Cardholders beware!

I'M posting this story by Johnson Tan, a De La Salle alumnus and business owner, and friend of media colleague, Mia Gonzalez of the BusinessMirror.

Mia posted this last night on her Facebook page, and I was so appalled how this couple lost their entire savings because someone had apparently been able to get hold of their debit card's PIN. I hope it serves as a warning to us all cardholders that danger lurks wherever and whenever we use our credit cards or debit cards.

What I find most disgusting, is that the bank in question, already has a photo of the thief, and yet it seemingly doesn't want to help the couple catch him or prevent other depositors from being robbed. All it has to do is turn over the thief's photo to the NBI. Tsk, tsk.

Anyway, here's Johnson's story:

How we lost our savings at HSBC via debit card fraud:



Hi all, this is to relate what happened to our HSBC Canada account.
... 


Our purpose is to inform people that your money may not be safe from thieves and to take security of your bank accounts very seriously.
...


We are based in the Philippines but had opened an account with HSBC Canada thru the help of HSBC Philippines specifically HSBC Greenhills.



The account should have been used for my daughter's education and cost of living in Canada.



When my wife went to Vancouver with our daughter for her studies, she had her debit card activated and placed in her own PIN.



When she arrived in the Philippines, we did not check our account balance for 15 days.



When we checked our account, we were horrified to find that our account had zero balance; Thanks to someone withdrawing our funds everyday at HSBC Philippines atm machines and emptying our funds with HSBC Canada.



It is really painful to see years and years of savings disappear: all the times my wife and i saved to ensure a good education for our children.



Be careful with funds that can be withdrawn using atm or debit cards,

check your bank balance everyday:



limit to emergency funds only what can be withdrawn using atm or debit cards,



slash your credit card limits if you don't need it



cancel the cash advance feature if you do not need it.



Cancel your global transfer facility if you do not require it: as this may be hacked and all your funds may just disappear.



We have shots of the thief who stole our funds by using HSBC Philippines atm machine but it is bank policy not to provide me with a copy.... and the NBI must secure some court order before the photos are released. Sometimes I feel that the bank is protecting the thief rather than the depositor who was ripped off.



My family hopes to get the funds back and I have reported the incident to NBI and Banco Sentral. I have also sent many letters to HSBC Philippines and HSBC Canada.



We never lost the debit card and the PIN number was never divulged to anyone.

There is a proliferation of this sort of theft. At the NBI, i was informed that before me, a balikbayan couple (aged) was also complaining and crying that their account had been emptied.



When i went back to the NBI days later to get my case number file to be sent to HSBC Philippines and HSBC Canada, I was informed that after me, another balikbayan couple had also reported that their accounts had also disappeared.



Is it possible that the theft occurred in plane flights from North America to the Philippines? wife rode PAL 107 from Vancouver to Manila by herself and we half suspect that someone in the flight had some electronic gadget and somehow got her card details.



Is it possible that some dishonest merchant had their data compromised when wife used the POS? or maybe there was a skimmer and camera at an ATM in Canada and was compromised? So many possibilities that make our family now so scared to use bank cards for withdrawing funds or even using credit cards.



if you have been victims of the atm/ debit/ credit card scam, please message me so we can also learn from your experience.



Lets work together to help others (and yourself) not get ripped off as well.



Thank you for reading and feel free to message me for more details.

Here are additional details from Nancy, the wife of Johnson, as I and other people commented on Johnson's story:

-In Canada they are obliged to reimburse funds if there is fraud. In the Philippines, we are on our own if robbed so prevention is really required. Please read the fine print in atm and credit conditions... any loss on atm is depositor's loss

-banks are quiet about these incidents but do note that they are now giving more warnings to atm users BUT not telling them that the thieves are getting hi-tech now.

-withdrawals were made using hsbc philippines atm machines in ortigas and valle verde... but we were refused copies of the thief who withdrew the funds because of bank privacy policy...

-actually the debit cards should have a maximum allowable daily limit of 400ca$ and 500ca$ if pos. however, in the Philippines, thieves withdrew 1000 ca$ per day.

