Philippine Crop Insurance Corp released Php54.7M insurance claims in CV

Insurance claims paid out by state-run Philippine Crop Insurance Corp. (PCIC) to insured farmers in Central Visayas affected by calamities reached Php54.7 million as of end-November this year. Also, the PCIC free insurance coverage for farmers affected by super typhoon Yolanda in 2013 is only until this year, as decided by its board.

Citing official data, PCIC Regional Manager Crescencio Deligero Jr. said the agency distributed indemnity checks to a total of 7,282 farmers in Region 7. Indemnity is the compensation for damages or losses.

As of November, Deligero said the agency has insured a total of 207,806 farmers, already exceeding its target to insure 153,000 this year. The claims paid out by PCIC include all its insurance lines: rice, corn, high-value crops, livestock, non-crop agricultural assets and term insurance package.

Bulk of the claims were paid for rice and corn at Php24.6 million and Php21.5, respectively.wherein most of the reported losses were due to the typhoons that previously hit the region and the effects of the ongoing El Niño phenomenon.

The state-run agricultural insurer has allocated Php60 million this year for 47,278 farmers in northern Cebu which was heavily hit by Yolanda. As of last month, claims by 1,908 farmers who were covered by the free insurance reached Php13.7 million.

The insurer also offers farmers free coverage in its Registry System for Basic Sectors in Agriculture and the Agri-Fishery Insurance Program of the Cebu provincial government.

Expensive nonlife-insurance policies as house abandons tax-rate cuts

Philippine Insurers and Reinsurers Association (Pira) is no longer hoping the proposed bill on the lowering of tax rate on nonlife-insurance products will ever be enacted under President Aquino. Pira Chairman Michael Rellosa said many of the country’s legislators are already in campaign mode, as indicated by the lack of quorum at the House of Representatives the past few months.

The proposed bill that will lower the tax on nonlife-insurance products had been pending during the 16th Congress, no matter the strong support from Insurance Commissioner Emmanuel F. Dooc.

The tax imposed on nonlife-insurance products in the Philippines is said to be the highest in the world, equal to 24.5 percent of the total premium paid for nonlife-insurance products, and 26.5 percent for fire insurance.

Nonlife-insurance products are levied a 12-percent  value-added tax and another 12.5-percent documentary-stamp tax. Fire insurance is slapped an additional 2-percent fire service tax. On top of these taxes, local governments also impose 0.15 percent up to 0.17 percent in municipal tax for property insurance.

Singapore only imposes a tax of 7 percent on nonlife-insurance policies, while Thailand imposes 11.3 percent.

Finance Secretary Cesar V. Purisima was earlier reported to have opposed the lowering of the tax, although he once supported the proposed 5-percent tax on nonlife-insurance products, which was a compromise with the insurance industry, which earlier proposed for a 3-percent tax.

The lowering of the tax on nonlife-insurance products would have been appropriate with the previous lowering of taxes by the Arroyo administration on life-insurance policies, with the old tax of 5 percent being lowered further to only 2 percent to boost the competitiveness of the country’s life-insurance industry.

Rellosa said the lowering of the tax on nonlife-insurance premium would also have been in line with the government’s new policy of promoting microinsurance as a tool for the financial inclusion of the poor, because most microinsurance products are nonlife-insurance products that provide cover for property loss.

But, as  it turns out, with the shelving of the measure on  nonlife-insurance  products, these were touted as the poor man’s protection against loss of property and income during times of natural calamities.

Such will continue to be levied a very high tax rate of 24.5 percent.

-- Business Mirror

Insurance firm bares first infra investment in Philippines

Sun Life Philippines is entering its first infrastructure investment as the life insurer continually seeks for long-term assets, an official said. “As an insurance company we’ve always been in search for long-term assets,” Sun Life Chief Investments Officer Michael Gerard Enriquez said in a press conference Wednesday.

The company has announced its first foray into power generation in Mindanao. “What better way to invest our excess cash and help in nation building by looking at some of infrastructure projects,” Enriquez said.

Enriquez revealed the company is in the process of closing its first financing deal for a 600-megawatt coal-fired power plant in Mindanao, which is expected to be operational by the third quarter in 2018.

Enriquez declined to give further details yet.

On another matter, Sun Life President and CEO Rizalina Mantaring said the life insurer has set a target to insure five million individuals over the next five years from the current 1.2 million.

The target is part of its goal to boost the financial literacy among Filipinos as insurance penetration in the country currently stands at less than 5%. When micro-insurance is included, the penetration rate is at 20-30%.

“We want to reach to all segments of the population especially those who need it more,” Mantaring said in an interview.

The Canadian company announced that it achieved its five-year plan ending 2015 which includes reaching 5,000 financial advisors, Php5 billion in annualized first year premiums, Php5 billion in net income and Php50 billion in assets under management.

Sun Life ended the first half of 2015 with total premium income of Php16.3 billion, ranking first in the Philippines life insurance sector.

