services providers in the broad sense of the term,” he said.

Castelo said the proposed regulatory commission could address cardholders’ “many humiliating experiences,” which have been largely the result of the lack of regulatory mechanism for HMOs.

The commission would initially assume the accreditation system that the DOH exercises and adopt the rules and regulations on the supervision of HMOs, he added.

Castelo said after two years of transition, the commission would evolve as “independent in its overall administrative and operational functions as the proper regulatory agency.”

After the transition, the commission would issue new sets of supervisory and regulatory guidelines to implement the measure, he added.

OVER 100 banks have applied to establish micro-banking offices (MBOs) in areas where there were no banks or only a few banks, according to the Bangko Sentral ng Pilipinas (BSP).

“As of end-2011, the BSP received applications from 110 banks covering over 720 MBOs,” Pia Bernadette Roman-Tayag, BSP head for financial inclusion, said in an e-mail on Monday.

Almost all the applications were approved and only a few were denied, she added, declining to cite specific figures.

The latest number of banks was an increase from the 97 that lodged applications as of end-June last year.

Ms. Tayag said the banks’ positive response to Circular 694 issued in October 2010 gave the central bank hope that the hundreds of municipalities still without banks up to now would finally get access to financial services.

The BSP issued Circular 694 to allow banks to establish MBOs or microfinance-oriented other banking offices (MFOs).

“Other banking offices” or OBOs are permitted to do only non-transactional banking functions such as marketing, accepting of loan applications or hosting of automated teller machines.

MBOs or MFOs, on the other hand, are allowed to do more such as such as accept micro-deposits; service withdrawals; disburse micro-loans and collect payments; market, sell and service microinsurance products; receive and pay out remittances; and act as cash-in, cash-out agents of electronic money transactions.

The circular was meant to encourage banks to expand -- paticularly to unserved or underserved areas -- without shelling out the large sums they usually do for branches.

“With the relatively lower cost to set up, MBOs provide an opportunity for banks to set up offices in areas that may otherwise not be immediately economically feasible to set up an office,” Ms. Tayag explained.

“This therefore provides scope for banks to reach out to hard-to-reach or even unbanked areas,” she added.

Two municipalities -- one in Ilocos Sur and another in Maguindanao

By: Randy David

Philippine Daily Inquirer

2:56 am | Thursday, May 3rd, 2012

Waiting in line for my turn at a Landbank ATM in the UP campus the other day, I started to fret at seeing the queue wasn’t moving. Two women were hogging the machine and serially withdrawing money. They shuffled what looked like a deck of plastic cards while routinely consulting a small notebook.

“Wow,” I told the person next to me, hoping the card-shufflers would overhear, “I’ve never seen anyone with so many bank accounts.” Wryly, she said, “It’s the 30th, that’s why. They’re collectors.” Only then did I realize how terribly mired in debt our government workers are. I’ve recently learned that as many as 80 percent of them have reached the maximum (sagad na) they can take out, which means their monthly take-home pay must not fall below P5,000. But, most likely, they have also borrowed against this remaining amount, thus leaving their ATM cards with the loan sharks.

Viewed from this frame, one can appreciate the significance of the government’s decision to release, ahead of time, the last tranche of the staggered salary increase for the country’s 1.5 million government employees. It puts much-needed cash into the hands of families that are not only without savings, but are so indebted that they must borrow for their daily needs. This final increase raises the minimum pay (salary grade 1) for government workers to P9,000, excluding allowances. This is very low compared to what businessmen and professionals in our society earn, and what government workers in prosperous countries are paid. But it compares favorably with what workers in the private sector make.

Minimum wage by itself, however, is not a good gauge of the condition of the working class. Increases in the price of food, utilities and transportation can quickly wipe out any wage increase. This makes inflation the biggest enemy of labor. More than legislated wage increases, I prefer to see social redistribution take the form of concrete improvements in the quality and accessibility of basic education, health services and mass housing.

