More Filipinos took out insurance policies in 2012—DOF

By Michelle V. Remo
Philippine Daily Inquirer
13 June 2013

MANILA, Philippines—Insurance products have started to become popular among the people in the 
country, with about 13 million Filipinos now owning micro-insurance policies.  

As of the end of 2012, there were 12.9 million Filipinos who own micro-life and non-life insurance policies, the Department of Finance reported.

The figure was a stark improvement from the 6 million policyholders reported by the end of 2010, the year when micro-insurance products were first promoted by the government.

The finance department said that the number of Filipinos owning micro-insurance is expected to rise further this year.

“There has been a sharp rise in the penetration rate of micro-insurance. More and more Filipinos are now availing themselves of life and non-life protection,” said Gil Beltran, Finance Undersecretary who takes charge of the National Credit Council (NCC).

Micro-insurance products are designed for low-income earners. A micro-insurance policy normally costs P100 or less. The benefit for the policyholder usually hovers around P5,000.

Beltran said the significant increase in the penetration of micro-insurance products was due to several factors, including awareness programs conducted by the NCC and the Insurance Commission all over the country.

The targets of these awareness programs are rural areas and other low-income communities.

“The micro-insurance policies that people get range from life to non-life,” Beltran said.

The non-life products taken out are those that are meant to protect micro-businesses against damage, he added.

The rise in the number of Filipinos owning micro-insurance is also credited to the government’s push for financial entities to offer products that cater to the insurance needs of low-income individuals, Beltran said.

A few large insurance companies now offer micro-insurance.

Also, there has been an increasing number of mutual benefit associations that offer insurance and other financial services to low-income earners, he explained.

The finance department and other concerned government agencies will continue to implement programs that will boost the penetration rate of insurance products throughout the country, Beltran said.

He said that by making Filipinos financially savvy, the government will be a step closer in reducing poverty in the Philippines.

Philippines: Number of micro policyholders more than doubles since 2010.

Source: eDaily | 14 Jun 2013

About 13 million Filipinos now own microinsurance policies, more than double the six million policyholders reported at the end of 2010, the year when microinsurance products were first promoted by the government.

As at the end of 2012, there were 12.9 million Filipinos who own micro life and non-life insurance policies, the Department of Finance says.

The number of Filipinos owning microinsurance is expected to rise further this year. “There has been a sharp rise in the penetration rate of microinsurance. More and more Filipinos are now availing themselves of life and non-life protection,” the Philippine Inquirer quotes Mr Gil Beltran, Finance Undersecretary, is in charge of the National Credit Council (NCC), as having said.  The NCC is the government’s microfinance policymaking body.

Mr Beltran says that the significant increase in the penetration of microinsurance products was due to several factors, including awareness programmes conducted by the NCC and the Insurance Commission throughout the country. The targets of these awareness programs are rural areas and other low-income communities.

A microinsurance policy normally costs PHP100 (US$2.33) or less. The cover for the policyholder usually amounts to around PHP5,000.

Also, there has been an increasing number of mutual benefit associations that offer insurance and other financial services to low-income earners, he explains.

The Finance Department and other concerned government agencies will continue to implement programmes that will boost the penetration rate of insurance products throughout the country, Mr Beltran says.

Small businesses gain access to financing businesses

By Prinz Magtulis (The Philippine Star) | Updated June 9, 2013 - 12:00am

MANILA, Philippines - An agreement to allow small businesses to secure financing using movable collaterals was signed last Friday by the public and private sectors.

The document will oversee the establishment of a movable collateral registry by 2015 to “enhance transparency and accessibility” on collaterals such as vehicles and consumer goods and inventories.

For the public sector, the agreement was signed by the Department of Finance (DOF), Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Land Bank of the Philippines, Cooperative Development Authority, Credit Information Corp. and Development Bank of the Philippines.

For the private sector, signatories include the umbrella bank groups, the Philippine Center for Entrepreneurship, PinoyME Foundation, Microfinance Council of the Philippines and the Philippine Finance Association.

The International Finance Corp., the private sector arm of the World Bank, was also a signatory to the document.

“The reluctance of banks to accept movable assets as collateral for loans is one of the main barriers to inclusive economic growth,” Finance Undersecretary Gil Beltran said in a statement.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Joselito Almario, a DOF director, said only a third of micro, small and medium enterprises (MSMEs) have access to bank credit. This is because banks usually require real estate as collateral for loans.

According to DOF data, 73 percent of loans are financed with property collaterals.

In contrast, 78 percent of MSME assets are movable objects that do not match bank requirements.

A total of 96 percent of local firms are MSMEs, based on DOF estimates. 

“But it is not the fault of the banks why they do not want to lend precisely because we do not have that environment that will allow them to feel secure when they lend,” Almario explained during the signing ceremony.

Beltran, for his part, said credit is necessary to allow MSMEs “to grow.”

“The opportunity for future growth is when you give (MSMEs) the opportunity to grow by giving them credit,” he explained.

With MSMEs’ expansion, Beltran said, more jobs will be created which shall help in making growth more inclusive and sustainable.

Funding for the registry was not revealed, though Almario said the government would look at “existing” systems to set up the necessary infrastructure at less cost. The target is to set this up “by 2015”.

The establishment of a movable collateral registry is part of the Aquino administration’s Medium Term Development Plan.

