What to do with your money instead of buying an iPhone X

MANILA - This holiday season, financial planners urged Filipino consumers to invest instead of buying an iPhone 8 or an iPhone X.

In the Philippine an iPhone X retails from P78,000 to P98,000 from authorized resellers, a price considered hefty by most Filipino consumers. Yet many still aspire to get their hands on the latest Apple-made mobile device.

But it's better to invest in oneself instead of the instant gratification a person could get from buying the iPhone X, said Genecia Alloura Luo, founder of Soul Rich Woman, an online platform that offers business mentorship for women entrepreneurs.

“Use this money to find a mentor, find a good program, a good network and a good platform so that you can invest in yourself, because investing in yourself you'll know that the future is secure," Luo told ANC's "On the Money."

Online financial guru Chan Peng Joon noted that consumerism is the problem.

"That’s what makes people stuck. They are making their money and they’re spending it on stuff to impress people that they don’t even like and stuff they don’t really need in the first place. That’s the problem," Joon said.

  

Instead of buying things, Joon believes that investing in oneself "is the best investment one can make."

Meanwhile, some encourage consumers to split and allocate their money with investments still part of the pie.

When asked, Sun Life Asset Management Company Inc.'s chief operating officer Valerie Pama said she would split the money on gifts, donations and investments.

source: news.abs-cbn.com

Salve Says: A beginner's guide to investing in stocks

The stock market is fraught with risk, so it is important to arm yourself with investing smarts before you part with your hard-earned cash.

When you buy a share in a company, you become a part owner without worrying about running its daily operations.

You make money when the company earns a profit. However, you also lose money when the company does.

You can make a profit from the stock market by selling your stocks when the market prices them higher than when you bought them, Marvin Germo, a registered financial planner told ANC's "On The Money."

Share prices fluctuate every trading day depending on how the company performs. When there's negative news about a company, like when it reports a loss instead of a profit, its share price can go down.

An investor can also earn through dividends, which the company pays existing shareholders at specific periods.

"If you're a person who wants to be more passive, you want to get dividends, the more shares you accumulate, the more blocks you get, later on, the more dividends you will get also," Germo said.

The first step in investing in equities is to open a brokerage account and choose the right stock broker, said Salve Duplito, resident financial adviser of "On The Money,"

A directory of stockbrokers is available on the Philippine Stock Exchange (PSE) website.

Duplito said investors should find a broker whom they trust and works for a well-managed brokerage house that will allow them to transact easily online, which can be cheaper.

source: www.abs-cbnnews.com

When should you sell your stock shares?

When the PSE market has gone from 8,000 to 6,800 level in a span of around five months, there are bound to be nervous investors. On The Money's resident financial adviser, Salve Duplito, talks to a viewer who has one foot in and one foot out the door.

-- ANC On The Money

source: www.abs-cbnnews.com

Do you trust your insurance agent?

With the wide range of insurance products being offered in the market these days, you need someone you can depend on to point you to the right direction. Do you trust your insurance agent when it comes to being honest-and putting you and your needs before his or her own?

ANC On The Money

source: www.abs-cbnnews.com

How to earn from peer-to-peer trading

When it comes to running a business, there are always two entities that work together: the retailer and the customer.

The retailer sells the product or service, and the customer pays with money in exchange for them.

But what if a third entity is put into the picture, and the retailer acts only as a middle man between the exchange? -- ANC On The Money

source: www.abs-cbnnews.com

New bills to have bolder colors, more security features

MANILA – Old peso bills will soon be phased out but the Bangko Sentral ng Pilipinas (BSP) is reminding the public that there is still time to have them replaced before they lose value.

The old banknote series, which has been in circulation since 1985, can still be used until December 31, 2015. [PLS LINK TO "old banknote series": http://www.abs-cbnnews.com/business/05/21/15/look-peso-bills-na-wala-nang-halaga-sa-2017]

But by January 1, 2016, it can no longer be used to purchase goods and services.

By then, old banknotes in circulation should be turned over and replaced by authorized agent banks of the BSP.