-as a depositor who was robbed, how can we prosecute the criminals? bank wants NBI to file a case first... NBI can't file case as suspect is not identified. In the end, the depositor is left with nothing. the bank and thieves have not lost anything. My HSBC greenhills officer actually told us that HSBC Greenhills will not get involved in police matters as the loss is ours... not theirs. Please consider that we are depositors with HSBC Greenhills before this incident even if the account was HSBC Canada. The account was opened with the assistance of HSBC Greenhills, HSBC Philippines. When trouble comes, HSBC Philippines will deny all responsibility even if their machine was used in the withdrawals.

What I find so sickening in this whole affair is the inability of HSBC Philippines to help their customer get through this problem. According to Johnson and his wife Nancy, HSBC Greenhills are claiming "bank privacy". I understand that; but I'd assume this only applies to the protection of bank deposits, not thieves!

Why doesn't HSBC want to cooperate with the NBI in turning over the photo of the alleged thief, since apparently, the bank officers already have it in their possession? So while HSBC executives are sitting on their asses, said thief just goes on and on, victimizing other people of their savings?! Hello!

I've always held HSBC in high regard. (For the sake of disclosure, I am an HSBC cardholder myself.) Johnson says that he chose HSBC in fact because of its excellent reputation worldwide, and he thought his funds would be safe there. But this isn't the first time I've heard of HSBC's deteriorating service. Even some of my own friends and relatives have told me a few horror stories involving this bank. This deterioration has been happening in the last two years, and I'm not sure if it's because there's a change in management or a change in bank policies.

And yet, HSBC isn't the only one. A number of Philippine banks unfortunately, put their needs ahead of their customers, conveniently forgetting that without our hard-earned monies, they won't even be able to generate their profits and pay the handsome incomes of their executives.

It sucks, I know. But there is no way except to be more discerning in choosing our banks. As this case w/ HSBC has proven, even an international bank w/ a wide network all over the world and seemingly superior bank products, can have third-rate customer service. (The tag "world's local bank" I suppose just means, they apply local quality standards to local situations; their depositors don't deserve the world-class standards the bank is known for in other parts of the world.)

I hope the Bangko Sentral ng Pilipinas can help intervene in this matter, or at least direct banks to immediately cooperate with local authorities when investigating cases of fraud. Kawawa ang mga depositors/cardholders!

(*Photos from HSBC and other web sites.)

DOT chief eyed for Monetary Board vacancy

(A day before his resignation, DOT chief Bertie Lim attends the Philippine MICE Conference in Cebu City. Escorting him to the exhibit area is Cebu Gov. Gwen Garcia. Photo from Philippine MICECON FB page)

RESIGNED Tourism Secretary Alberto “Bertie” A. Lim is being eyed to occupy the third remaining vacant slot on the Monetary Board (MB), the policy-making body of the Bangko Sentral ng Pilipinas (BSP).

Several sources on Saturday confirmed that a recommendation to President Aquino was in the works. On Sunday a source in Mr. Aquino’s official family told the BusinessMirror: “I understand that’s what P-Noy has in mind for him,” indicating that the President had already approved the recommendation.

Lim reportedly has the backing of a number of Mr. Aquino’s own people, especially those from the “Balay” faction of Transportation Secretary Manuel A. Roxas II.

Contacted for comment on Saturday morning, Lim declined to say if he had been offered the job. “I believe it is more proper for P-Noy to respond to your query,” he said.

Asked, however, if he would accept the job if offered to him, Lim said: “It is a job that is less stressful and for which I am qualified to work in. So I would be inclined [to accept it] if it is offered.” Lim is an economics graduate of the Ateneo de Manila University.

The appointment to the MB is being played as a “graceful exit” for Lim from the Department of Tourism (DOT) on August 31, and a reward for his fervent dedication to Mr. Aquino whom he campaigned for in 2010. The tourism chief was part of the regular economic briefing group of Mr. Aquino, “working closely” with the latter even at the Times Street residence.

