Category Archives: Banking & Finance

Coffee talk: The ways to wealth

by Geraldine Rullan-Borromeo
(Manila, Philippines)

Coffee talk: The ways to wealth

Bad financial habits are hard to break. Harder still to keep are financial resolutions that are aimed at unmaking the bad financial habits accumulated over the years. What is one then to do when stuck in the stark reality of a financial mess?

If one were to ask a range of financial advisers or consult financial books, the single thing they will all agree on is that savings is not only a way to grow money; savings is also a way to become wealthy.

In a recent brunch series of the Coffee Bean and Tea Leaf, Randell Tiongson, director of Registered Financial Planners of the Philippines, shared how he turned around his personal financial life.

The most striking thing he shared was that he used to be a liar and that worst of all, he lied to himself about his financial standing. Whilst he had long reformed his financial ways, he said he was still paying for his financial mistakes.

The good news is that it is never too late to rise from a financial mire. One can work one’s way out of it and get on the road towards financial recovery, just like Randell did.

As he talked about how consumerism took a crack at his financial stability, I was thinking, Randell, a finance whiz, is just like any of us. He is just as prone to the lures of advertising as the next guy. He tried to keep up with the Joneses (the Zobels; the Gokongweis; the Tans and the Sys), just like many have.

Yet what he was getting at was how our purchasing habits have formed a lifestyle that has set us on the path of fewer savings or worse, no savings.

This set me to thinking of how many people actually live within their means and how much has the power of credit lured many to live beyond said means. Living beyond one’s means not only results in a credit rating disaster. It can lead to a lifetime of debt if left unchecked. Compounded interest leads to burgeoning debt as one struggles to pay only the minimum of a credit card statement.

“We know that here in the Philippines, people put too much effort lifestyle,” shares Randell. “Whenever there are new items or sales in malls, people get out of control. We spend too much money on luxuries, and yet our problem remains to be poverty — so much poverty, so much instability. The biggest problem is our behavior.”

Randall goes on to encourage Coffee Bean and Tea Leaf aficionados that one’s lifestyle dictates whether or not savings is possible. If lifestyle changes are made to make room for savings, then the light at the end of the tunnel will soon come in sight. Developing the habit of saving is a lifetime lifestyle habit that one must make to achieve financial stability. To begin, one must stand in the truth of what one can and cannot afford and begin to shave of expenses that may be turned into savings instead.

“If you ask a lot of people right now, their level of savings is not that ideal,” shares Tiongson. “There’s a study that in the Philippines, we only save about 18 to 20 percent of our income. When you compare that figure to other countries such as China, Singapore, Malaysia, Thailand, their savings are at about 30 percent. Knowing that ours does not even reach 20 percent makes us realize that we are going to have a problem in the future. There’s a magic number for saving and spending-if you save about 30 percent of your income, you’re going to be financially stable. In fact, you could be rich,”
he adds.

When Randell was asked how one may teach children to save, as well as not to be consumer crazed, his answer to both questions was one and the same: “Live it!” he admonished. If one is teach a child anything, the first step is to set the example. The buying and saving habits of parents can have more impact than constant lectures.

This brunch series: New Financial Habits for a Brighter Future is part of Coffee Bean and Tea Leaf’s Great Exchange Program, highlighting the new Single Serve Beverage System. It is a personal barista coffee and tea maker that can make up to 70 varieties of Coffee Bean and Tea Leaf products right in the office or at home.

For more information log on to www.coffeebean.com.ph.

Your money and your life

by Geraldine Rullan_Borromeo
(Manila, Philippines)

Published in the Daily Tribune Life
June 9, 2012

Getting your money life in order at any age is the result of a determination to be financially stable, or so we think. Who is not up for having savings while enjoying life? Who is not up for an emergency stash that can take the financial burden out of the emergency situation? Finding the balance between saving and still living an enjoyable life has been elusive to many.

One of the causes of the imbalance is the sense of what makes
life enjoyable and to what extent is one willing to finance that enjoyment. For those who are hardly making ends meet, the enjoyment of life is not even in the equation as they are
hard put to even pay the basic bills they are beset with.
Savings in a situation like that may seem a luxury one cannot afford.

Financial gurus, left and right, however, have remained in
agreement that the act of saving or building capital is the
first step to financial stability. Developing the habit of saving money on a monthly basis, even in cases where there seems to be no room for it is the key to build capital. The most common argument for it is the multiplication of a miniscule amount that one can spare, even an amount as low as P10 per day. Over a period of time, the multiplier effect creates savings and over a longer period of time the savings can be treated as capital.

