Love every moment with the Toyota Innova

August 5, 2019 | 12:04 am

FIRST DATES, boyfriends, and crushes — it’s an inevitable part of any girl’s life… and the worst nightmare of any dad. The Muhlach family is not an exception to this very familiar situation so Aga deals with it in the most typical dad way.

In their new video for the Toyota Innova, Aga and his wife Charlene, together with their kids Andres and Atasha, share this familiar story inspired by real family events. While a very excited Atasha is preparing for her graduation ball, Aga gets anxious when her date shows up at their home to pick her up. Charlene is very supportive but Aga has a few reservations especially upon seeing the date’s ride. Catch the video on Toyota Motor Philippines’ official Facebook page and YouTube channel.

No matter what happens, we can always count on our dads to always have our backs. Just like the Innova, you can always trust this reliable vehicle whether it be for quick errands or long road trips for the whole family.

“With the Innova, there’s space for more great moments,” says Charlene of their new family ride. Not only can the Innova comfortably fit their whole family of four, this seven-seater can even accommodate their children’s friends.

Watch out for other videos of the Muhlach family with the Toyota Innova through its official Facebook page and YouTube channel (Toyota Motor Philippines).

Women’s Flats for Work: most comfortable, best brands, how to fit

August 5, 2019 | 12:03 am

By Deena Shankar
Bloomberg

IF YOU are a woman who works, chances are you have struggled with footwear.

Maybe you’ve commuted in one pair and then changed into another when you got to your desk. Maybe, over the years, you’ve built a collection of not just shoes, but also tiny socks of different shapes and sizes — socks that barely cover your toes, that aren’t supposed to peek out of your shoes but inevitably do, that are like tiny little stockings, or with a glue bit on the back heel to hold them in place. Maybe you’ve stared at the feet of the women you see on the subway or in your office and wondered, “Did she actually walk here in those shoes?” Maybe you, like me, have actually stopped several of these women to ask them that question, and if the answer is, “Yes, these are comfortable enough to walk in and they look good with my professional attire,” followed up with another inquiry: “Who makes them? Would you spell that, please?”

Climbing the male-dominated corporate ladder is hard enough on its own. It’s even worse in bad shoes.

Women looking for the right pair have no shortage of options. The US women’s footwear market was $33.9 billion for the 12 months ending in April 2019, according to the NPD Group/Consumer Tracking Service. The most growth is coming from the sport leisure category — but even fashion, which had been declining, is now leveling out, thanks to those brands incorporating comfort.

So what brand is doing it best?

There is no single answer: For every woman who swears by her Rothy’s, there is another who bemoans the $125 wasted on yet another pair of toe scrunching, back-of-the-ankle-tearing shoes. While some women are willing to go through the pain of breaking in a pair of Everlane Day Gloves, others don’t have the patience. Bloomberg spoke, e-mailed, and DMed on Twitter with dozens of women, including fashion experts, lawyers, journalists, and an array of other professionals.

There were few consensus items, but plenty of passion. Here are some in three broad categories that get rave reviews.

THE BALLERINA
There is a reason that Chanel flats have been so ubiquitous for so long. If you are ready and able to spend $700 on a single pair of shoes, no one style comes more roundly recommended than the lambskin. The supple leather makes them comfortable right away, without the dreaded rubbing that can happen with the fashion house’s other styles and leathers.

For those not looking to spend quite that much money, Atillio Giusti Leombruni (or AGL) also makes a ballerina flat, though some breaking in is to be expected.

If the rounded toe shape isn’t your style, try the pointier-toed Barneys New York Suede & Mesh flats, recommended by Marina Larroude, vice-president and fashion director at Barneys New York. “The mesh of the ballerina is very soft in the feet, super comfortable, and light, especially during the summer time,” she says.

The snakeskin CC Corso Como skimmer is one of Nordstrom’s most popular stylish and comfortable flats, says Kate Bellman, director of Nordstrom’s fashion office, though it’s available in many materials and colors.