Maja Gratia Malic, Cash Department Deputy Director at BSP, said these include thrift banks, rural banks, commercial banks, and universal banks.

Malic said those with old banknotes have until December 31, 2016 to have the bills replaced because by January 1, 2017, the old bills will no longer have value.

To replace the old banknotes, go to any bank even if you are not a depositor and exchange the old banknotes with new ones.

For overseas Filipino workers (OFW) carrying old peso bills, Malic said the BSP will implement a special facility for the replacement.

Starting October 1, 2016, OFWs will have to register online, indicate the total amount they wish to replace, and input the specific denominations to be replaced.

They can then have the old bills replaced for a period of one year starting the date of their registration. Registration ends on December 31, 2016.

“Without this registration form, they cannot have these banknotes replaced beyond 2016,” Malic told ANC's "On The Money."

Bills of the new generation currency series have bolder colors and enhanced security features. Images of the heroes on the bill's front side are also "younger-looking."

“This is the approximate age when they started doing their public service…to be an inspiration for the youth, they can be in public service this young," Malic said.

She added that the new banknotes have security features that are at par or even better than other countries, such as bigger and more obvious window security thread that cannot be photocopied; watermark portraits; and denomination markings only seen against the light.

 source: www.abs-cbnnews.com

How competitive is the PH real estate industry?

The local real estate industry has experienced growth that is both fast and promising, but is this enough for them to be competitive in the ASEAN region and the world?

ANC On The Money

source: www.abs-cbnnews.com

Be your own boss: Freelancing tips from author James Frey

MANILA – The number of online jobs has steadily increased in the country as the common millennial pursues a niche in an ocean of career opportunities.

According to US-based online staffing platform Elance, there are currently 1 million Filipino online freelancers in its roster, pursuing jobs in design, programming, administration and marketing.

From January 2010 to April 2014, Filipino freelancers have earned an estimated P9 billion.

But freelancing is more than just choosing a job you can do leisurely. Author and businessman James Frey said that to make big bucks, you have to treat freelancing like any other job.

“I have a work day like everybody else. Every morning I get up and I go to work just like if I was a teacher, a doctor, or construction worker. Everybody has a job, and you get up everyday and go to your job,” he told ANC’s “On The Money.”

Freelancing has its share of risks because it does not guarantee a steady monthly income. To have the extra money for special occasions and emergencies, Frey said he has followed a simple rule: Don’t buy what you don’t need.

“I’m wearing this shirt, I’ve had this shirt for seven years. I don’t need another black shirt. I wear very simple clothing. You only buy what you need. You don’t need an expensive car. I don’t wear a watch or expensive jewelry, none of that stuff matters, what matters is that you have enough money to take care of yourself and your family,” he said.

Frey is the author of A Million Little Pieces and one of the writers behind Lorien Legacies, a series of young adult science fiction books.

source: www.abs-cbnnews.com

How listed companies can tap into Islamic finance

For our Muslim brothers and sisters, investing in certain instruments isn't as easy because they have to adhere to what is called the Shariah Law.

To help broaden their options, the Philippine Stock Exchange has been working on encouraging companies to be compliant to this set of rules, and create what is called a Shariah Index.

-- ANC On The Money

source: www.abs-cbnnews.com

Want to invest in the stock market? Learn this first

When it comes to investing, knowledge is key. So if you're a first timer in the stock market, you better not be investing blindly. Good thing there are several how-to-guides, books, and even seminars that can help you get started.

ANC On The Money

source: www.abs-cbnnews.com

How a former 'credit card-aholic' got out of debt

MANILA – When a bank offers you a credit card with a P200,000 credit limit, annual fees free for life, and only proof of employment as requirement, will you accept it?

For then-office employee Aldwin Tanjutco, who admitted that his salary wasn’t enough to buy the things he wanted, the decision was easy.

“I felt empowered because I’ll be able to buy already the things that I want to buy even without earning money first. It gave me the illusion of cash, cash that I don’t even have — unlimited cash. With the card, I just spend and spend and spend,” he told ANC’s “On The Money.”