Cutting back on little luxuries that define our lifestyle may equal savings over a period of time to create savings, an emergency fund and even build capital for a dream long sought. How one can actually do this in a defined, very simple and practical way that a non-finance person can understand has been a challenge to many.

Recently, the Bank of the Philippine Islands (BPI), in line with its commitment to help the nation build a citizens of savers and yes, even capitalists, invited finance guru, Suze Orman, to host several events to address its individual and corporate clients finance questions on how to achieve financial stability.

In line with BPI’s financial wellness advocacy, it regularly makes available financial advice to its individual and corporate clients in its campaign to heighten financial literacy.

In one of the forums, which was held at the BPI headquarters in Ayala Avenue corner Paseo de Roxas, Makati City, local celebrity Maricel Laxa-Pangilinan asked Orman how to teach her children to use their allowance wisely. Orman immediately asked Pangilinan if her children knew why they had an allowance in the first place and if they did anything to earn it. Orman said that even the simple act of giving an allowance to a child, without the child understanding the reason he or she is receiving money, what it is for and how to value it, may spell a finance disaster to a child’s future.

The sense of entitlement to money, the good life, new gadgets, new clothes, new cars, etc. has resulted in people acquiring things they cannot afford. Opening a savings account for a child without making the purpose clear to them opens up a deluge of problems. If it is clear that the savings is for a college fund then the child knows that it is not to be spent.

Giving a child access to funds then denying them the freedom to make choices on how to spend it confuses them and may make savings nonsensical to them. Thus, making clear what money is for and allowing children to make decisions on money allows them to make their mistakes now while you can still guide them. Giving them clear choices, even simple ones help them to grasp the concept of money and savings.

An example Orman shared on how to do this is to take a
stash of cash and show it to a child. The child is then asked
to line up their favorite toys that they purchased and have them state the value they paid for it. Orman then lines up the cash alongside the toys according to their purchase value. After she asks the child would you rather have the cash or the toy? Almost always, the child wants the cash.

Orman then says, but the cash is mine, I saved it and the toy
is yours, you bought it. Orman then takes the cash back to
show the child that the toy they may have rashly bought a few
weeks or months ago is not as precious now when stacked
up against hard cash.

In a series of books, The Action Plan; Women and Money; The Money Book for the Young, Fabulous and Broke; The 9 Steps to
Financial Freedom; Suze Orman’s Financial Guidebook; The Road to Wealth: Suze Orman’s Complete Guide to Your Money;
The Laws of Money, The Lessons of Life; and The Courage to be Rich; You’ve Earned It, Don’t Lose It!, Orman gives a simple to follow plan on how to take hold of one’s money, keep it and make more of it and while spending wisely along the way.

With the proliferation of confusing financial advice and terms, a lay person who wants to take the first steps to financial wellness is most often hard put until they get to hear Orman’s advice. Orman has been cited as “force in the world of personal finance” and a “one-woman financial advice powerhouse” by USA Today.

Aside from garnering several Gracie awards and being a two-time Emmy Awardee as a television host for the Suze Orman Show, she also contributed to the Oprah magazine and the Costco Connection magazine.

In 2007, Business Week chose Orman as the only woman in the top 10 list of the most motivational speakers in the world. In 2008 she received the National Equality Award from the Human Rights Campaign; the Amelia Earheart Award for empowering women and the Time 100 citation as the World’s Most Influential People. In 2009, she was the recipient of the Visionary Award from the Council for economic education and was 18th on the Forbes list for the most influential women in media. In 2010, Forbes honored Orman as one of the World’s 100 Most Powerful Women.

Alongside all these distinctions, she earned honorary degrees as Doctor of Humane Letters from the Illinois University and as Doctor of Commercial Science from Bentley University. Last year, she was alongside Dr. Phil and Dr. Oz on Oprah Winfrey Network in a feature entitled Ask Oprah’s All Stars.

Orman has recently launched a six-part series on “America’s Money Class with Suze Orman.”

For more information on Suze Orman log on to www.suzeorman.com For more on financial wellness programs log on to www.bpiexpressonline.com

Marriage of ‘convenience’

by By Dinah S. Ventura
(Manila City, Philippines)

What is a marriage without love and commitment? It would be a marriage of convenience — in paper only — where both partners benefit in some way but are not more deeply involved. But that is about a union between two people. When it comes to establishing ties between entities, similar qualities are required, but then it becomes a marriage of true convenience. By some extraordinary twist, a globally recognized banking corporation has brought to life this twist in “marriage” – one that is convenient, but strong; mutually beneficial, but caring.