THE LOAFER
No shoe quite says “ready for business” as a loafer does. The Gucci classic menswear style is recommended by Erica Russo, vice-president and fashion director of accessories and beauty at Bloomingdale’s. “I love this style because the leather will give over time, making this a great fit,” she explains. Every Gucci loafer-wearing woman that Bloomberg spoke with praises its immediate comfort as well.

For something a little more fashion-forward, try the Noelle loafers from The Row. “The soft suede makes them really easy wearing, right out of the box,” says Rati Levesque, chief operating officer of luxury consignment site RealReal.

Many women also said they were major fans of the Cole Haan brand, which offers several loafers.

THE CLOG
Clogs are not always flats, but they are comfortable enough to have migrated from nurse wear to streetwear and stayed put for some years. They are not suited for long walks, says Adam Farber, owner of comfort-focused, independent shoe store Mark Adrian Shoes in Gloucester, Mass., but they are a good choice for anyone who logs many hours on their feet. Mr. Farber likes Dansko best, but brands such as Swedish Hasbeens, No.6 Store, Nina Z, and Rachel Comey offer a range of colors, styles, and heel heights.

THE SECRET TO FINDING THE RIGHT FIT
When it comes to shoes, many women don’t realize that, as with the rest of their bodies, sizes can shift.

“Feet change over time; they get larger, wider, and longer,” Mr. Farber says. “It’s really important not to be married to a number.” That means that even a shoe that fits one year might not work the next.

“People are constantly fitting themselves incorrectly, and the fit is almost as important as the structure of the shoe itself,” he continues, recommending that shoppers get fitted by an expert and try everything on in-person as much as possible.

Nordstrom’s Ms. Bellman agrees: “It’s important to know the shape of your arch and work with a certified shoe fitter to identify the best support for your foot.” (The service is complimentary at the retailer.) “Foot pain often comes from improper arch support, but there are many shoes available that provide architectural arch support technology that alleviates discomfort. Lastly, a flexible sole will encourage proper movement and gait.”

The right fit means that there should be a thumbnail’s worth of space between your toe and the front of the shoe, felt by someone else, says Mr. Farber. A little bit of heel slippage at the beginning is to be expected. A snug fit is not the goal.

For those logging the most miles, a slip-on flat is not the right choice. “You want a ‘seatbelt,’ something that’s going to keep the shoe on your foot so you’re not scrunching your toes up to keep the shoe on,” he says. That can cause heel pain known as “plantar fasciitis.”

In addition, he cautions, even the best shoes aren’t necessarily perfect for you right out of the box. Mr. Farber says a good shoe can take as much as a week to break in. Start with an hour on day 1, two or three hours on day 2, and so on.

Remember, most retailers won’t accept the return of a shoe worn outside. So choose your store with its return policy in mind and wear a shoe indoors before you take the leap into the great outdoors.

DoF sets alcohol, e-cigarette tax law timeline to help fund UHC

August 5, 2019 | 12:03 am

THE Department of Finance (DoF) said it has set an internal deadline of 15-18 months to pass new legislation taxing alcoholic beverages and e-cigarettes, hoping for laws to be in place to fund Universal Health Care (UHC) before the 2022 election campaign heats up.

“We have to finish this thing by 15 to 18 months… It’s basically between 15 and 18 months,” Finance Secretary Carlos G. Dominguez III told reporters on the sidelines of the 115^th anniversary celebration of Bureau of Internal Revenue (BIR).

The latest estimate is longer than the timeline provided by Finance Undersecretary Karl Kendrick T. Chua on July 24. Mr. Chua had expressed hopes for passage before the year ends.

The DoF estimated that such taxes could generate P15.8 billion in the first year of implementation and P111.5 billion over the next five years, based on the bill passed by the previous Congress. The taxes will help plug the funding gap for the Universal Health Care (UHC) law.

Last month, Mr. Dominguez said he hopes to increase the excise tax on alcoholic beverages to at least P40 per liter and further raise taxes on heated tobacco and vapor products to parity with regular cigarettes.