Tanjutco said he had second thoughts on using his credit card for purchasing items, but he gave in to the temptation to spend.

The high credit limit, unfortunately, became a spending target for Tanjutco.

“I thought about it, but the temptation of spending overcame the intention on how I’m going to pay for it,” he said.

In just five months, Tanjutco maxed out his credit card and found himself in huge debt. He also started to incur a large amount of interest because he wasn’t able to pay his monthly dues.

“I am spending more than I’m earning, so I wasn’t able to pay it in full, in fact I was only paying the minimum. Sometimes, even below the minimum. So you can imagine just how much interest they are charging,” he said.

He began paying off a chunk of his debts with mid-year and Christmas bonuses, and when he felt that he could handle his debt, he asked the bank to increase his credit limit.

His credit limit was increased to P230,000, which for Tanjutco, meant he could spend more.

When Tanjutco again found himself struggling to pay off his monthly bill, collecting agents began calling him, which made him realize the serious situation he put himself in.

Tanjutco said he was given a 25 percent discount to make it easier for him to pay off his debt in a 12-month period.

He learned that credit cards can be your friends, if you know how to use your credit wisely.

The next time Tanjutco applied for a credit card, however, he was denied because of his bad credit.

To clear his bad record, he sought the help of the Financial Consumer Affairs Group of the Bangko Sentral ng Pilipinas (BSP).

“I felt relieved because finally there was hope that I can clear my bad record in terms of credit score. After a day of two, a BSP director emailed me and forwarded my letter to the concerned bank,” Tanjutco said.

“I realized that I shouldn’t spend what I couldn’t pay for. I should spend below my means. If I have debts, 20 percent of what I earn, I just maintain it at that level so that I can manage it,” he added.

Tanjutco, who is now a business owner, admits that he still has debt, but now he knows how to manage it well.

“I felt empowered. I cannot say that I am 100 percent financially free, but I feel that I am moving towards what my goal is,” he said.

Abraham Co, board member at Credit Information Corp., advised consumers that being aware that there is consequence to how you behave financially, will change behavior.

“If you think that there is no consequence and you can get away with this, then you will continue your bad habits. But if you value your future, and know that there would be consequence, then that will change behavior,” he told "On The Money."

Credit Information Corp. board member Suzanne Felix, meanwhile, said credit card owners should be more responsible in their spending to protect their credit record.

“It’s about time as borrowers that we develop that sense of responsibility. The banks are doing their part, so the borrowers should also be doing their part,” she said.

source: www.abs-cbnnews.com

TIPS: Protecting your finances when selling a business

MANILA – There comes a time when entrepreneurs are faced with the tough decision of whether or not to sell the business or allow a major investor to buy a big slice of the pie.

According to John Bly, a managing member of LBA Haynes Standard, entrepreneurs should prepare their personal finances when facing mergers and acquisition opportunities.

To prepare for mergers and acquisitions if you are a small business owner, Bly suggests preparing enough reserves aside, putting yourself in a good credit position, and be ready to leverage your balance sheet.

“Your personal finances should be in order, make sure that you are ready for the transaction, that you have enough reserves, that you have enough capital, and that your bank supports you,” he told ANC’s “On The Money.”

Financial adviser Salve Duplito, meanwhile, advises entrepreneurs to “think cash.”

“Whether you are buying another business or being bought, being in a position where you either have your own cash or can easily raise it allows you to get more out of mergers and acquisitions,” she said.

Duplito said if you are being bought by another firm and your books clearly show them you are cash-strapped, you will be vulnerable.

“If you are an entrepreneur, conserve cash now and build your reserve funds more aggressively,” she said.

Duplito also suggests guarding your credit worthiness fiercely.

“This doesn’t mean don’t borrow, in fact, it means quite the opposite. Banks find it more palatable to lend to someone they know and have a good track record of payment,” she said.

Entrepreneurs should also know to how to determine the value of their business, or if you are buying a business, not to overpay.

