The Philippine Credit Gap

<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody> <tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSdliuW627ujv3Ju7ZddELO0fT9miE1AbjVwFkyPd4zHADA3xRJQdxq0jGbdlmXusx3KSOR_46SU63iDaoNt2dXMLeHwtJauSev9RfdlnTXpIn6GJykCkRP-OCOQjWraHOS9mDg-MTbuJG/s1600/bumbay.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSdliuW627ujv3Ju7ZddELO0fT9miE1AbjVwFkyPd4zHADA3xRJQdxq0jGbdlmXusx3KSOR_46SU63iDaoNt2dXMLeHwtJauSev9RfdlnTXpIn6GJykCkRP-OCOQjWraHOS9mDg-MTbuJG/s400/bumbay.jpg" width="400" /></a></td></tr> <tr><td class="tr-caption" style="text-align: center;">An integral part of the economy</td></tr> </tbody></table> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <span style="font-size: large;">Recent news about the “5-6” Bumbay financiers have been the staple of headlines. These are the ubiquitous motorcycle riding financiers for many of Filipinos. These Indian nationals have been part of the trade and business landscape of the country for almost 100 years. They have a niche carved in the “informal” lending business so critical to the “underground” economy.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">It is already recognized that the underground economy employs more Filipinos than the top 100 corporations. In fact, the Micro enterprises comprise more than 80% of businesses in the country. But where and when did this start?</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Contrary to current belief, there was a similar mode of financing more than 100 years ago. Being an agricultural country, Filipinos also obtained loans then. But it was not in the form of money. Loans were given in the form of palay. Small farmers would borrow palay to be repaid in palay twice a year since there were 2 seasonal harvest times. The palay borrowe will be repaid with interest also in the form of palay.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">But the shift gradually from agriculture to commercial due to urban migration also necessitated such small scale borrowings and lendings. Instead of farms, Filipinos in the urban areas would put up stores and food stalls. The traditional lending institutions such as banks would never touch these small enterprises since the risks were high, processing in terms of credit investigations and even loan monitoring had a higher overhead than the expected credit yields. Of course, these businesses would never have the needed security or collateral.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Thus, the Bumbays came into the picture. They of course would lend and then collect every day the loans payments. They would be part of the community in such fact that they provided a service to the community by easy lending terms but at interest rates as high as 12% per month. In so doing, they would also have the funds to further expand their clientele in financing.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;"> This is where the problem lies. A segment in the economy that needs financing but with traditional institutions unable to serve their needs. An informal source of financing that is considered illegal but is also seen as indispensable.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">The government must fill in the gap with relaxed credit rules and guidelines that will enable Filipinos to bridge the credit gap that is so important I economic development. This is the only way that the underground economy still survive and even thrive. It must be noted that a vast segment of the population survives only because of this economic sector.</span></div> <div style="text-align: justify;"> <br /></div> <br /> <br /> <br /> <br /> <div class="separator" style="clear: both; text-align: center;"> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 7370655980421766274&target=facebook" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0S0FvmVeOZsZsyHBRYXs6SOZJFhYBhuQl7OyKadUhy4moMHToFTEST_ch1O_s7SEAdn5dqXBJMznFjilw7Ml42IQSpvsFeEt2olcocpNz3nSnB67pdCgiyERJ8dQXDr_rMeDI_fG1ydc/s1600/sharefb185.png"></a> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 7370655980421766274&target=twitter" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOVWTbY-f69CzSsrK9okrvKibUin1YURVntTu2W1qH6so7vbU6RiR36tV5fVzui_gG4ArLMrsG3k4OvyDg33RZO134rMkgTJC0y_fHDi-Zxcf29jZSC3xcypmVNJ8EWhpyL9MiVhAa7vM/s1600/sharetw185.png"></a></div>

Finance Op-Ed Socio-Economic The Philippine Credit Gap

An integral part of the economy Recent news about the “5-6” Bumbay financiers have been the staple of headlines. These are the ubiqui...