“In 2021, everybody will be looking at other things… that’s the reality. I’m not saying nothing will happen but the distraction will be more than normal,” he added, referring to the run-up to the 2022 Presidential elections.

The DoF said in late July that the suspension of some of the Philippine Charity Sweepstakes Office’s (PCSO) gaming operations will have a minimal impact on UHC funding as the funds generated by gaming will only account for 1.2% or P3 billion of the P257 billion needed for UHC next year.

The freeze on Lotto operations was lifted on July 30 while other gaming operations with franchises, licenses and permits given by PCSO, such as small-town lottery, Keno and Peryahan ng Bayan remain suspended pending investigation.

Meanwhile, Mr. Dominguez also said the budget for next year will be passed on time and with none of the delays that held back the 2019 budget’s approval.

“For next year, I believe that the budget will be approved on time and that we will not experience the same delays… It will be within the required period. In fact on Monday, the final budget will be presented to the cabinet by the DBM (Department of Budget and Management),” he said.

The government operated on a re-enacted 2018 budget from the start of the year until April 15, when President Rodrigo R. Duterte signed the general appropriations bill into law. He vetoed P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to about P3.662 trillion. — Beatrice M. Laforga

Pag-IBIG taps PayMaya for payments

August 5, 2019 | 12:03 am

THE HOME Development Mutual Fund (Pag-IBIG Fund) is tapping PayMaya Philippines, Inc. for its digital financial services.

The mobile wallet arm of PLDT, Inc. said in a statement over the weekend it has signed a partnership with the state-owned housing loan provider to allow digital and card payments on its online and on-ground platforms.

It said the agreement is in line with the government’s push for more convenient access to public services as it enables Pag-IBIG Fund members pay for their savings and loan repayments online.

“With this partnership, our members now have an even wider range of options whenever they need to transact with Pag-IBIG Fund… This is our way of bringing our services one convenient step closer to Pag-IBIG Fund members, wherever they may be,” Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti said in the statement.

The partnership will allow Pag-IBIG Fund members transact using any Visa, Mastercard or JCB credit, debit or prepaid cards, or through their mobile numbers linked to a PayMaya account.

Eventually, PayMaya will also provide Pag-IBIG Fund with point-of-sale devices in its branches, which will allow quick response payments on top of the existing card payment options.

“We are glad that government agencies like Pag-IBIG Fund are embracing digital payment technologies to help bring convenience to all Filipinos,” PayMaya Founder and Chief Executive Officer Orlando B. Vea said in the statement.

“We at PayMaya are proud to be the partner of Pag-IBIG in delivering more accessible public services, which is in line with our goal of digital and financial inclusion for the Philippines,” he added.

PayMaya is handled by PLDT’s digital arm Voyager Innovations, Inc., which is backed by China’s Tencent Holdings Ltd.; US-based Kohlberg Kravis Roberts & Co.; International Finance Corp. (IFC) and IFC Emerging Asia Fund.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

Duterte’s Veto

August 5, 2019 | 12:03 am

In the May 2019 elections, the Filipino people, it appears, reaffirmed its faith in Dutertismo — an attenuated political space in exchange for expanded economic space. Having now control of both Houses of Congress, Duterte can no longer blame oppositionist obstructionism for the lack of progress in the economic space. At the start of his watch he promised to leave the management of the economy to his economic team who has sworn by the market. Everyone knows that the boundary between the economics and politics is very porous and artificial. For the most part, he has honored his promise in the past three years. How will this apparent lurch into autocracy affect Duterte’s balancing act between the market and his populism?

The first real test came in July this year with the Security of Tenure bill (SOT). The SOT threatens the viability of many businesses which provide employment. After long soul-searching, Duterte vetoed the controversial bill over a central election promise. Organized labor is crying betrayal. The industry associations and chambers argued and tipped the balance for the veto. Until then the Duterte economic team seemed unable to move the needle for the market. Finance Secretary Carlos “Sonny” Dominguez III even let out days before the veto (BusinessWorld, July 25, 2019) that SOT will not affect investment; that he supported Planning Secretary Ernesto Pernia’s view that SOT needed “tweaking” to protect competitiveness of the Philippines. Either the SOT bill is not negative for investment or it is negative for investment and thus needs tweaking to reduce the damage to investment flow.