According to Bly, when valuing a company, make sure you have the right advisers.

Choose advisers based on their capability, track record and credibility, not the size of their professional fee.

Bly explained that valuations are affected by continuous cash flow, recurring revenue and growth opportunity.

“The Philippine market is going to be hot in the next 10 years because of the growth opportunity. It’s a young population, it’s a growing population, and it’s education-based. The faster the opportunity for growth, the higher the valuation because as the buyer, you are buying future growth and future earnings,” he said.

Aside from numbers, Bly said entrepreneurs should also look out for other red flags in mergers and acquisitions, such as culture, bad accounting records, personnel files that are not up to date, and bad state of equipment.

source: www.abs-cbnnews.com

Why Alice Dixson invests in properties

MANILA, Philippines - A favorite investment among Filipinos is real estate, mostly because it is tangible, and the returns are visible in the long run.

Lamudi, a global property website focusing on emerging markets, came out with a 2014 annual report supporting this.

After surveying property owners in PH, 72 percent indicated their reason for purchasing real estate is to have the security of owning their own house. Only 5.6 percent said the property is affordable, while 4.7 percent said they had financial help from family or friends.

But 14 percent said they bought a property as a form of investment.

According to Lamudi, this number will continue to grow in the coming years.

For real estate investors like actress Alice Dixson, she's come to benefit from this investment.

"I was living in Miami Beach for a while and my sister Josie and my brother-in-law introduced me to this real estate broker. He was selling Miami condos at that time, they were so cheap. He was going, 'if you have extra money, invest, invest invest.' I did but I wasn't sure about it. I was only in my 20s and I had no idea that it would quadruple in a matter of less than 10 years. I would have had 75 percent equity within 10 years of holding it," Dixson told ANC's On The Money.

Not buying the condo cost Dixson $240,000. After four years with an initial $60,000, the value of the condo increased to $300,000.

Although this was during the property boom in the US a few years ago, Dixson has since purchased more properties in the US and the Philippines.

But before you bring out your checkbook or line up for that property loan, Dixson has a couple of tips before committing to this big investment.

"First you have to build your line of credit, once you have this, even if you don't have money but you have regular income coming in, and the banks will see that," she said.

Dixson said you also have to pay your debts on time to show banks that you are a responsible borrower.

"Always equity in investing in property, especially in the right location. It can also be gold. You can never go wrong," she said. - ANC On The Money

source: www.abs-cbnnews.com

How to deal with rising cost of education

MANILA – The rising cost of education has tapered a bit over the last decade but it is still huge.

The Department of Education (DepEd) has been making some headway in improving the public school system but this is a long struggle, according to financial adviser Salve Duplito.

“Public schools now are still crowded, lack well-trained teachers and funding for technology,” she said on ANC’s “On The Money.”

Duplito noted that the rising cost of education presents a harsh reality, and eventually, only the very rich will be able to afford quality education in the country. The rest of the population will likely go into debt, sell assets, or forego investing for their own retirement to afford quality education.

Citing a study by Pathways for Higher Education, Duplito said some public schools provide quality education, allowing its students to beat those from the country’s top private schools in national examinations.

There are three factors for quality education, the study said: very good principal, good teacher trainings, and committed parents.

“When choosing a school, don’t just go for the ones with the best names. You can look for high quality, low cost education by considering public schools with the best principals and those that train their teachers well,” said Duplito.

To deal with the rising cost, Duplito shared these strategies:

1) Create a sinking fund for education expenses

Set up a separate account dedicated solely for tuition expenses, and transfer money monthly from your expense account to this account.

2) For future education expenses (at least 5-year horizon), put your money in a low-cost mutual fund or unit investment trust fund

Go for index funds with no entry fees and a management of at most 1.5 percent.

3) If you know how to pick stocks, look for 10 stocks that are not overpriced

Choose companies with good management, who are transparent and accountable, and whose products and business model can survive the test of time.

“The worst thing that parents can do is to depend on current income to pay for education costs. Anything can happen to us. The ‘bahala na’ strategy is the worst strategy for paying for education costs,” said Duplito.