The appointment, however, could ruffle the feathers of some in the so-called Samar group of supporters of Mr. Aquino.

Lim’s rival for the MB post is former BSP Deputy Governor Armando Suratos, who retired from the monetary institution in December 2010. (UPDATE: Mr. Suratos is currently a consultant to the BSP.)

A career central banker and well-respected in his own circles, Suratos is rumored to have the backing of Sen. Ping Lacson, a distant relative; “brods” Executive Secretary Paquito Ochoa and Jesuit lawyer Fr. Joaquin Bernas, BSP sources said.

(The other contender to the BSP Monetary Board post is retired Bangko Sentral Deputy Gov. Andy Suratos. He is currently a consultant to the BSP. Photo from BSP)

Suratos studied law at the Ateneo and is member of the Fraternal Order of Utopia in the College of Law, of which Ochoa and Bernas are also members. Ochoa represents the so-called Samar faction of supporters in the Aquino administration.

But in a text message, Senator Lacson said of Suratos: “The name doesn’t ring a bell, and I have no knowledge whatsoever if, indeed, he is being eyed for the position.”

Understandably, BSP insiders are more welcoming of an ex-colleague on the MB, rather than an outsider like Lim. BSP Governor Amando Tetangco Jr. failed to respond to several text messages seeking his reaction to Lim’s rumored appointment. But one ranking BSP official offered his thoughts: “Lim is a good man. But we are talking of the Monetary Board. More serious and specialized stuff.”

This would be the third government post for Lim. His first government job was as director of the Civil Aeronautics Board under former President Gloria Macapagal-Arroyo. Before his appointment to the DOT, Lim was executive director of the influential Makati Business Club, a keen Mr. Aquino supporter.

Meanwhile, Lim clarified that the President didn’t “ask me to resign.” He had been rumored to be one of three on Mr. Aquino’s list of “headaches,” who only brought him “bad news.”

Retired advertising executive Ramon Jimenez is rumored to be taking over from Lim at the DOT, and was only waiting to be asked by Mr. Aquino, as of Friday afternoon.

‘He was smiling the whole day’
LIM’S resignation, announced on August 12, caught the public—including DOT employees and several tourism stakeholders—by surprise. He said he was doing so for “personal” reasons. “I would like to spend more time with my family. My responsibilities require a great deal of travel and time away from my loved ones,” he said.

A brother of broadcaster Cheche Lazaro, Lim has been married 39 years to the former Carla Campos Abreau. The couple’s children are already in their 20s and 30s, living abroad and pursuing their own careers; one of them is married and now has his own family.

The day before his resignation, Lim was in Cebu opening the MICE Philippines Conference, which was attended by a lot of tourism stakeholders, including a number of DOT officials.

In an interview, a tourism expert who was there said: “[Lim] didn’t look bothered to me. He even posed for pictures with delegates, though I noticed some sadness in his face. But he didn’t act like he was ready to quit.”

A tourism official who requested anonymity, said he and others had no inkling their boss would be resigning the next day. “He was smiling the whole day naman. And was chika-chika to many. He posed for photos until late Thursday night.”

(Participants to the Philippine MICE Conference in Cebu say they didn't notice anything unusual in the behavior of DOT Sec. Bertie Lim, seen smiling in this photo with some delegates from Davao. Only one 'noticed some sadness in his face. But he didn’t act like he was ready to quit.' Photo from Philippine MICECON)

Those who wanted Lim ousted virtually declared him “slow and incompetent” for the job, and had protested his advocacy of an “open skies” policy, later adopted by the President on a provincial “pocket-type scale. “

Also, the tourism chief earlier received flak for having given the go-signal for a failed tourism slogan, “Pilipinas Kay Ganda,” for which Undersecretary Vicente Romano took the fall.

Making enemies
THE Black and White Movement, of which Lim was a member, released a press statement after he announced his resignation, decrying the sinister forces that pushed him to resign.

“In the process of working in the government, Bertie made enemies from powerful vested interests that benefited from a regime of protectionism. And their constant attacks against Bertie made it increasingly more difficult for him to do his job,” it said.