Outsourcing or a return to “core business” is a market efficiency strategy, but core business is a fluid concept and differs for different firms in different environments. Being good at making solar panels does not mean you are also good at keeping your premises clean or secure from unauthorized entry. In environments where others are better at cleanliness or security than you, you outsource; in environments where those services are not provided efficiently, you insource. Knowing exactly when to switch is internal to the firm. Governments mandating that switching point can cause serious inefficiencies and create junctures of corruption. Investors shudder at the potential cost of disputes over what constitutes “core business.”

As a practitioner of the “dismal science” and acutely aware of unintended consequences (see, e.g., Fabella, April 2018, “Endo and Manufac turing” https://www.bworldonline.com/endo-and-manufacturing/), I applaud President Duterte’s veto. I have always felt that Duterte’s watch will be a tug-of-war between the market (growing the economic pie) and populism (redistributing the economic pie). Unbridled populism only manages to redistribute poverty. Ask the Venezuelans. The veto shows that for the moment at least, the market has not lost ground.

But has the market gained ground? The veto, alas, just maintains the status quo, a status quo which, truth be told, has fallen badly behind our rivals in the region. Closing the gap on investment-friendliness should be our principal preoccupation. Instead we are putting out fires. And yet we are thankful that we dodged a bullet.

There is another reason for being upbeat. The veto shows that Duterte’s populism remains for the moment “bridled”; by economic common sense, that is. Bridled populism takes courage. It requires the populist leader to recognize when the demands of his public becomes unbridled, when the long-run harvest of those demands become poison and to say “Enough!” Eating today the seeds of tomorrow’s harvest is folly. The explanatory note for the veto indeed reveals a recognition that a balance must be preserved, that unduly depriving capital its just due will hurt labor in the end. The reaffirmed Duterte looks like he appreciates the painful trade-off. Can we hope to build on that instance of courage to gain ground for competitiveness?

The hope can be unfounded. For the veto to firmly anchor that hope, it must be based on a firm conviction that the investment rate (GFCF/GDP in percentage) should accelerate to 25-30% of GDP when we were running at 20% for decades. Investing at that clip will rapidly grow the economic pie and accelerate job creation. Paltry job creation is the real root of labor sub-contracting — if job creation is brisk, people will snub inferior arrangements. Ending sub-contracting by law is palliative. Job creation first, and for that you need a herding of investors. What good is Build, Build, Build if private investors do not come to the party — or, even worse — fly the coop because capital gets a better deal elsewhere? Which is also why parts of TRABAHO pertaining to PEZA locators pose a danger: those will attenuate the incentives for Manufacturing investment in PEZA where the threat alone has now begun to slow the investment flow.

Without that firm conviction on the central role of investment, the veto can only serve as an excuse for more populist profligacy down the line, either in the reincarnated SOT or elsewhere. “You had yours, now they will have theirs,” may seem like an alluring fair exchange. But the ground the market just managed to hold can easily be lost by profligacy elsewhere, like through mandated excessive minimum wage, national wage setting or excessive (not matched by productivity) increases, and salary increases for government workers. The latter will raise the labor bill everywhere, not just the government’s. Rapid salary increases for public school teachers are causing the closure of many private schools. Jobs are being lost even as public school teachers rejoice. Excessive entitlements to public servants were the very mistake of the socialist government in the run-up to the decade-long Greek economic collapse starting in 2008. Without such conviction, the reaffirmed Duterte may pose a danger to Ambisyon Natin 2040.