But there is another side to the situation of the poor that interests me as a sociologist. And that is the effect of a consumerist culture on our people’s daily life. We pride ourselves in having one of the highest mobile phone penetrations in the world. Indeed we like to think of ourselves as the texting capital of the world, as if that were a measure of development. But how much real productive use do we put this amazing technology to? My guess is not much. Yet mobile phones are now regarded as basic necessity. I’ve seen people scrimp on food just to buy phone load. They feel miserable when they cannot text or call, as if all worthy human interaction depended on the cell phone.

But the mobile phone is just the most visible emblem of our consumerist way of life. The capital of modern consumerism is the shopping mall. Whereas in developed countries, the growing popularity of Internet shopping is putting big and fully-staffed stores out of business, the opposite is taking place here. Our shopping malls are getting bigger, and their reach has become so wide they have integrated small-town grocery and sari-sari stores as their satellites. It is not surprising that the growth of the mall economy has followed the same trajectory as the instant prosperity created by overseas work. These malls would not be where they are today without OFW remittances. And where the malls are, the fast-food chains cannot be far behind. It is this democratization of consumption that fosters the illusion of inclusiveness in our otherwise highly stratified society.

One would think that a country that earns about $20 billion annually from its overseas workers would be, sooner or later, well-positioned to capitalize its own long-term growth. But we’ve been sending out workers for nearly four decades now. The growth in income has not transformed Filipino families into savers. It has only made them consume more. As their incomes rise, so have their needs multiplied. Sadly, it is not just their lifestyles that have changed, but also their moral intuitions about what constitutes a worthwhile life. Nowadays few think twice about leaving their young children behind in the hope of earning more abroad.

Much of the evidence for this sea change in our way of life is anecdotal. One wishes someone like Daniel Kahneman, 2002 Nobel Prize winner in the economic sciences, could do a study of how the intuitions that currently shape Filipino lives defy everything presumed by the “rational agent model”—maybe something along the lines of a psychology of stupidity, to which all of us, regardless of social class or education, are susceptible.

I have a neighbor in Bataan who has been bugging me for the longest time to help him get a job in an ocean-going liner. He hasn’t been jobless at home, but he thinks he’s not earning enough to support his growing family. I managed to set him up for a job test with a crewing company owned by an acquaintance. A high school graduate, this man is a fine all-round carpenter, but twice he failed the oral interview in English.

From a local job that engaged him for a year, he had netted P20,000 in savings. He put in a portion as down payment for a motorbike, but the monthly amortization soon ate up all the money he had. After five months, he had to return the bike, forfeiting every cent he had paid. He has asked me again to endorse his application for an overseas job. I strongly advised him to stay in a job which will not take him away so long from his family. I don’t think his case is unusual. Like many, he suffers from an exaggerated view of the benefits of working abroad.
public.lives@gmail.com

By GENALYN D. KABILING

May 1, 2012, 8:22pm

MANILA, Philippines — Members of the Government Service Insurance System (GSIS) and the Social Security System (SSS) can now borrow money from the government so they or their children can complete college or get vocational courses.

The P11.2-billion education assistance fund was among the benefits announced by President Benigno S. Aquino III during the Labor Day celebration yesterday in Malacañang.

“Today, qualified members no longer have to cling to five-six loans to send their children to school. Filipino workers can now rely on a more practical and more fair means to invest on their future,” Aquino said in Filipino in his speech at the Labor Day breakfast meeting with labor leaders.

Budget Secretary Florencio Abad said the Educational Assistance Fund Program (EAFP) will allow

200,000 SSS members and 1.4 million GSIS members to receive assistance for four-year degree programs and technical/vocational courses.

Under the EAFP, Abad said P4.2 billion will go to GSIS members, while P7 billion will be allotted to the SSS.

Any GSIS member can borrow P4,000 at 6 percent interest payable over a 5-year period, while an SSS member with a monthly salary of P10,000 can avail himself of as much as P120,000 in education assistance.

RIZAL MICROBANK, the microfinance arm of Yuchengco-led Rizal Commercial Banking Corp. (RCBC), seeks to expand its loan portfolio by more than half this year and has rolled out a plan to strengthen its operations in Luzon and Mindanao.

“We want to grow our loan disbursements to P400 million by end-2012,” said John G. Deveras, Rizal Microbank vice- chairman, in a phone interview last Tuesday.

He added the bank will open new branches and micro-banking offices (MBO) in Luzon and Mindanao to extend its reach.