Johanna Garcia, HSBC vice president of Corporate Affairs, explains that HSBC, just as in a lasting relationship, goes “the extra mile” for its partner businesses, adding that they are not just about impersonal banking transactions, but are equipped with relationship managers that help businesses meet their goals.

“A marriage has shared goals and open communication. There is genuine concern and unconditional love. In the same way, HSBC is poised to help businesses grow by offering solutions that are a tailor-fit for their goals and needs. Just like in a marriage of individuals, we realize that each client is different, with different goals and needs. We aim to provide them with the proper services that would help them meet their goals,” Garcia says.

In a rapidly shrinking world where businesses are going global, one needs the right partner. “A global company needs a global bank. HSBC’s Corporate Banking Group has the geographical scale that can match a multinational company’s worldwide footprint, and yet have the local knowledge on how things are done. At the same time, as the World’s Local Bank, we understand that your business is as distinct as you are. With more than 125 years of experience in the Philippines, we have witnessed the development of the Filipino enterprise. We were in the middle of it all. …Our experience (can) work for you,” Garcia shared. “Our edge is our capability, experience and global reach.”

According to HSBC’s senior vice president and head of Corporate and Institutional Banking Junie Velasco, a company needs a good bank – one that offers a comprehensive range of services that are flexible enough to fit the company’s needs. “For different types of customers, we have different solutions,” he said.

Indeed, from veteran businessmen to the new generation of entrepreneurs, HSBC has played a part in helping them succeed.

Hiro Asandas, president of the New Creation Manufacturing Inc., Hello Dolly Manufacturing Inc. and Chelsons Manufacturing Inc., ventured into business as a young man in 1959. He moved to the Philippines from India when he was just 23 years old in 1954. Seeing a need for better quality bed sheets at the time, he set up his own business manufacturing comforters, bed sheets, pillowcases and towels under his brand Canadian.

With guts, vision, “and of course Hongkong Shanghai Bank” (known today as HSBC), Asandas slowly but surely grew his manufacturing business and now also produces infant and children’s wear. He was able to acquire the license for Disney, Snoopy and Looney Tunes for an infant’s line and beddings in 1995. His company’s character department eventually expanded to hold the license in 10 countries with over 15 brands.

Janina Dizon-Hoschka, a third-generation jewelry designer whose family has been in the jewelry design industry for many years, is pleased with the way HSBC has enabled her to “cross boundaries,” as she expands her business to other parts of the world. Dizon-Hoschka joined the family business in 1991 and opened her own business, Janina, at the Peninsula Manila in 2007. Based in Manila, the jewelry designer travels extensively to attend trade fairs and look for opportunities to bring her designs abroad. She is currently exporting to Japan, India, France and Italy.

In the world of luxury brands, Anton Huang is a force to reckon with. Huang sits as executive vice president of three of eight companies under the conglomerate known as the Rustan Group of Companies, including Stores Specialists Inc. (SSI), Rustan Marketing Corp. (RMK) and Rustan Marketing Specialists Inc. (RMSI). SSI is largely recognized for its role in bolstering the upsurge in luxury retailing in the country. Its range of boutiques, carrying some of the world’s most prestigious brands, has placed the Philippines in the world’s shopping map.

Rustan’s was founded more than 50 years ago by his grandparents Bienvenido and Glecy Tantoco. Under Huang’s helm, the group of companies grew exponentially, taking the family’s department store business into the new age. “Sixteen years ago, SSI had three brands and a few stores. Now it has 42 brands and over 400 stores,” Huang shared, adding that they are also planning to open the first Hermes store in Manila come December. They are also “experimenting with e-commerce,” launching a web site selling school and office supplies under the company Office One Superstore.

Asandas, Dizon-Hoschka and Huang are some of the leading businesses who have chosen to bank with HSBC. “International banks help us build international relationships,” Huang noted. “That’s how it started with us and HSBC.”

“When we need them, they are there. And the name HSBC is recognized by our partners here and abroad. The name impresses others; it makes them think we could be trusted. And their service is excellent,” praised Asandas.

“They have 3,500 offices in 85 countries. HSBC’s international connections are vast,” added Dizon-Hoschka.

With a partner like that, companies of any size can expect to grow their business in this rapidly changing world.

Investing in Property

by DINAH S. VENTURA
(Manila City, Philippines)

INTEREST RATES AS LOW AS 6.99 PERCENT, WAIVED LOAN FEES AND CUSTOM REPAYMENT OPTIONS, IS HSBC ADVANCE’S HOME LOAN PROMO TOO GOOD TO BE TRUE?