History has a lesson here (see, e.g., Acemoglu and Robinson, Why Nations Fail): you trifle with your future when you trifle with the market. Even if you are an absolute autocrat! Nicolas Maduro of Venezuela and Mao Zedong of China brandished autocratic power to serve unbridled populism that destroyed the market on the way to shared poverty. Deng Xiaoping used autocratic power to firmly entrench the market towards shared prosperity. We hope that Duterte’s veto is only the first step in a Deng Xiaoping journey towards shared prosperity.

Raul V. Fabella is a retired professor of the UP School of Economics and a member of the National Academy of Science and Technology. He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.

Coffee segment’s resurgence lifts Universal Robina stock

August 5, 2019 | 12:03 am

By Mark T. Amoguis
Senior Researcher

GROWTH prospects from Universal Robina Corp.’s (URC) coffee business made the Gokongwei-led firm one of the most actively traded issues in the local bourse last week.

A total of 6.79 million URC shares worth P1.12 billion exchanged hands at the trading floor from July 29 to Aug. 2.

URC ended P169.60 apiece last Friday, down 0.8% from its July 26 finish. On the other hand, the stock rallied by 33% since the start of the year.

AP Securities, Inc. Research Analyst Robert Miguel B. Ong said in a phone interview that profit taking prior to the “relatively good” second-quarter earnings report last Thursday drove much of the stock’s movement last week.

Meanwhile, Diversified Securities, Inc. Trader Aniceto K. Pangan in a mobile message noted the “sustained turnaround story to positive growth” of URC’s coffee segment, which boosted the company’s growth performance in the second quarter.

In a regulatory filing last Thursday, the listed food and beverage firm reported an attributable net income of P2.09 billion in the second quarter, 12.4% higher than it booked in the same quarter last year, amid the strong performance of its local coffee segment led by Great Taste.

This brought URC’s attributable bottom line in the first semester to P5.13 billion, up 6.6% from the comparable six months last year, as its top line went up 5.6% to P67.04 billion.

PSE data showed net foreign selling reaching P140.97 million last Wednesday, a day before the release of the company’s earnings report. Last Friday, foreigners were net buyers of the stock totaling P34.71 million.

In late May, URC President and Chief Executive Officer Irwin C. Lee told reporters after the company’s annual shareholders’ meeting in Pasig City that their market share for the coffee business dropped to about 20% last year, but has since started to improve to the mid-20s level.

URC earlier implemented initiatives to improve its coffee business in the country, which had been a negative contributor to earnings in previous years. Among these initiatives include the launch of its three new instant coffee products last January to address gaps in the market.

The company is looking at a 7-9% increase in sales this year, counting on growth of its food and agro-industrial businesses and the recovery of its coffee segment, which shows a “very strong growth momentum.”

URC has allotted P9.1 billion in capital expenditures for the year, mostly for capacity expansion

The company is known for its brands like Jack N’ Jill, Nissin Cup Noodles, C2, Blend 45, Great Taste, Vitasoy, and Calbee.

For this week, AP Securities’ Mr. Ong pegged the stock’s support at P155 and resistance at P170.

For Diversified Securities’ Mr. Pangan, URC’s support and resistance levels are placed at P160 per share and P180 per share, respectively.

Indonesia could fund sustainability certification for palm smallholders

August 5, 2019 | 12:03 am

JAKARTA — Indonesia to issue a new palm sustainability regulation to give greater support for smallholders to get sustainability certificates, Coordinating Minister of Economic Affairs Darmin Nasution said on Wednesday.

Under the new regulation, the government will fund certification process by Indonesia Sustainable Palm Oil (ISPO) for smallholders, he told reporters.

The new decree, which needs the president’s approval, is being finalized and set to be issued later this year, he said.

The government will also invite professional participants to join the ISPO committee, which is currently controlled by officials, said Musdhalifah Machmud, Deputy Minister of Economic Affairs. — Reuters

BIR reports POGO worker tax collections of P200M

August 5, 2019 | 12:03 am

THE Bureau of Internal Revenue (BIR) has gathered around P200-million worth of taxes from foreign workers in the Philippines for Philippine Offshore Gaming Operators (POGO) since it started such collections from the industry last month.