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The Challenges of Filipino Housing

<div class="separator" style="clear: both; text-align: center;"> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigcjA7vafaMY7EwKHgVWBur76hSgYwN5P637ySFgJcuGNXp5cBys0ZDlom8SiBzvcaPG-RY-O49jrlwK0aWRNqUxtTcxSkzNoopgXjEAzgBg6pZCUd-DyYq85XebyP6_WmCVB9GjpC4wtw/s1600/Housing.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="255" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigcjA7vafaMY7EwKHgVWBur76hSgYwN5P637ySFgJcuGNXp5cBys0ZDlom8SiBzvcaPG-RY-O49jrlwK0aWRNqUxtTcxSkzNoopgXjEAzgBg6pZCUd-DyYq85XebyP6_WmCVB9GjpC4wtw/s400/Housing.jpg" width="400" /></a></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <span style="font-size: large;">They said that when Magellan first stepped foot on Philippine shores, all Filipinos became squatters.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">The historical roots of this country’s housing problems still haunts the country. In the United States, one of the indicators for its economic performance is based on how many houses were built for a year. This dates back to the boom years after WWII.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">In the Philippines, the burgeoning population of 102 million as of the current date give population pressure to land ownership and homesteads. This also competes with available land for commercial, agricultural and industrial purposes.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Resolving the challenge of affordable and sustainable housing has long been a subject of many discussions and forums among think tanks, governments, experts, industry stakeholders, and the non government organizations. But this lingering problem continues to persist.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">An estimated 56% of the population lives in rented or even informal housing. This is a stark reminder of the need for housing with increasing population as a backdrop.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Effective solutions to address inadequate housing has yet to be formulated and more so implemented.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">According to a paper written by Zaigham M. Rizvi last year for the World Bank, more than one billion people—or one out of seven persons on the planet—are now slum-dwellers. Asian cities such as Karachi, Dhaka, Mumbai, Kabul and Manila have some of the world’s largest slums.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">“Asia, which is already facing a massive housing backlog, will soon be facing an even bigger housing challenge—compounded by the deterioration of the existing housing stock and the continuing shrinkage of household size. The housing deficit, with demand outpacing supply, is destined to intensify today’s already-massive housing backlog,” said Rizvi, an expert consultant on housing and housing finance to the World Bank Group.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">“Despite government promises to alleviate the situation, most countries are making no progress toward meeting the housing challenge. Thus ground realities are fast deteriorating and are getting complex for urban planners for viable and doable solutions,” he had said in the paper.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">The Philippines needs socialized housing owing to the socio-economic conditions not only of its D and E socioeconomic brackets but also from the “C” class or middle class. The country needs to reverse the backlog of 5.7 million units registered last year 2016. That would entail building 2,600 housing units everyday for the next 6 years</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">“The massive housing backlog in the Asia-Pacific region—made all the worse by the absence of adequate, affordable institutionalized housing finance and the apathy of stakeholders in addressing housing-related issues—requires an assertion of political leadership that goes far beyond political sloganeering. It is imperative that political leadership comes forward, in a determined manner to take on this challenge, by mobilizing urban planners, academic scholars, local governments and regulatory authorities,” Rizvi had said.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">This only highlights the need for socialized, affordable housing that are located in non-hazard areas since the Philippines is one of the most disaster prone countries in the world.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <br /></div> <br /> <br /> <br /> <br /> <div class="separator" style="clear: both; text-align: center;"> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 7013811876782979906&target=facebook" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0S0FvmVeOZsZsyHBRYXs6SOZJFhYBhuQl7OyKadUhy4moMHToFTEST_ch1O_s7SEAdn5dqXBJMznFjilw7Ml42IQSpvsFeEt2olcocpNz3nSnB67pdCgiyERJ8dQXDr_rMeDI_fG1ydc/s1600/sharefb185.png"></a> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 7013811876782979906&target=twitter" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOVWTbY-f69CzSsrK9okrvKibUin1YURVntTu2W1qH6so7vbU6RiR36tV5fVzui_gG4ArLMrsG3k4OvyDg33RZO134rMkgTJC0y_fHDi-Zxcf29jZSC3xcypmVNJ8EWhpyL9MiVhAa7vM/s1600/sharetw185.png"></a></div>

Finance Socio-Economic The Challenges of Filipino Housing

They said that when Magellan first stepped foot on Philippine shores, all Filipinos became squatters. The historical roots of this ...