For many, the dream of buying or building their own home seems farfetched. ‘Can I afford it?’ This is often the single biggest obstacle for ordinary Filipinos today. As hard as many of us work to achieve a dream like this, it often seems as if what we earn simply isn’t enough to make it happen.

Unless we hit a stroke of luck at the lottery, we are left with the following realistic choices: find an extra job or sideline; work abroad; or borrow money. The last option is the most promising as it offers the fastest reward – that is, if we apply with a bank and qualify for a home loan, we get to start with that dream right away!

“When the time is right, owning your own home climbs to the top of almost everyone’s priority list,” says Johanna Garcia, HSBC SVP and Head, Group Communications and Sustainability. She continues, “Whether it’s a cozy little studio for someone on the way up the corporate ladder, a starter house for a young couple, or an upgrade to an existing home to reflect a new phase in your life, nearly everyone dreams of one day buying their own home.”

‘LOWEST INTEREST RATE’

Anna (not her real name) bought a condominium unit in Mandaluyong a couple of years ago with the aim of living there eventually. But now that it is ready for moving in, she has decided to rent a bigger unit close to the apartment she was renting in Makati because of the proximity to her office. She has decided to rent out her new condo instead because she finds it impractical to spend time in traffic just to get to work. This, however, is the least of her worries. She is flabbergasted at the 18 percent interest rate she is paying through the in-house financing she got when bought the unit. Having learned recently that her bank’s interest rate is 9 percent, she is now trying to have it changed so that she will pay through her bank instead.

Anna was right to invest her hard-earned pesos on real estate, but she should have studied several factors before deciding on the property: location, budget, design concept and financing. Contemplating the total costs, not to mention the myriad other considerations mentioned, can indeed be daunting.

Ron Logan, HSBC SVP and Head, Personalized Financial Services, advises people not to let their fears stop them in their tracks. At a panel discussion on buying property hosted by HSBC to promote its latest home loan program, Logan said, “In the local retail banking arena, HSBC has always been known as one of the best providers of wealth management services, but what our customers may not know is that HSBC currently provides one of the strongest home loan propositions available.
Recognizing the upward trend in real estate, we’ve recently launched a breakthrough home loan package with the lowest interest rates available. And if you’ve already taken out a loan from another bank, come speak to one of our home loan specialists and see what we have to offer anyway. If you decide to transfer your loan to us, we’ll not only waive all service fees, we’ll even pay any penalties and expenses you incur from the loan transfer!” he revealed.

INVESTMENT OPPORTUNITY

Aside from acquiring your own place to live versus paying rent your whole life, buying property can also be a source of income, as Anna has discovered. At the panel discussion, David Leechiu, Country Head of Jones Lang Lasalle Leechiu, talked about the ins and outs of “shopping” for property, such as where to look, what to look, what to look for and how much it could cost you, among others.

According to Leechiu, one can never go wrong with property as an investment. Property, he says, offers viable investment opportunities. “The Philippines is in the early stages of a boom,” he said. “Land values in some prime villages in Metro Manila such as Corinthian Gardens, Ayala Alabang, and Dasmarinas have increased from 50 to 100 percent,” he continued.

Citing some examples, Leechiu said that in Makati, one could buy a condo unit in Paseo Parkview for P3 million and then rent it out for P18,000 a month. A unit at Essensa at Bonifacio Global City can fetch up to P28 million with monthly rental at P165,000. A 160 sq. m. unit at another upscale location can be offered at a monthly rent of P115,000 for a 7 percent yield. And, Leechiu noted, rental income will last a long, long time. He added that these prices were based on unfurnished units and did not include association dues.
Leechiu says that before investing in property, prospective buyers should educate themselves on issues such as trends in interest rates, infrastructure, credit ratings, developer profiles, and changes in policies. “Respect your asset – real estate is long term. It will make money for you in good times or bad.”

In fact, condo rental can yield owners as much as 7 to 9 percent, Leechiu explained, compared to, say, the 4.59 percent earned from a year in Treasury bills.

“The demand for condo housing is very, very large,” he stressed, adding that out of 15 to 20 million households all over the Philippines, 5 percent will be able to afford a P2-million condominium unit. This is one reason big developers like SM, Ayala, and Robinsons have gone into lower-end projects, where units go for about that price.

IMPORTANCE OF DESIGN

“Design has a very important role in determining the price of property,” said Luigi Sison and Cocoy Leyva of 3Arkitektura.
Investing in property is a huge step, but one should not make the mistake of neglecting the design aspect. “Choose your architect well to create the home you can live in for a long time. Professional advice is important so that you don’t end up with a place that looks dated after a few years. Strive for a style to last you a good 10 years,” advised Sison.