“Mga nasa (around) P200 million,” BIR Deputy Commissioner Arnel SD. Guballa told reporters on the sidelines of the 115^th BIR anniversary on Thursday, adding that the revenue was generated from six POGO companies. He did not provide an estimate for the number of workers.

In early July, Finance Secretary Carlos G. Dominguez III said the BIR will start collecting taxes that month from foreign workers employed by POGOs.

Mr. Dominguez has said the government foregoes revenue of about P2 billion a month for every 100,000 POGO workers that do not pay tax, amounting to P24 billion a year. — Beatrice M. Laforga

Volvo reports record revenue for first half of 2019

August 5, 2019 | 12:03 am

VOLVO CARS reported a record revenue for the first six months of 2019 of SEK130.1 billion, up from SEK122.9 billion year-on-year and buoyed by the best first half-year sales performance in the company’s history.

For the first six months, sales amounted to a record 340,286 cars, a year-on-year increase of 7.3%. During the period, Volvo Cars grew consistently faster than the overall market.

The company has gained market share across the US, China and Europe, with the UK and Germany recording growth of 30% and 32%, respectively. The overall passenger car market in the US declined by 2.0% in first half, while China and Europe fell by 9.3% and 3.1%, respectively, during the same period.

Håkan Samuelsson, president and chief executive, emphasized that the company has prioritized growth and market share during the period, capitalizing on the building momentum for the Volvo brand generated by an all-new lineup of award-winning models.

“At a time when most markets in the world see stagnating car sales, we have had strong growth in the first half,” Mr. Samuelsson said. “We continue to take market share in all regions where we operate, but increased pricing pressure and tariffs have decreased our operating profit. The cost measures we took earlier this year will come into effect in the second half of the year.”

In the Philippines, the Volvo market continues to look forward to a positive turn as new models are introduced. The stately Volvo S90 estate, the luxurious Volvo XC90 SUV, and the robust Volvo XC60 SUV continue to bring in interest for the Swedish marque. The local market in Twin Engine Plug-in Hybrid variants can now also enjoy these three models, as well.

Operating profit for the first half of 2019 was of SEK5.5 billion, compared with a SEK7.8 billion operating profit for the same period last year. For the second quarter of the year, operating profit fell to SEK2.6 billion, while revenue rose to SEK67.2 billion.

The first-half operating margin fell to 4.2% from 6.4%, while the operating margin for the second quarter of the year amounted to 3.9%.

Volvo Cars has initiated additional cost measures within the company on top of already planned measures, which combined, aim to lower fixed costs by SEK2 billion. These actions will come into effect in the second half of the year and running into the first half of 2020.

For the remainder of the year, Volvo Cars expects continued growth in sales and revenue, boosted by continued strong demand for the fully renewed product portfolio as well as increased production capacity.

Market conditions are expected to put continued pressure on margins, but the combination of volume growth and cost measures is expected to result in a strengthened profit in the second half of the year compared with the same period last year.

Readers line up for copy of British Vogue edited by UK’s Duchess Meghan

August 5, 2019 | 12:02 am

LONDON — Royal-loving readers queued up on Friday to buy the new edition of the British Vogue magazine which was guest edited by Meghan, the Duchess of Sussex and wife of Britain’s Prince Harry.

Meghan, who gave birth to her first child in May, spent seven months working with the magazine’s editor-in-chief Edward Enninful for the September issue which featured 15 women she considered “Forces for Change” on the cover.

“I wanted to be one of the first… and I was very excited,” said Vanessa Forstner, 29, a luxury car saleswoman who queued up outside the Conde Nast Worldwide News store in central London.

Sandria Plummer, 55, another of those who waited to buy the magazine, said she was excited about the diverse contents Meghan had chosen.

“It’s special because the Duchess of Sussex is the editor for this month and… it’s a once in a lifetime thing to have, it’s a collectors’ item so I’m excited that I’ve got two copies now,” she said.