She added that education is an investment, and its rewards are far greater than the cost of tuition.

source: www.abs-cbnnews.com

How furniture industry contributes to PH economy

MANILA – The Philippine economic growth has raised most of its sectors, one of which is the ever-growing furniture industry.

With real estate developments popping up around the country, there has also been an increase in proliferation and promotion of Filipino-made products both locally and globally.

According to the Chamber of Furniture Industries of the Philippines, the sector has given its fair share of economic contributions.

In 2014, the furniture industry was able to create nearly 2 million jobs.

It has also given assistance to communities in the various regions where materials come from, and is considered one of the top exports of the country.

“It’s very important to support local talent because we are known as the Milan of Asia. The creativity of the people is being nourished in the Philippines, and the special skills from the grassroots level up to the higher level—these all contribute to the economy,” said Salvio Valenzuela, executive director of the Chamber of Furniture Industries of the Philippines, on ANC's "On The Money."

The industry, however, has also faced several stumbling blocks that have hindered its growth.

One of the issues that affected the sector is the congestion in Manila ports, which handicapped delivery of products around the country. The port congestion also raised costs of trucking services.

The disruption in electricity also affected local production.

Valenzuela said side from product development, getting to know those in the industry as well as finding avenues to find products is a good way to help furniture businesses.

“We, in partnership with government, are helping all the SMEs in the furniture industry in terms of basic manufacturing, product development, and in marketing, so we will able to continue the production line and offer products globally that are acceptable in international standards,” he said.

source: www.abs-cbnnews.com

Why you should cut down on buying 'designer' coffee

MANILA – Spending on designer coffee can be costly if computed on a yearly basis.

Buying a cup of designer coffee at least 3 times a week will cost about P500, which amounts to P2,000 for 12 times a month, and balloons to P24,000 in one year.

“If they realize that, I don’t think a lot of people would be taking designer coffee everyday because you spend at least P120 on a small cup of coffee,” Lei Sison, managing editor of Smartparenting.com.ph told ANC’s “On The Money.”

Sison believes P24,000 can be spent wisely on other things, such as a vacation or on an investment.

“You could probably plan a trip and start a holiday fund using that amount. I know some people who use their money to invest in a condo unit,” Sison said.

“Any investment of that value is never a waste. It’s an investment you could use maybe 10 years from now,” she added.

Sison said P24,000 can also be used to fund education expenses; medical emergencies; or retirement.

But for those who can’t kick the habit of drinking coffee on a daily basis, Sison suggests investing on a coffee machine to avoid paying for an expensive cup.

“We invested on a single-serve coffee machine, which tastes as good. The coffee tastes as good but I only spend about P20 to P40 a cup. Initially, the investment will be there but in the long run, if you keep using it, I think it’s worth every peso you pay for,” she said.

Other coffee alternatives are the 3-in-1 variety, home brew, or single-drip servings.

“If you make it a regular thing, if it’s a daily thing, you should just save the designer coffee for more special occasions. Maybe your daily coffee can be from somewhere else, somewhere more affordable. That way too, it becomes something it’s meant to be for—a treat. Then it really becomes something special,” said Sison.

source: www.abs-cbnnews.com

When is the right time to sell stocks?

MANILA – When is the right time to sell stocks?

A study by a chartered financial analyst showed that if momentum has been going on for around five months, stock investors should be careful.

“What I did is I did a study where I looked at all stocks across Asia and tried to identify how many months of continuous momentum before it started to slow down,” Andrew Stotz told ANC’s “On The Money.”

Stotz studied around 7,500 stocks across Asian markets except Japan, and then looked for investible stocks with a market capitalization of at least $500 million, reducing the total number of stocks to 1,200.

Tracking performance from December 2003 to June 2014, Stotz discovered that only 56 percent of investible stocks in Asia rose 5 to 7 consecutive months at least once in the past 10 years.

Forty-six percent of the time, prices were going up, but 48 percent of the time, stocks dropped.