“Although it can be a bit more difficult to maintain, the Modern Minimalist is a popular and affordable design to execute,” Leyva added.

“When hiring an architect,” he said, “figure out what you want and set your budget.” Asked for a ballpark figure when building a home, the architects revealed that normally, a good benchmark is P20,000 to P25,000 per square meter for a starter home, not counting the lot price. Going higher, at P30,000 per square meter, for instance, you can have better finishes.

The use of reinforced concrete, steel casement for windows, asbestos, incandescent lighting, and hazardous materials like lead, are becoming outdated, Sison said. “Homes now use more steel-framed structures, bigger window and wall openings, compact fluorescent lighting, gypsum boards and fibercement boards, and synthetic stone.”
When asked what the common mistakes are when people attempt to build their first home, the architects said, “Clients trying to play the role of architect, engineer, and interior designer, hiring a manong carpenter to execute photos plucked from a magazine, or hiring a fly-by-night contractor and pseudo designer.”
They suggest that hiring a professional to plan the project is wiser in the long term. “Paper is cheap so make your mistakes on paper. And if you fail to plan, you plan to fail!”

Indeed, planning well is the key to achieving any dream. With support from institutions and experts that care, “you might be surprised at how close you actually are to realizing that dream,” as Johanna Garcia so aptly puts it.
Log on to www.hsbc.com.ph or call (02) 85-800 or (02) 976 80 00 for more information.

EastWest Bank: Something good happens to local bank

by Geraldine Rullan-Borromeo
(Manila, Philippines)

Published in the Daily Tribune Life 25 October 2012

In the world of cold corporate banking, a personal touch differentiates one bank from another. Entering just any establishment with whom one has not established an ongoing banking relationship will usually not warrant personalized service. This is the kind of service that assures one of their importance in that bank regardless of the amount of their investment.

Often, corporate banks that have opened branches in every corner of every city in the metro, offer a pseudo-personalized banking approach that only offers convenience as far as location access is concerned. Often, other customers of other branches not known to the banking officers are accorded less than personalized approach. This is a common banking practice that makes one feel that he has just drowned in the collective sea of customers in a big corporate bank.

EastWest Bank, in recently launching a new corporate signature, unveils its new corporate strategy to bring itself closer to each customer’s needs, transforming itself from being a mere big corporate bank to deliver its brand promise that EastWest “makes good things happen.”

After an in-depth brand assessment and audit by FutureBrand, the Singapore-based international branding expert commissioned by EastWest Bank, EastWest ties up its commitment with its signature. The brand color is a refreshing green that speaks of rebirth and regrowth, with purple and magenta, giving off a burst of color and creativity that taper the arrows of customer-oriented direction of the bank.

The colors are non-traditional for a banking institution, another signal that EastWest delivers banking services with a fresh approach to its customers in a more personal and vibrant way that addresses their needs.

EastWest Bank president and CEO Antonio Moncupa Jr. said, “The new logo was created from two arrows representing the directions of the bank’s name, coming together to symbolize the relationship between bank and customer, in the heart of which good things happen. It also communicates our intent to become a world-class service provider, and our focus on customer benefits and aspirations consistent with our new brand tagline, ‘Your Dream. Our Focus.'”

EastWest Bank chairman of the board Jonathan Gotianun said, “The rebranding exercise is part of our holistic effort to bring EastWest Bank to a higher level of performance, competitiveness and strength. It is not just about changing our logo or adopting new corporate colors. Our brand represents the value the bank delivers to our customers and our brand promise to them. We hope this rebranding effort will help focus our energies and align all our efforts consistently and more effectively towards delivering our brand promise to our customers.”

EastWest Bank’s new logo heralds its corporate rebranding in terms of service, portfolio and, access to customers. EastWest continues to offer new banking services like the reloadable pre-paid Visa Card that can be loaded up to P100,000 and the passbook + debit card savings account, an unusual pairing for most banks, but is like coffee and donuts for EastWest Bank. Providing documentation and easy access to cash is just one of the ways EastWest Bank focuses on its clients’ needs. Its Dream Home Package offers a loan amortization for only P6,988 for every P1 million loan. The East West Auto Loan promo comes with a chance to win a dream package until Nov. 6. East West Bank also offers a Titanium All-in-One Cash Rebate Card for essentials like supermarket, gas and drugstore purchases. Through all these banking innovations, EastWest Bank makes good its brand promise.

For more information, visit the nearest EastWest Bank or visit www.eastwestbanker.com or call (632) 888-1700 for Metro Manila. For domestic toll-free, call 1-800-1888-8600.