Former actress Meghan, 37, said in a statement she had sought to steer the focus of the September issue — usually the year’s most read — to “the values, causes and people making impact in the world today.”

The cover of the magazine features figures such as teenage climate change campaigner Greta Thunberg, New Zealand’s Prime Minister Jacinda Arden, boxer Ramla Ali, and actress and women’s rights advocate Salma Hayek Pinault.

“I hope readers feel as inspired as I do, by the ‘Forces for Change’ they’ll find within these pages,” Meghan said.

The issue features a “candid conversation” between Meghan and former US first lady Michelle Obama and an interview by her husband Prince Harry with veteran primatologist Jane Goodall in which he discusses the “unconscious bias” of racism. — Reuters

SSS sickness benefits climb

August 5, 2019 | 12:02 am

THE SOCIAL Security System’s (SSS) disbursements of sickness benefits reached P984.42 million in the first four months, higher than the P875.42 million released in the same period in 2018.

In a statement on Sunday, the state pension fund said it saw a P109-million year-on-year climb in sickness benefit disbursements in the January-April period.

Meanwhile, the number of beneficiaries of sickness benefit in the four months ended April climbed to 155,856 members from the 145,370 beneficiaries recorded in the same period in 2018.

SSS released P913.88 million in sickness benefits under the social security program between January and April, up 9.5% from P834.22 million disbursed in the same period in 2018.

Some P70.54 million was also paid out for sickness benefits for work-related sickness and injuries under the Employee’s Compensation Program, 71.3% higher than P41.19 million released year-on-year.

“A qualified member under the sickness benefit program receives a daily cash allowance for the number of days he is unable to work due to sickness or injury,” SSS said.

To qualify for sickness benefit, a member must have been unable to work due to an illness for at least four days, whether confined at home or in a hospital. The member must have at least three monthly contributions within the 12-month period before the semester of illness.

A member can receive a maximum of 120 days in sickness benefit in one calendar year. If the member is still not capable of working after this period, the worker must report to the SSS to determine qualification for disability benefit.

“SSS aims to provide meaningful social protection to its members through the benefits that we provide and the programs that we continuously develop,” SSS President and Chief Executive Officer Aurora C. Ignacio said in the statement.

“We hope that our members view the contribution rate increase as bigger savings for their future, especially in times of need,” she added. — KANV

Student Loans 2.0

August 5, 2019 | 12:02 am

Filipinos are known the world over for being meticulous, diligent workers. Unfortunately, the lack of education prevents many of our countrymen from realizing their full potential. Studies from the Commission on Higher Education and Technical Education and Skills Development Authority show that for every three Filipinos, one is unable to complete their college education primarily due to financial reasons.

I recently reconnected with an old friend from Madrid, Ana Pastor, who is now based in Manila. Ana casually told me that she is now working for a Philippine company that provides collateral-free student loans to deserving Filipinos. The company, EduCredit (www.educredit.ph), operates in full compliance with the Financing Act of 1998.

I was immediately interested in Ana’s company since keeping children in school is how we can improve our Country Human Capital Index (the global measurement of education and skills of a workforce). As we all know, the country is the midst of a demographic sweet spot where the majority of the population are in their prime working age. This sweet spot will last for 50 years beginning 2025. However, a study conducted by the National Economic Development Authority asserts that while the country is poised to reap the benefits of its demographic profile, it is hindered by its relatively low human capital index. Providing education to as many unschooled youth as possible will address this.

The founders of EduCredit are both foreigners — Vasyl Davydko and Daniel Jose Georges. Vasyl was born in the Ukraine but was raised in Spain. Before setting up EduCredit, he worked for First Circle, the largest technology-powered SME lending platform in the Philippines. Daniel, on the other hand, is a Spaniard who worked at Amazon, Rocket Internet, Arthur D. Little, and other tech start-ups in Spain. The duo set up shop in the Philippines not only to take advantage of the business opportunity in the local financing space, but more so because of the vibrancy of the economy and imminent explosion of tech-based businesses. EduCredit is funded by big names in the venture capital field such as Atler of Singapore and iGlobal Financing Services.

