Rizal Microbank to open more branches, microbusiness offices this year

July 23, 2013 5:24pm

Rizal Microbank, a subsidiary of Rizal Commercial Banking Corp., will open four more branches and eight microbusiness offices (MBOs) within the year to expand its share of the country’s microfinance market.

This was bared Tuesday by Rizal Microbank president Lourdes Pineda, who said the expansion will be in southern Luzon and Mindanao.

“We are opening four bank branches in Mindanao and eight MBOs, four both for Luzon and Mindanao,” Pineda said at a press briefing.

She added there is a very strong growth potential in Mindanao that is why Rizal Microbank decided to expand in that region. The MBOs in Mindanao will be located in Cagayan de Oro, Butuan, Valencia in Bukidnon and General Santos City.

In the other hand, the MBOs in Luzon will be located in Cabuyao, Sta. Cruz, and San Pablo in Laguna, and Lipa in Batangas.

Pineda said some P4 million has been allotted for the bank expansion per branch and P2 million for each MBO.

Rizal Microbank, which formed through the merger of RCBC’s Makati-based thrift bank Merchant with J.P.Laurel Bank in Batangas in 2011, currently has 14 branches—10 in Luzon and four in Mindanao. The expansion will bring to 26 Rizal Microbank’s total branches in the country.

Deposit portfolio

Pineda said the bank’s deposit portfolio as of June this year stood at P300 million, while total resources hit P900 million. Meanwhile, total loan portfolio hit P100 million, a 79-percent improvement compared to the same period last year.

“Sixty-two percent of our clients are into wholesale and retail business. But one of our requirements is for loan applicants to be operating for at least a year… we don’t want startups,” Pineda said.

Rizal Microbank offers four microfinance products such as microfinance loans, micro deposits, small business loans and micro insurance. It has disbursed over P800 million in microfinance loans since it started its microfinance operation in July 2009. — KBK, GMA News

ADB cites good prospects in Phl microfinance

By Ted P. Torres (The Philippine Star) 

Updated July 12, 2013 - 12:00am

MANILA, Philippines - The Asian Development Bank (ADB) has cited as “highly relevant, highly effective, high efficient, likely sustainable, and significant” its microfinance project in the Philippines which it funded through a $150-million loan.

In a report released yesterday, the multilateral funding institution said it extended a $150-million loan for the country’s Microfinance Development Program in 2005. At the end of the program in 2008, the number of active microfinance clients in the country doubled from 2.4 million in 2006 to 5.5 million. During the same period, about 2.6 million jobs were created.

The ADB said the program took a wider view of microfinance than simply lending.

This included helping to increase the number of microfinance institutions that offered micro-savings and micro-insurance services. There were six mutual benefit associations (MBA) offering microinsurance to 518,307 policyholders.

Data from the Bangko Sentral ng Pilipinas (BSP) indicate that there are four million families responsible for microloans amounting to P41 billion.

“ADB helped the Philippines expand its use of microfinance and learned some valuable lessons along the way,” it said.

Microfinance, or the provision of financial services such as loans to poor families, is recognized as a potent method of directly improving the lives of those most in need. When managed correctly, these small loans can be used to build small businesses and develop other income-generating activities that have a long-lasting impact.

“The program helped make microfinance institutions in the Philippines more sustainable by assisting in the adoption of performance standards by government regulatory agencies and those doing business related to microfinance,” the ADB said.

These standards promoted legal and ethical practices within the microfinance industry, whose clients can be vulnerable to exploitation.

Working in coordination with the Philippine government, the program promoted the use of electronic banking, particularly with mobile phone technology. This lowers costs and saves time for microfinance clients, who often make multiple small loan payments a month. Rather than physically visiting a microfinance office, or relying on a go-between, the client can pay quickly and cheaply using their mobile phone.

It also helped create new legislation, bolster a government regulatory agency and produced a consumer protection guidebook that helped improve the oversight of the industry and while increasing the financial understanding of clients.

There are now 200 banks and another 2,000 microfinance institutions (MFIs) in the Philippines servicing at least seven million microfinance clients.

The ADB said the Philippines is considered one of the countries in Asia with a relatively developed microfinance industry that provides financial services to the low-income sector.

Inclusive growth? Jollibee cites 'chickenjoy' supply chain

Rappler BUSINESS

BY AYA LOWE

POSTED ON 11/26/2012 1:17 PM  | UPDATED 11/26/2012 2:26 PM

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FOOD GIANT. Jollibee is the biggest buyer of chicken in the Philippines. Photo by AFP

MANILA, Philippines – Homegrown food giant Jollibee Foods Corp. is doing its part in addressing poverty in the Philippines through its massive supply chain program, a top official of the company said.

Jollibee chief finance officer Ysmael Baysa highlighted at an Asian Development Bank forum on Monday, November 26, that the food service company's P6 billion annual purchase of chicken from farmers in various parts of the country creates sources of income.