-- Philstar

Microinsurance products for local farmers pushed

To help farmers quickly replant damaged crops due to extreme weather conditions and, thereby, help temper food inflation, the Department of Finance’s chief economist is pushing for the immediate rollout of the Insurance Commission’s agriculture microinsurance or “MicroAgri” framework.

In an economic bulletin on Friday, Finance Undersecretary Gil S. Beltran said the rise in inflation to 1.1 percent in November from the record-low of 0.4 percent in the previous month “can be attributed to the sharp rise in vegetable prices as a result of Typhoon ‘Lando,’” that hit many parts of Luzon, including farms and plantations, last October.

“The increase in vegetable prices contributed 0.4 percent to the total inflation rate” in November, Beltran said.

Last month, the faster increases in the prices of corn, fish, meat and vegetables offset the slower rise in the prices of cheese, eggs, milk, non-alcoholic beverages and rice, the National Economic and Development Authority said on Friday.

As farmers had already been replanting crops destroyed by “Lando,” Beltran said he expected the typhoon’s adverse impact on prices to wane.

He said supporting farmers to quickly recover from natural disasters and calamities was important to temper food inflation.

“This emphasizes the need to immediately launch the MicroAgri framework and start marketing new microinsurance products for farmers. In the future, the new microinsurance product will enable farmers to undertake replanting quickly,” he said.

In October, the Insurance Commission issued MicroAgri, which “provides a clear-cut policy on agriculture insurance to encourage the private microinsurance providers to innovate and design products tailor-fitted to the needs of agricultural clients.”

With the MicroAgri framework in place, the Insurance Commission was hoping to “promote and encourage the provision of agriculture microinsurance products and services that are simple, affordable and accessible to the vast of the population dependent on agriculture.”

The Insurance Commission wants to leverage on the country’s strength in microinsurance—the Philippines is widely regarded as a model in microinsurance penetration, with 28 million of the 32 million insured Filipinos to date covered by cheap microinsurance plans.

-- Inquirer.net

Billion-peso PH Survival Fund (PSF) soon to activate

Finance Secretary Cesar V. Purisima announced on Wednesday that the Php1-billion People’s Survival Fund (PSF) should soon be available to local government units (LGUs) and community organizations to fund projects aimed that mitigate the effects of climate change.

Purisima said the panel that will administer the PSF will send out a call in the coming days for project proposals from LGUs and community organizations. Purisima said the Php1-billion PSF is part of the Philippines’s commitment to do its share in mitigating the adverse effects of climate change on the environment.

“In the Vulnerable 20 Summit on October 9, we led a call for concerted action against climate change, focusing on climate finance as a powerful tool.

The 20 most vulnerable countries face economic losses from climate change amounting to 2.5 percent of our GDP per year, at $45 billion in 2010 and expected to increase almost tenfold to $418 billion in 2030, according to the World Bank,” Purisima said.

“Here at home, the PSF is an example of the government’s commitment to protecting those most vulnerable from the effects of climate change. I look forward to the PSF financing innovative and adaptive projects in response to climate change,” he added.

The PSF was created by Republic Act 10174, which intended to make the government more able in addressing the problem of climate change and its effects on the environment and livelihood of Filipinos.

The law mandates the creation of a board headed by the secretary of the Department of Finance (DOF) which will administer the PSF.

The other members of the board are the vice chairman of the Climate Change Commission; secretary of the Department of Budget and Management; director general of the National Economic and Development Authority; Secretary of the Department of the Interior and Local Government; chairman of the Philippine Commission on Women; and representatives from academe and scientific community, the business sector, and non-governmental organizations.

The PSF is intended for projects such as water resources management, land management, agriculture and fisheries, and health, among others, and shall serve as guarantee for risk insurance needs for farmers.

Requests for application forms for the project proposals may be sent to the secretariat of the PSF board at psf@climate.gov.ph.

-- Business Mirror

BPI sets new banking trend with Make the Best Happen Campaign

Bank of the Philippine Islands (BPI) is setting a new trend in banking with its Make the Best Happen campaign. Over and above offering its range of products and services, BPI first of all wants to support its clients by helping them focus on their life aspirations.

BPI, the first bank in the Philippines and in South East Asian region, has a wide range of consumer, corporate, and investment banking products and services. In a statement, Cezar P. Consing, BPI President, said the bank wants to focus on needs-based financial planning where individuals make decisions based not on returns but on the goals they want to achieve.

The process begins with helping clients identify their life needs and goals and then create a priority list based on those aspirations. Clients are then encouraged to make personal financial assessments, computing, among others, one's net worth, cash flow requirements, and even emergency funds.

Based on this initial assessment, BPI helps clients create a game plan, mindful of their budgets, goals, risk profile and investment options.

"BPI empowers Filipinos to make the best of their lives happen through its innovative and accessible financial solutions," Consing said. "We strive to know and understand the individual circumstances and financial needs of our clients, then offer financial advice. Only then do we propose certain solutions that are suitable and customized for each and every client."