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Gifts and Curses

<div class="separator" style="clear: both; text-align: center;"> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr97brBiDeli0U1sCdYo4TmwKGbjWtz5D_7osMgGMipnXhTuy4n7daJnXB8Az5lP-RLN0RWwSpU88vjU6dxI1Sm0BiikP_fGCFix7dBVlArCSos6leTxYQDau0ftYlI2HJv9l4g9hmxETq/s1600/Philippine+Tragedy.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr97brBiDeli0U1sCdYo4TmwKGbjWtz5D_7osMgGMipnXhTuy4n7daJnXB8Az5lP-RLN0RWwSpU88vjU6dxI1Sm0BiikP_fGCFix7dBVlArCSos6leTxYQDau0ftYlI2HJv9l4g9hmxETq/s400/Philippine+Tragedy.jpg" width="400" /></a></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <span style="font-size: large;">I remember when the world started to open up. I was in 1st grade and I started to learn how to read. I once felt amazed on what the world had to offer. I can now choose between Coke and Pepsi because I can read. I knew that it was called Chippy since I can read. A flood of knowledge cascaded when I found that 1937 Reader’s Digest tucked in one of my grandfather’s bookshelves.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">But along with obtaining information, there came the responsibility of not only keeping it but also using it the right way. When I read that copy of Time Magazine with the emaciated child, I learned of hunger. Not the hunger I daily feel but of a hunger that is deliberate. It then explained to me things that were unwritten. The day I had to accompany my mother and aunt to a store further down the street and wait in line. I discovered that the same situation was also [present but to a far lesser degree. We had to wait in line for the National Grains Authority truck to deliver rice. Those in line were only allowed to purchase 5 kilos of rice. There were no assurances when the truck will be back.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">That explained why some of my classmates would defecate inside our classroom much to laughs from us. Then other classmates would tell stories of how their rice was mixed with corn or kamote (sweet potatoes) to augment them. That of course became the source of diarrhea. The same story was recounted by my sister to happen in their classes. That was a time in our history that seems to have been conveniently forgotten but hunger still stalks these lands. I have only to go to our school that is beside the church every Saturday. The church and school have feeding programs and that is a laudable program. What must be considered is that those styropor food containers must also include eating utensils. I find it obscene to take pictures but I have seen with my own eyes how the children eat with their hands and the food packets were just laid  on the sidewalks. The children were eating like dogs. In fact, our family pet, Khal has better food containers.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">How did I arrive at this? It is because I learned how to read. I learned through the structured instructionals at school how to analyze and evaluate. Those are the same skills that I have applied throughout my professional career that ranged from banking, finance, project development and Complete Staff Work at the Presidential Management Staff in the palace at a given span of time.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Now, I use it still in everyday life. Those skills have managed to feed me and put a roof over my head. I have met people of high standing because of it and I have so many times broken bread with them and even got to know more about them and they got to know me. Such contacts have also given me a modicum of standing and connections. I made friends and also enemies because of these skills but the ledger points to assets more than liabilities.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Today, I use those skills in trying to help those that need help but we all know that these are not enough. Analysis and evaluation, forecasts and projections are now second nature to me. At a certain level, I try to turn it off since it always adds to the same thing. That the bottomline is we are losing more than winning. It is not a breakeven proposition. It seems that every day, more of the children end up eating on the sidewalk every morning. By evening, while walking home, I get to see not only children but entire families eating like dogs on the sidewalk. I will do the math on my head and I discontinue before arriving at the same “solution” since it will mess up my evening.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">This is what is happening to many of us now. Having been blessed with education and above all discernment, we having been cloaked with the mantle of critical reasoning are able to see things as what they are. We are now faced with choices on what to do about these gifts. To turn a blind eye and have tunnel vision on what we want to see and do or use the gifts for a greater responsibility bestowed. We used to marvel at our abilities and talents but then realize what must be done. The country is in need of those gifts now more than ever.</span></div> <div style="text-align: justify;"> <span style="font-size: large;"><br /></span></div> <div style="text-align: justify;"> <span style="font-size: large;">Truly, ours is a gift and at the same time a curse. </span></div> <div style="text-align: justify;"> <br /></div> <br /> <br /> <br /> <br /> <div class="separator" style="clear: both; text-align: center;"> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 1225335487009640657&target=facebook" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0S0FvmVeOZsZsyHBRYXs6SOZJFhYBhuQl7OyKadUhy4moMHToFTEST_ch1O_s7SEAdn5dqXBJMznFjilw7Ml42IQSpvsFeEt2olcocpNz3nSnB67pdCgiyERJ8dQXDr_rMeDI_fG1ydc/s1600/sharefb185.png"></a> <a href="http://www.blogger.com/share-post.g?blogID=1985206085145330708&postID= 1225335487009640657&target=twitter" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOVWTbY-f69CzSsrK9okrvKibUin1YURVntTu2W1qH6so7vbU6RiR36tV5fVzui_gG4ArLMrsG3k4OvyDg33RZO134rMkgTJC0y_fHDi-Zxcf29jZSC3xcypmVNJ8EWhpyL9MiVhAa7vM/s1600/sharetw185.png"></a></div>

Nationalism Op-Ed Patriotism Socio-Economic Gifts and Curses

I remember when the world started to open up. I was in 1st grade and I started to learn how to read. I once felt amazed on what the wor...

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