What is interesting about EduCredit is that they only provide loans to students in the information technology field, whether in traditional universities or online courses. They only accept applicants in the college and post-graduate level. Vasyl and Daniel believe that the shortage of qualified IT professionals will become more acute in the future given the rapid pace in which technology is changing how we live, work, and enjoy our leisure. Even today, one out of every five jobs that are in demand in the US is for an IT professional. Most sought after are those who know how to write code and those who can navigate cloud-computing platforms. These jobs command a salary of more than $100,000 a year, allowing a steep rise in income for talented Filipino graduates. In fact, the demand is so great that EduCredit can place outstanding students in jobs as soon as they graduate. The job can be on a remote basis so they don’t have to live abroad and deal with the high cost of living.

Loan applications at EduCredit are done online. There are only three qualifications needed for a loan. One must be a Filipino; must use the proceeds solely for tuition fees; and be credit worthy. The applicant can be a working student or a full-time student with a guardian or co-maker.

Interest rates can vary from one to three percent per month, depending on the applicant’s credit score. There is no limit to how much EduCredit can lend so long as the monthly installments do not exceed 25% of the borrower’s (or co-maker’s) salary. Payments can be on a lump sum basis or in monthly installments of up to 12 months.

How are EduCredit’s terms different from traditional banks?

Student loans fall under the personal loan category in traditional banks. They also grant collateral-free personal loans on the back of a certificate of employment and proof of income through one’s income tax return. As a rule of thumb, banks can lend up to 170% of a borrowers monthly salary if the credit term is 12 months and up to 200% of salary for terms of 24 or longer. Interest rates range from 0.99 percent to 1.4% per month.

Traditional banks offer lower interest rates than EduCredit, the latter being at par with interest rates of credit cards. However, the rates of EduCredit are still lower than that of pawnshops and private lenders.

EduCredit’s key advantage is that they can process a loan in as short as two days, compared to banks which could take weeks, if not months. In addition, traditional banks sometimes require that the borrower maintain an account in their bank with a specified average daily balance. EduCredit has no such requirement.

EduCredit also claims to be more flexible. While banks can freeze accounts or demand full payment of the loan should a borrower default, the online lender says they “understand that there are various reasons for a non-payment, so are always in touch with our clients and will work with them to help them repay the loan.” In other words, EduCredit claims a personalized approach to lending as opposed to some banks which can be impersonal and inflexible.

Since owning a computer is an necessity for anyone studying an IT course, EduCredit grants separate loans to its borrowers to acquire a computer. The loan can come in the form of a lease-to-own scheme or a direct loan, payable by installments.

Bad loans are the main pitfall of EduCredit’s business model given that all the loans are uncolateralized. When asked how they minimize the risk of defaults, they said that they use a program with a special algorithm to ascertain an applicant’s credit worthiness. They did not expound on the technology but I am familiar with a Ukrainian program that correlates data obtained from an applicant’s smartphone to his/her paying behavior.

Evidently, applicants with bad paying habits have similar patterns, and vice versa. For instance, if an applicant has a record of not answering calls, frequently changes his/her e-mail address, has other delinquent payers in his/her address book and frequently plays games (Candy Crush in particular), that applicant is probably of high risk. Applications filled-up at night for an extraordinarily long period also raises red flags.

On the other hand, those who stick to one e-mail addresses, those with bank apps, sports apps (eg. Fitbit), travel apps, and food delivery apps are indications of a good payer.

There are hundreds of other data points put into consideration but these examples should give you an idea of how certain finance companies determine credit worthiness.

While EduCredit’s loan offerings may not be the cheapest in the market, it remains to be the easiest to obtain. It serves as another option for financially challenged students who would otherwise drop out of school. Keeping children in school is key towards increasing our Human Capital Index and consequently, maximizing our demographic dividends. For this, EduCredit serves a good purpose.

Andrew J. Masigan is an economist.

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