Only 21 percent of stocks continued to give positive return for a second month while only 10 percent gave positive returns for the third month straight.

Only 5 percent gave positive returns for four consecutive months.
Financial adviser Salve Duplito explained this means there have been more losing months than winning months in the past 10 years in Asian stock markets.

The study also showed that long-lasting momentum is rare, and only 10 percent of the time does momentum last for more than four months.

“What you end up with is, let’s say about 4 to 5 months, is the period of time when momentum is fresh. But after 4 to 5 months, momentum gets stale,” said Stotz.

Stotz warned that because stock prices are rising, newcomers are at risk of crashing because they don’t know how to sell.

“The Philippines has been going on such a great run, that anytime we get great runs in the market particularly when it really starts to go [up], that attracts newcomers into the market,” he said.

To prevent crashing in the stock market, Stotz advised investors to look at fundamentals, valuation, risk and momentum.

He also advised to avoid cheap stocks that never move, and to take advantage of opportunities to make money in the market.

“If you’re into momentum investing, you’re hardcore. This is an investment style that is high risk, and if you don’t do it well, you can lose a lot of money,” said Duplito.

“Investing styles are very personal strategies, finding your own style that works with your own quirks takes time. Be patient and don’t be afraid to try new ones,” she added.

source: www.abs-cbnnews.com

What were PSE's blockbuster IPOs of 2014?

MANILA – The Philippine stock exchange (PSE) ended 2014 on a positive note, up by around 25 percent year-to-date.

April Lee Tan, vice president and head of research in COL Financial, said the PSE reached several milestones in 2014, including an increased number of initial public offerings (IPO).

“These are the names that people know about, successful IPOs include Century Tuna and SSI. Small investors could have participated through the local small investor program and they would’ve made a lot of money, and I think one of the blockbuster IPOs for the year is DoubleDragon,” Tan told ANC’s “On The Money.”

DoubleDragon is the property company owned by Jollibee founder Tony Tan Caktiong and Mang Inasal founder Edgar "Injap" Sia, while SSI Group is a specialty retailer that resells 103 international brands such as Hermès, Prada and Gucci in the Philippines.

“For the stock market, 2014 was a good year despite the fact that during the start, a lot of people were worried about it, we’re very cautious,” Tan said.

However, she noted that despite the increase in the stock market, not many Filipinos participated.

In 2013, Tan said around 500,000 Filipinos invested in the stock market. She that while the number may have gone up in 2014, it did not increase significantly.

She said value turnover in the PSE is down 20 percent, and sales of mutual fund companies are down 90 percent compared to last year.

According to financial adviser Salve Duplito, the market’s volatility in 2014 may have put off potential investors and made them cautious.

Tan, meanwhile, said investors’ mindset of looking at the stock market like a casino, and banking on the “get rich quick” scheme should be changed.

She said investors should also be taught to only invest a portion of their money.

“Studies have shown that the stock market outperforms other asset classes in the long run. So if you’re going to put your money there, you better make sure it’s long term money so that you can ride the volatility,” she said.

For 2015, Tan expects the market to move sideways despite all the foreseen risks.

“I say this is because liquidity is still so much there. There aren’t a lot of alternative investments,” she said, noting that interest rates did not go up as high as expected.

She said the PSE index may go up by 5 to 10 percent, and close at 7,000-8,000. Investors may earn cash dividends up to 2 to 3 percent per annum.

More investors are also seen to get into the foreign exchange market in 2015, according to Temie Lanaria, executive vice president of Metisetrade.

“More and more people are getting into the foreign exchange market as more people are getting more sophisticated. Most of the people now are into researching those companies that are offering alternative investments before they get into the investment,” he said.

Lanaria said more investors will look into forex as a popular alternative investment “because of its cheapest transaction costs and being the most transparent market in the world.”

source: www.abs-cbnnews.com

What to do if your credit card bill has errors

MANILA, Philippines -- The first thing you should do when you get your credit card statement is to carefully check it against your records.

But what do you do when you find a "charge" that you didn't make?