Industry sources said the few vocal protestors claiming to represent the tourism industry had never once owned or worked in a tourism establishment. One who wanted Lim ousted even went to town with the media, but failed to mention that his group lost the bid for the national tourism development plan, the same sources added.

Jose Mari del Rosario, president of Microtel Development Corp., confirmed the staunch anti-open skies lobby to have Lim removed from the DOT. But he said, “that [open skies] policy is starting to benefit the hotel industry, at least in my case.” Del Rosario’s company manages several provincial hotels under the Microtel chain.

He believes Lim to be a “very straightforward and idealistic person. Medyo mahina lang ang personal PR, ‘di politiko like his predecessors”—echoing the assessment of other tourism stakeholders who liked him well enough, but was put off by the tourism chief’s lack of charisma.

“Sometimes he would attend our events,” said a well-known female hotelier, who requested anonymity, “and he would just keep to himself. He doesn’t really mingle with us. Of course, when you’re in tourism you have to be ma-PR!”

Aileen Clemente, president of the Philippine Travel Agencies Association, sees Lim’s resignation as another impediment in the progress of the tourism industry.

“The primary enterprises of the industry put emphasis in having continuity. The average tenure of the past secretaries in the department is two years, which is quite detrimental to the industry. Plans have been made in the past but little of which were geared to have long-term impact. The rest of the public always clamor for good marketing strategies, but to industry stakeholders, this is merely the tail-end of an honest-to-goodness strategic plan that tackles institutional reforms,” she said in a press statement.

“[More] than branding and marketing, there are so many issues that plague the industry. First, there needs to be more effort to remove the downgrading of the [Federal Aviation Authority] and the European ban…. Second, measures must be taken to remove or lessen the numerous hurdles and challenges in the procurement of visas by foreign nationals coming to the Philippines. Third, the government must understand the impact of the double taxation of airlines as well as the charging of the CIQ [Customs, Immigrations and Quarantine]. Fourth, it is essential to plan the various infrastructure that needs to be developed especially in terms of airports, roads, transport systems,” she added.

“Laying the groundwork does not only take time. Being saddled with this responsibility takes patience, organizational skills and leadership to ensure that it creates an effective plan in ensuring the success of tourism in the country. Part of this, Secretary Lim has already done. We just hope that it will be continued by his successor to the post.”

For his part, del Rosario stressed, “People like to put forward their opinions on how the tourism industry should be handled—thinking it’s just slogans or tag lines. But it starts with the proper infrastructure. And that’s what Bertie Lim was doing. Consider his background in running El Nido Resorts as a microcosm of Philippine tourism. It was a ‘can-do’ approach on purely private initiative but to make it work, look at the logistics they had to put in place to make it a success.”

In what now appears to be a flash of prescience, Lim, who was also forced out the Arroyo administration due to his “open skies” stance, told the BusinessMirror in November 2010: “The enemies of reform are still strong. So we expect it to be a continuing struggle.”

(My piece was published on the front page of the BusinessMirror, Aug. 15, 2011.)

(UPDATE): On Aug. 17, in an interview with Karen Davila on ANC's Headstart, Lim said President Aquino delayed taking action against TIEZA chief operating officer Mark Lapid, despite a COA report detailing the latter's alleged fund misuse, due to "bigger political considerations".

The day after, Malacañang denied Lim's statement, saying there was "no selective prosecution of officials".

I dunno if this recent revelation by Lim will affect his chances of being appointed to the Monetary Board. All I know is, the President doesn't take too kindly to criticism.)

More Chaka-han

ITEM 1: Word is this ranking officer of an international airline company is about to be unceremoniously "retired" after being caught in the middle of the airline owner's tiff with his own brother. (The brother recently was just stripped of his position in another firm of the airline owner.)

It seems the airline owner isn't pleased with what turned out to be the ranking officer's bets in the fuel market which has resulted in some losses to the airline. The fuel hedging measures apparently had the imprimatur of the airline owner's brother. The ranking officer's rumored impending departure was already preceded by the "retirement" of the carrier's chief financial officer.