"Our contract [growing program] helps the poultry industry and helps to build livelihood in the area often where the most impoverished sectors in the country are,” Baysa said.

"We make poultry farmers grow chicken for the company. They also dress and cut the chicken for us which increases the value of their corporation," he added.

“We provide them with a sure demand of their produce, access to financing, access to management training. Some have been able to pay off their debts, send their children to college and buy farming equipment," Baysa said.

Under its own "Inclusive Business Program," the country's biggest buyer of chicken deals and buys 80% of chicken supplies directly from local poultry farmers. It is only during the Christmas that Jollibee imports from the US.

This business strategy involves 250 local poultry farms and around 2000 farmers located throughout the country.

Jollibee's "chickenjoy" products are among the food retailer's bestsellers. Chicken accounts for the largest portion of its raw material supplies.

Entrepreneurship program

Jollibee also has a Farmer Entrepreneurship Program for raw materials other than chicken.

"Practically all of our raw materials, outside of packaging materials, are agricultural base," Baysa said. Majority of Jollibee's agricultural needs for its burgers, soup, french fries, and other food offerings are now bought from rural producers.

Since 2005, farmer cooperatives have been supplying Jollibee with green and red bell pepper, lettuce, tomato and potato.

For enterprise training and organizational needs of farmers, the company works with US relief services. To develop financing for famers through a network of micro financing institutions, Jollibee works with state-owned National Livelihood Development Corp.

"We’re also convincing other corporations to buy from our farms. We persist in organizing the farmers and helping them in agro enterprise training to help improve their livelihood and help in our own way the development of agriculture in our country,” the executive shared. .

This year, the entrepreneurship program involved 400 farmers in 13 communities some in central Luzon, central provinces and Mindanao.

P39-worth lunch

Bulk of Jollibee’s consumers are middle class, poor and very poor, he added. "That’s the center gravity of our business. They spend on average P39 on lunch."

The company recently posted a 9-month net earning of P2.47 billion up 20.4% from the same period in 2011. According to Baysa, their sales grew at 30% with a return on equity consistently hovering around 17.5% to 18% year-on-year.

“We serve the poor and make money. So it is possible,” said Baysa.

Every year, the group opens at least 100 retaurants in the Philippines. By working with local suppliers and relying on volume for their profits, the business has maintained a strong year-on-year growth.

Jollibee, the Philippine’s largest food service company, operates the largest food service network in the Philippines. As of September 30, 2012, it was operating a total of 2,040 stores in the Philippines: Jollibee 765, Chowking 383, Greenwich 201, Red Ribbon 209, Mang Inasal 457 and Burger King 25.

In foreign operations, the group had 541 stores: In China, Yonghe King 288, Hong Zhuang Yuan 52, San Pin Wang 39; in the US, Jollibee 27, Red Ribbon 32, Chowking 18, Chow Fun 3; in Southeast Asia and the Middle East, Jollibee 60 and Chowking 22 for a total of 2,581 stores worldwide.

Crop insurance

Baysa said furthering their corporate inclusive business program will need another support leg: crop insurance.

“What kind of incentive would we have on our wish list from the government? Two words; crop insurance."

"The crop insurance in the Philippines is very inhibitive and expensive. It’s a function of the low uptake in the Philippines. We have been trying very hard to insure our farmers against crop failures and have been working already with the largest insurance not just in the Philippines but in the world. It is very tough so we have not solved this problem. Our farmers have told us that if they can get a proper crop insurance they can invest more,” said Baysa.

Jollibee was recently mentioned at the ASEAN Business Awards on November 18 as an ‘outstanding Philippines company’ that has contributed to regional economic growth. At the ceremony held in Phnom Penh, the company said sales growth was broad-based and volume driven resulting from better-value-for-money recognition by consumers on its products and services. – Rappler.com

Philippines: Industry body, govt working on CAT model

Source: eDaily | 03 Jul 2013

The Philippine Insurers & Reinsurers Association is collaborating with three government institutions on disaster research to establish a CAT model for the country.

Mr Emmanuel R Que, Chairman of PIRA, led officials in signing an MoU with the Insurance Commission, University of the Philippines and the Philippine Institute for Volcanology and Seismology to establish a CAT model for the Philippines and a public-private insurance fund for the non-life insurance industry.

Under the MoU, the parties will conduct "research work and parallel studies on earthquake, fire, flood, severe wind and other hazards intended as inputs to the build-up of data for the government’s risk mitigation/assessment and risk reduction management programmes."

The Philippines is one of the most highly prone countries to natural disasters, including typhoons and earthquakes, in the Asia-Pacific. A 2013 World Bank report showed that 74% of the Philippines' population is vulnerable to natural hazards.

The World Bank has engaged the Philippine government in reforming its disaster risk management programs, including the development of a flood management master plan for Metro Manila. The Philippines has already shifted attention from post-disaster response to prevention and mitigation, says the World Bank.