Rizal Microbank, the result of the merger between Pres. Jose P. Laurel Rural Bank, Inc. and Rizal Microbank (formerly the Merchants Savings & Loan Association, Inc.), has 10 branches in southern Luzon and eight branches in southern Mindanao at present. The merger was approved by the central bank in March.

In Luzon, Rizal Microbank will establish a branch in Lipa, Batangas and Puerto Princesa City, and one MBO each in Malvar, Batangas; San Juan, Batangas; and Cabuyao, Laguna.

In Mindanao, it will set up a branch each in General Santos City; Valencia City, Bukidnon; and Butuan City; and two MBOs in Davao City.

JP Laurel Rural Bank and Rizal Microbank disbursed a total of P260 million in loans last year, falling short of their P300 million combined target.

Loans averaged P50,000, carried a 2% interest rate and had tenors of three to six months.

“We don’t favor any industry in lending. We lend to anyone who is a good business person. Our clients usually use the money for their working capital,” Mr. Deveras said.

Asked if Rizal Microbank plans to expand to Visayas, he said in a text message yesterday: “We are not yet ready to manage offices in Visayas and there’s still lots of room for growth in Mindanao and southern Luzon.”

He also pointed out the thrift bank has “more than enough capital” to build new branches, which usually cost around P2 million each, and put up MBOs, which cost around P500,000 each.

RCBC has infused Rizal Microbank with P500 million in additional capital to support its operations this year and the next year as it is not expected to turn in a profit until 2014.

Mr. Deveras also said the bank will be “aggressive” in hiring lending officers or microfinance account officers but did not say the number the bank will employ.

Microfinance account officers are in charge of marketing the bank’s microfinance products and conducting intensive credit investigation or background checks to establish a client’s character and capacity to pay.

RCBC ventured into microfinance in July 2009 after buying J. P. Laurel Bank based in Batangas in February 2009 and Rizal Microbank, which had branches in southern Mindanao, in May 2008. -- A. R. R. Gregorio

Feature

She earns about $100 a month washing clothes and her husband used to bring in about $70 a month driving a motorcycle taxi until he went blind.

But things are better than they used to be.

Through a program in the Philippines called Pantawid Pamilya (Family Subsistence), 3 million poor households like Ms. Capco’s get small grants from the government if they keep their children in school and take them regularly to health centers.

"It’s really a big help because now we don’t have a problem about whether we can have food to eat or if the kids have money to go to school," Ms. Capco, 43, said with her two-year-old daughter Rihanna on her lap.

A high school graduate with gleaming eyes and a ready smile, Ms. Capco has been in the ramshackle community for 18 years.

With a quarter of its people below the poverty line as the population crests 100 million, the Philippines points to the need for developing Asia to reverse worsening inequality and broaden the benefits of the region’s tremendous economic growth.

Conditional Cash Transfer schemes like Pantawid Pamilya -- so-named for conditions imposed to qualify for benefits -- were pioneered in Brazil and Mexico and have proven very effective in giving immediate help to the poor and breaking vicious cycles of poverty by improving health, education and opportunities.

Narrowing the wealth gap has become as pressing as poverty alleviation, making it a key theme of this week’s annual meeting of the Asian Development Bank (ADB) in Manila with government officials, bankers and civil society groups from 67 countries.

Inequality is rising in 11 countries making up 82% of Asia’s population, the ADB says. That list includes China, India and Indonesia -- three huge economies driving much of the growth.

"Relative to other regions, the recent period of growth in Asia has been both less inclusive and less pro-poor," the International Monetary Fund said in a report.

For Rajat Nag, ADB’s managing director-general, growing inequality "threatens to undermine the region’s stability."

Governments in Asia have the resources to promote inclusive growth, he said in mid-April, and they should adopt more targeted social spending. That means rolling back poorly focused schemes like the fuel subsidies in Indonesia that the government finds costly but politically difficult to kill.

"Countries have often felt that they first need to grow and they need to grow fast," Mr. Nag said.

"But a principle of rising tides will lift all boats makes an assumption that no boat has a hole in the hull."