ITEM 2: Who is this Treasurer of a very high-profile international bank in the Philippines who is facing charges of sexual harrassment by a female former bank officer? The banking grapevine has been on fire lately after the female bank officer unceremoniously resigned without warning.

According to those in the know, the issue stemmed from a recent team-building seminar the bank held out of town, but towards the evening, Mr. Treasurer, apparently having had too much to drink, suddenly grabbed the female officer's breasts from behind. The woman, described by her former colleagues as "hot", started screaming and cussing the Treasurer, and only then did the guy let go. Thing is, the female bank officer didn't even bother filing sexual harrassment charges against Mr. Treasurer and settled for just an apology in front of everyone who had witnessed the lascivious acts.

Part 2 of the story is when the female bank officer was requesting the bank's upper management to have her transferred to another department. Unfortunately, they didn't give in to her request. Silly girl, however, overestimated her value to the bank and told her bosses to choose between her and Mr. Treasurer. Well, guess who the bosses chose? Female bank officer resigned and is supposedly now filing belated charges of sexual harrassment against Mr. Treasurer.

Part 3 of the story (whew, ang daming updates kasi) is that since the female bank officer resigned, Mr. Treasurer has been posting photos of her on his Facebook profile, in what looks like lambing poses with him (although within a group). His FB pals think it's his way of proving that the female bank officer also had a thing for him, or had a history with him. Dreamer? Well, Mr. Treasurer isn't called FGLG for nothing.

I personally find it interesting that this international bank has consistently been embroiled in scandalous behavior among its bank officers, be it adulterous affairs, sexual harrassment, or financial mismanagement.

ITEM 3: Officials of the Bangko Sentral ng Pilipinas are intent on pursuing their cases against Celso delos Angeles, discredited owner of the Legacy Group, even if he has been found to be sick with tonsil cancer. One official out of disgust was quoted as saying Delos Angeles should be jailed first even before receiving treatment for cancer. Good for them. The BSP shouldn't show any mercy to criminals who rob even the poor blind.

No stopping Christmas

Something Like Life
Dec. 12, 2008

I finally sat down last Tuesday and started to wrap the gifts I would be giving to close family and friends this Christmas. As many of you probably know, I finished most of my Christmas shopping a long time ago, organized person that I am. But I never really found the initiative to actually wrap them until a couple of days ago. In the past, my gifts would be all wrapped as soon as December 1 kicked in. This year I just didn’t feel as excited as in previous years.

Maybe it’s because of all this talk of the global economic crisis. I can’t help but be fearful of what next year would bring. While the Bangko Sentral and the local banks continue to reassure us of the soundness of the banking system, small savers like me can’t help but still feel a bit unsure.

So I’ve postponed some necessary repair work for the house in favor of waiting it out next year. We just might need the extra cash next year. Being a small country, the Philippines, no matter how fundamentally sound our government economic managers would like us to believe it to be, will be affected by the turmoil in the bigger economies like the United States. If Americans stop buying our goods, a lot of people here may find themselves out of work. (The rest of my column in BusinessMirror. Photo from www.lumesoft.com)

Major hiccup at the stock market

I NEVER thought Ayala Corp. would drop to P200 per share this fast. Parang it was only yesterday that it was selling at P250. But the market crashed today, dropping by 10% which triggered the circuit breakers to halt the trading session. Whew! Then after resuming, the market slipped even further closing at 1,713.83 points. This was the single biggest day drop since July 1987.

Banco de Oro was probably the hardest hit, falling by 23% to P22.75. It had just reported its third-quarter loss because of the covers it allocated to its credit exposure in Lehman Brothers. Belated reaction dontcha think? But actually ever since BDO merged with Equitable, the income of the unibank has been unsteady because of expenses owing to the merger and the expansion of some of its units. So if you think about it, the situation isn't really that bad. The situation was just aggravated by the losses from Lehman's. And tapos na 'yan. The losses are booked. Period.