Registry scheme seen to ease credit access

BusinessWorld

Finance

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Posted on June 07, 2013 06:33:16 PM

THE GOVERNMENT will soon establish a registry system for non-real property assets in a bid to encourage financial institutions to accept such items as collateral and ease small business access to credit.

In a statement, the Finance department said government and private sector representatives inked Friday a framework for the setup of a centralized movable collateral registry system.

The scheme is part of the department’s memorandum of understanding with the World Bank Group’s International Finance Corp. (IFC) to jointly develop better regulations on movable assets taken as collateral, and establish a centralized electronic notice registry to publicize lender security interests on movable assets.

The initiative is supported by the IFC’s financial infrastructure program for East Asia and the Pacific, which is funded by the Swiss State Secretariat for Economic Affairs.

“It will enhance and simplify the processes on taking movable assets, such as inventory, equipment, sales contracts, quedan and other intangible assets, as collateral,” the Finance department said in the statement.

“With the movable collateral registry in place, banks and other financial institutions will no longer rely heavily on real estate as collateral since the system will enhance transparency and accessibility to information on the other assets provided as collateral,” it explained.

Finance Undersecretary Gil S. Beltran, who is concurrent National Credit Council executive director, said financial institutions are not keen on accepting assets other than lands mainly because of the absence of such a registry system for non-real property assets.

“The reluctance of banks to accept movable assets as collateral for loans is one of the main barriers to inclusive economic growth,” said Mr. Beltran in the statement.

“An improved registry and other regulatory reforms involving the use of movable assets as collateral will help banks mitigate the risks and enable them to lend more to small businesses for their additional capital requirements and expansion plans,” he said.

Jesse O. Ang, IFC resident representative to the Philippines, noted that the system will help micro, small, and medium enterprises (MSMEs) -- which usually have only movable assets to offer as collateral for loans-get easier access to credit.

“The reforms will help reduce the cost of credit and increase credit availability,” Mr. Ang was also quoted as saying in the statement.

“Small and medium enterprises will then be able to leverage their movable assets and obtain capital to further invest in their businesses,” he said.

Mr. Ang added that the reforms can help promote credit diversification, and thus create a more robust financial system.

The Finance department also noted that increased lending to MSMEs is seen to further boost economic development and job generation.

Among the signatories to the framework were the Finance department, IFC, the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, Credit Information Corp., the Small and Medium Enterprise Development Council, and the Cooperative Development Authority, as well as government financial institutions like the Development Bank of the Philippines and the Land Bank of the Philippines.

Private sector groups such as the Bankers’ Association of the Philippines, the Chamber of Thrift Banks, the Rural Bankers’ Association of the Philippines, the Philippine Finance Association, and the Microfinance Council of the Philippines, Inc. also signed to signify their support for the initiative. -- Bettina Faye V. Ro

DOF framework to boost MSME sector

DOF framework to boost MSME sector

June 7, 2013 8:04 pm

by Mayvelin U. Caraballo Reporter

Manila Times

A framework document involving the setting up of a movable collateral registry system that aims to further encourage micro, small and medium enterprises (MSMEs) to participate in the country’s economic activity and contribute to job creation was signed  on Friday at the Department of Finance (DOF).

The finance department said that MSMEs provide one of every three jobs in the Philippines and contribute nearly 30 percent to the gross domestic product. However, these enterprises usually have only movable assets to offer as collateral.

Signed by private and government sector representatives, a movable collateral registry system will be set up to provide small businesses greater access to credit at lower costs.

With the establishment of the movable collateral registry system, financial institutions will be encouraged to accept nonreal property assets as security for lending to MSMEs.

The DOF said that the system will also enhance and simplify the processes on taking movable assets, such as inventory, equipment, sales contracts, quedan and other intangible assets, as collateral.

With the movable collateral registry in place, banks and other financial institutions will no longer rely heavily on real estate as collateral, since the system will enhance transparency and accessibility to information on the other assets provided as collateral, it added.

The agency also said that the absence of a centralized registry for movable collaterals has been cited as a major reason why majority of the financial institutions are not keen into accepting assets other than land as collateral for loans.

The framework is an offshoot of a memorandum of understanding between the DOF and the International Finance Corp. (IFC) to jointly develop better regulations governing movable assets taken as collateral, and establish a centralized electronic notice registry to publicize lenders’ security interests on movable assets.
“The reluctance of banks to accept movable assets as collateral for loans is one of the main barriers to inclusive economic growth,” said Department of Finance Undersecretary Gil Beltran who is also concurrently the executive director of the National Credit Council.

Beltran added that an improved registry and other regulatory reforms involving the use of movable assets as collateral will help banks mitigate the risks, and enable them to lend more to small businesses for their additional capital requirements and expansion plans.

“We need to use our [government’s] excess savings. Give MSMEs the opportunity to use the money, so that they can grow faster and create employment,” the undersecretary also said.

Better financial system

For his part, IFC resident representative Jesse Ang said that the comprehensive reforms complementing the movable collateral registry can help promote credit diversification and thus create a more robust financial system.

“The reforms will help reduce the cost of credit and increase credit availability,” Ang said, adding that small and medium enterprises will then be able to leverage their movable assets and obtain capital to further invest in their businesses and contribute to inclusive economic growth.

The DOF said that the establishment of a Centralized Movable Collateral Registry is a major financial infrastructure commitment of the Aquino administration under the 2011-2016 Philippine Medium-Term Development Plan.