Conditional Cash Transfer schemes in the Philippines and Indonesia

BANKS WILL need to set aside at least 25% of their total funds for
lending to farmers, fisherfolk and agrarian reform beneficiaries
beginning next month after the government issued the implementing
guidelines of the Agri-Agra Reform Credit Act yesterday.

The rules state that banks should allocate at least 25% of their total
loanable funds to the agriculture sector, of which 10% should go to
agrarian reform beneficiaries.

“Excess compliance in the 10% agrarian reform credit may be used to
offset a deficiency, if any, in the 15% other agricultural credit in
general, but not vice versa,” the rules read.

The implementing rules and regulations (IRR) drafted by the Bangko
Sentral ng Pilipinas (BSP), the Department of Agriculture (DA) and the
Department of Agrarian Reform (DAR) will take effect 15 days after its
publication yesterday.

Republic Act (RA) 10000 or the Agri-Agra Reform Credit Act of 2009,
approved by then Pres. Gloria Macapagal-Arroyo on February 23, 2010,
amended Presidential Decree 717 signed by then President Ferdinand E.
Marcos on May 29, 1975.

The rules also state the BSP, in consultation with the DA and the DAR,
will prepare the guidelines on the computation of total loanable funds
and how banks can comply with the law on a consolidated or group-wide basis.

BSP Deputy Governor Nestor A. Espenilla, Jr. said in a text message
yesterday the circulars covering the computation of total loanable funds
and banks’ consolidated compliance will be released “by Friday.”

The rules state that banks can directly comply with the requirements of
RA 10000 through the actual extension of loans to qualifed borrowers or
the purchase of eligible loans on a “without recourse” basis from other
banks.

Alternative modes of compliance are also available:

• investment in bonds issued by the Development Bank of the Philippines
and the Land Bank of the Philippines that have been declared eligible by
the DA, the proceeds of which should be used for lending to the
agriculture and agrarian reform sectors;

• investment in other debt securities that have been declared eligible
by the DA or any agency authorized by the DA;

• subscription to shares of stock in accredited rural financial
institutions (preferred shares only), the Quedan and Rural Credit
Guarantee Corp. or the Philippine Crop Insurance Corp.

• investment in the special deposit accounts of rural financial
institutions that are accredited by the BSP;

• wholesale lending to accredited rural financial institutions;

• rediscounting by universal and commercial banks of agriculture and
agrarian reform credits;

• extension of loans for the construction and upgrade of infrastructure,
including farm-to-market roads and post harvest facilities; and

• grant of loans to warehouses or millers or wholesalers accredited by
the National Food Authority.

Banks that fail to comply with the requirements of the law will have to
pay a penalty equivalent to 0.5% of their non-compliance or
under-compliance, which will be computed on a quarterly basis.

“This is something we have to live with because it is the law,” Chamber
of Thrift Banks Executive Director Suzanne I. Felix said in a text
message yesterday.

To be fair to the BSP, she said, banks were consulted in the preparation
of the IRR.

For his part, Banco de Oro Unibank Inc. President Nestor V. Tan said it
would be difficult to meet the required lending to the agriculture and
agrarian reform sectors.

“It is not for lack of trying. I don’t think the loan demand from this
sector is big enough to accommodate 25% of the industry’s loanable
funds,” he said. -- Louella D. Desiderio

ILOILO CITY -- One Network Bank (ONB), the country’s largest rural bank, is making its foray into the Visayas via a merger with an Iloilo-based rural bank.

One Network Bank expands to the Visayas by merging with an Iloilo bank.

Officials of ONB and the six-branch Rural Bank of San Enrique announced the merger, through a share swap, over the weekend.

Alex V. Buenaventura, ONB president, said the deal still needs to be approved by the Bangko Sentral ng Pilipinas but the plan is to rename the six branches of the Rural Bank of San Enrique to ONB within two years and to set up five more branches within that timeframe.

ONB has no presence in the Visayas despite its 87 branches, which are mostly in Mindanao. Its chief is bullish, saying the branches in Iloilo are just a start. “We believe we can replicate in the Visayas what we have done in Mindanao,” he said.

Mr. Buenaventura said ONB chose Iloilo City because it is progressive and yet many of its residents -- and those in nearby municipalities