But the first nine months of the year actually was still profitable for the bank. Check out the press statement here. It was just lower than the same period last year. But Christmas looks promising because I know the BDO consumer lending business has been very strong. Loans were up 35%, deposits too at 32%, and from what I know from my sources, the bank is still in a hiring mode. So in short, there is no reason to worry, especially if you are a BDO depositor. In fact, with the extensive holdings of the Sy family in a diverse array of businesses, we are assured of a steady stream of income from any of the Sy companes. I even once told a friend that the Bangko Sentral can very well fold up, but not BDO. These guys have money. Lots of it.

Okay. Now I'm waiting for Ayala Corp. to fall to P120, then I'm buying. If you've got extra cash kids, check out those stocks. Many of them are already trading at a bargain. I am predicting an upswing after the Nov. 4 elections in the U.S. and Barack Obama is proclaimed the winner. So start looking through the stock market page, but choose wisely.

Stay calm

IN case you guys are still shaking your heads, trying to figure out what all the fuss is about, yes we are now caught up in a global financial flummox because of the interconnectedness of the world today. No doubt, we here in da Pinas will be affected, but we can only cross our fingers that our banks are strong enough to withstand the shocks.

As a depositor, I am staying put. I am keeping my money in our banks and praying that they have not been "irrationally exuberant" in their credit transactions and investments. No sense in withdrawing our monies and stashing 'em in Switzerland (or worse, in your piggy banks at home) because it will just add pressure on the banks, and exacerbate the delicate situation they are in.

I have friends who are already feeling the hit because the value of their investments in mutual funds and UITFs (unit investment trust funds) have dropped dramatically. I have advised them to stay with those funds because right now, all their losses are on paper. Unless they decide to liquidate their investments, of course. Just breathe and hang on to the belief that those investments are gonna stabilize and move up as soon as the financial world settles down. (As I have been saying since last year, stick w/ the safer deposit instruments like time deposits and 5-years tax-free accounts.)

I am pinning my hopes on the pronouncements of Bangko Sentral Gov. Amado Tetangco Jr. that the Philippine financial system is healthy.

And so read on:

Why AIG matters
or why the Fed decided not to let the insurance company fail like Lehman Brothers

WASHINGTON—After World War II, a far-flung insurance company in China run by an American businessman took a risky bet insuring that about 20 boats filled with Americans would make it back to the United States.

From those distant beginnings grew American International Group (AIG), which became one of the biggest insurance companies in the world, under the leadership of Maurice “Hank” Greenberg.

With more than $1 trillion in assets, AIG is bigger than Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers or the former Bear Stearns.

AIG’s subsidiaries sell life, auto, property, workers’ compensation, kidnapping and ransom and many other types of insurance. The company offers retirement plans such as annuities. Its financial markets subsidiary services include investment banks, pension funds, governments and other institutional investors, and AIG manages portfolios of stocks, bonds and real estate. The company is the nation’s largest leaser of aircraft.

Among the activities it ventured into: buying mortgage-related securities and offering other firms an exotic type of insurance to cover losses from investments tied to mortgages.

That proved to be a problem. (Click here for the rest.)

BTW, do you know AIG's corporate slogan? Tic, toc, tic, toc...sirit na? "The strength to be there." (araykow!)
* * * *
Also check out the editorial of BusinessMirror today: (As Michael Douglas' character Gordon Gekko in the 1987 film Wall Street said: "It's all about the bucks, kid. The rest is conversation." Indeed.)

Tale as old as time

BY this time, the breathtakingly simple way—“hubris and greed at work”—by which this week’s disaster on Wall Street has been dismissed is now a tune long worn.

And yet, as simple as it may seem, it forms the thread within each of the key lessons that may be derived, as some form of morbid consolation, from this crisis.

What is one to make of a spectacle where no less than the titans of New York’s financial empire are falling by the wayside, their pedigree notwithstanding: investment bank Lehman Brothers Holdings Inc., Merrill Lynch, and now, the insurance giant AIG or American International Group? The full stories behind their debacles won’t be told yet as details keep unfolding while the markets swoon. But from the broad sketches of what went on, it is clear that the crisis combines the timeless tale of human folly, the failures of regulators and a system that brought so much wealth to millions around the world but is now its own worst enemy. (Click here for the rest.)