Tricia Quiambao, Head of BPI's Strategic Management, said BPI's Make the Best Happen campaign is a different look on banking. "We put a premium on understanding our clients and their needs, whether it's to travel, or start a business, or fund their children's education," she said.

"As people become more and more aware of the world around them and the many possibilities and opportunities it offers, BPI would like to enable them to accomplish those goals and aspirations better, faster and more efficiently."

Rally Jereza, BPI Division head for Visayas and Mindanao,a dded: "Cebu has been a hub of out-of-the-box thinking, and BPI feels right at home with our trendsetting solutions. With Make the Best Happen, we aim to expand the conversation with our clients and friends, beyond solutions and into actual life and lifestyle choices."

The microsite devoted to the Make the Best Happen campaign - makethebesthappen.ph - addresses some of the top life and lifestyle goals of most individuals: travel, health, parenting, shopping, future, and dining. Its content is enriched every week with updated content derived from current areas of interests.

SSS launches online issuance of social-security numbers

The Social Security System (SSS) is now accepting online applications for SSS membership on its web site at www.sss.gov.ph. SSS has adopted a two-phase application process for the online issuance of SS numbers. The web system will initially verify if the applicant already has an existing SS number using the full name and birth date given by the worker, who must also provide an email address as part of the first phase.

The process of online application for SSS membership has two steps.

The first step is for the applicant to provide his full name and birth date so that the SSS web site can verify whether an SSS number had already been issued to such person.

“Once the SSS has determined that the applicant has no previous SSS number, the Web system will prompt the worker to provide additional details during the second phase, such as the home address, contact information, marital status, and names of the spouse, parents and children,” SSS Officer in Charge of the Service Delivery Department Renato Malto said.

The SSS number that will be issued to online applicants, however, will only be temporary and would have to be converted to permanent status by presenting personally before any SSS branch the accepted supporting documents of identity, such as a birth certificate, a baptismal certificate or a valid passport.

“Once the worker has successfully changed the temporary SS number to a permanent one, it can be used to file for various SSS benefits and loan privileges, as well as to apply for the UMID [Unified Multipurpose Identification] card if at least one monthly contribution has already been posted,” Malto said.

In 2014 some 2.3 million manual applications forms for SSS membership were received at SSS branches nationwide.

Electronic Payments can help in PH Financial Inclusion

I have always believed that shifting to an electronics-based payment system can and will contribute to the financial stability and inclusion in the Philippines. And just recently, the head of the Bangko Sentral ng Pilipinas (BSP) has echoed the same sentiments in his keynote speech at the 25th anniversary of BancNet, Inc.. The BSP Governor Amando M. Tetangco, Jr. mentioned that digitization of payments can help expand financial inclusion in the country, the central bank chief noted.

The National Retail Payments System is expected to be rolled out next year as indicated by the PH central bank. Citing studies conducted by the global public-private group Better Than Cash Alliance, Mr. Tetangco said that Filipinos make about 2.5 billion payment transactions per month worth $74 billion, but only 1% of these are transacted electronically.

The central bank’s planned National Retail Payments System (NRPS) which promotes electronic payments in the country is expected to “contribute to the stability and efficiency of the financial system and the economy as a whole.”

“Studies have shown that shifting from paper based to electronic-based payment system can generate an annual savings up to 1% of gross domestic product,” Mr. Tetangco mentioned in his speech.

“Our National Baseline Survey in Financial Inclusion showed that only four out of 10 Filipino adults currently have savings, of whom only 32.7% put their money in banks. The survey also indicated that 47% of Filipinos have debts but banks contribute only 4.4% of their borrowings; the rest are from family, relatives, friends and informal lenders,” Mr. Tetangco also said.

“99% of the transactions are paid either in cash or checks. NRPS will allow us to start reversing this ratio. In other words, you have the option to have a bigger slice of this huge pie,” he said.

About Bancnet and MegaLink:
A memorandum of agreement was signed earlier last January 2015 that would start the ball rolling for the consolidation of BancNet, MegaLink, and Expressnet, the country’s automated teller machine (ATM) networks.

BancNet will be the surviving entity after the consolidation. At present, inter-ATM and interbank transaction charges of the three ATM networks range from Php5.00 to Php15.00. BancNet was the first ATM consortium to operate in the Philippines, starting with eight member banks led by then-Equitable PCI Bank and Security Banking Corp. Today, BancNet is comprised of 34 of the country’s largest banks.

Megalink is a consortium of 17 commercial banks with a combined network of 2,921 ATMs nationwide. Expressnet member banks, meanwhile, include Ayala-owned Bank of the Philippine Islands, BPI Family Savings Bank, BDO Unibank, Inc. and Land Bank of the Philippines. Some MegaLink member banks are also reconnected with Expressnet.

In 2010, the country’s three ATM networks interconnected their points-of-sales, allowing card holders of their member banks to make debits anywhere.