ANC On The Money's resident financial adviser Salve Duplito said to contest your credit card billing, just call your bank's hotline and make a complaint.

The bank will investigate your complaint by looking at the signature used in the transaction. If the investigation showed there was indeed a fraudulent transaction or a system error, the bank will reverse the charges.

Alex Ilagan, executive director of the Credit Card Association of the Philippines, said most banks would temporarily reverse the charges as soon as you complain. This would mean you will not incur any interest and penalties while the investigation ins on-going.

Banks' investigations usually take some time. One possibility is another bank processed the transaction, which means your bank would need to coordinate with the other bank.

Duplito said the process can also become more complicated if the charges were incurred overseas.

She also reminded cardholders not to delay their complaints, or else the window where they can contest the charges will close.

"You must call the bank within 2 weeks after the statement date. Most cardholders get their billing statement a week after the statement date, so you only have effectively around a week to make sure your statement is accurate," she said.

Duplito said she did an informal survey and found most people don't check their credit card billing statements.

"What's alarming about this is the anecdotal increase in credit card fraud recently. If you were victimized by fraudsters and you didn't check your billing, you just keep on paying for their shopping sprees and not know it," she said.

Ilagan said it is every cardholder's responsibility to double check their bills and correct tghem if there are any errors.

He said the most common problem of cardholders is failing to recognize the company name on credit card bills. Some merchants use a different company name in billing statements, which add to the confusion.

Duplito suggested cardholders create a "budget tracking system" to keep track of their expenses, including credit card transactions. This will make it easy to double-check the accuracy of your billing statement at the end of the month.

However, it's a different case if you lose your credit card and charges were made before you discovered this and reported it to the credit card company.

"Card companies must simply waive charges for all errors and fraudulent transactions even before a card is reported as stolen. After all, they reversecharges from a card victimized via skimming. That's almost teh same as somebody stealing your card from you physically," Duplito said.

Most of these problems are likely to lessen when credit card companies shift to a chip-based or EMV cards, but this will happend in 2017.

She noted hybrid-EMV cards are still be vulnerable to fraud, so the only way to go is purely EMV cards.

"Closely watch which banks and merchants truly walk the talk of valuing their customers. Those are the companies that will put their money where their mouths are and be the first to shift to a purely chip-based card," she said.

source: www.abs-cbnnews.com

How to repair your bad credit record

MANILA, Philippines – A certification of full payment from all creditors is necessary to repair a bad credit record.

Credit Card Association of the Philippines executive director Alex Ilagan said this is the only way to fix your credit record today in the absence of a central credit database.

Ilagan said that because most credit card holders are still careless about due dates and payment history, more education is needed to remind them to take care of credit history and profile because it’s going to affect borrowing plans in the future.

“Most people would really not understand that if they default on something today, that could affect their ability to borrow money in the future, that’s not very clear right now. That’s why there has to be a lot of education that has to be done,” he said on ANC’s “On The Money.”



Financial adviser Salve Duplito, meanwhile, said that because there is no central database to monitor credit, consumers themselves should take the initiative to gather their own records.

“Going back to each company, requesting for certification, calling everyday to follow up is not something that any consumer would jump up to do. But anybody who defaulted in credit payment in the past should have this on his to-do list today,” said Duplito.

She said the absence of a unified database also makes lending very risky and limits the market of lenders.



Ilagan said that once a unified database is set up, it may bring down interest.

“The cost of credit is actually reflective of the amount of risk that banks will have to take on. The risk is there because there is a lot of unknown about the borrower, hopefully that’s what will be eliminated,” he said.

Jaime Garchitorena, president and chief executive of the Credit Information Corporation, said this will also help borrowers looking to tap other banks in ASEAN countries.

He added that a credit database will also be helpful because it can also indicate positive data, which will help improve a borrower’s credit profile.

“In the universe of data, the more data the better, and when we talk about bringing down the cost of borrowing or assessing an individual for risk then that’s where we start bringing in utility payments or any other type of positive and or negative data that may exist out there,” he said.

 source: www.abs-cbnnews.com