And now I leave you with these thoughts from the master of greed himself, Gordon Gekko:



(Note: Photo of AIG building is from the cover of its 2007 annual report available on its web site .)

So prices of goods aren't rising, hmmm?

Inflation hits 12.2 % in July

By Jun Vallecera
Reporter, BusinessMirror
Aug. 6, 2008

PRICES moved at their fastest in 17 years, averaging 12.2 percent in July and boosting the likelihood the Bangko Sentral ng Pilipinas (BSP) will again tighten the monetary screws in response.

Latest data from the National Statistics Office (NSO) show key commodity groups rising with the exception of the fuel, light and water index.

It did not surprise BSP Governor Amando Tetangco Jr., however, who said in a text message: “As expected, inflation in July recorded another increase following the additional shock of Typhoon Frank on food commodities.” (The rest here)

So da hu itong Cabinet official na 'to who keeps insisting that commodity prices are under control? Hindi ba naggo-grocery ang Misis mo ha?!

And betcha by golly waw! I thought there's no rice shortage? So how come the poor are still lining up at the NFA warehouse along Visayas Ave. The queue is soooooo long, it winds into a sidestreet! Josh ko pow! I don't remember lines for food even during the Marcos administration (anyone older guys out there can confirm that these long queues for rice has never happened until this administration? and I'm not talking about Russia ok?)

That bee is gonna sting

Sign of the times: Jollibee hiking
prices on soaring costs

By Dennis Estopace
Reporter, BusinessMirror
May 14, 2008

NOW you know times are really hard. The iconic fast food that offers “distinctly Filipino” spaghetti and fried chicken has been bitten by the inflation bug.

Jollibee Foods Corp., the country’s largest fastfood operator, would be hiking prices “any time soon,” chief executive Tony Tan Caktiong told the BusinessMirror.

However, Tan Caktiong said he doesn’t expect such increase to impact sales. (Read on at Jollibee.)

OH crap, now we're in real trouble! Various economists from different banks are already projecting a 9% inflation rate this year. With this announcement from Jollibee, that makes the inflation projection even more credible. After all, about 50 percent the consumer price index (which is the basis of the inflation rate) is composed of food, beverages and tobacco items.

Jollibee's products have become an index of sorts for the country in terms of food prices. Its burgers, spaghetti, and fries are standard fare especially for the lower middle income market. (I personally like the nacho fries.) These are the clerks, the sales ladies, tellers, patrolling cops, and janitors, etc. who comprise the bulk the of country's working force.

These folks don't even earn enough to pay for all their needs, an uptick in food prices will just burden them further. (What's more, transport groups are agitating for higher fares.) With Jollibee raising its prices, I am pretty sure other food staples like canned sardines and instant noodles will soon follow. It's bad enough we have a rice crisis and surging electric bills.

I can't imagine how we Pinoys can take more of this.

* * * *

ON the other hand, a higher inflation rate spells good news to depositors as this usually means, the Bangko Sentral ng Pilipinas (central bank) will need to increase its overnight rates to sop up the extra liquidity in the market.

This also means the rate on government securities like Treasury Bills and Bonds will go up. Depositors will be sure to check with their banker the latest rates for special deposit accounts and investment instruments.

Already I got a call from my bank which is offering 8.5% interest per annum on its Tier 2 notes. (Earlier this year, the notes were only offered at 7%.) Of course, the catch is, you have to hold on to this basically unsecured debt for 5 years and the interest is paid out every six months. But it's a good deal especially if it's a strong solid bank. Also try to look ask your bank if it offers 5-year tax-free accounts. These special accounts normally accept deposits as low as P50,000. Interest is paid every month but like the Tier 2 notes, you must keep your money in the account for five years.

And btw, just in case you've bought into the whole economic miracle that is RP crap promoted by the presidentita, a high inflation rate is one of the signs the economy is heading for the dumps.