Flc Ksa Jeddah Ppt [Compatibility Mode]

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Flc Ksa Jeddah Ppt [Compatibility Mode]

  1. 1. Financial Literacy Campaign The Philippine Consulate General Jeddah Kingdom of Saudi Arabia 24 April 2009
  2. 2. Invocation
  3. 3. National Anthem
  4. 4. Welcome Remarks Consul General Ezzedin H. Tago Philippine Consulate General Jeddah
  5. 5. Audio Visual Presentation Paghahanda Sa Kinabukasan
  6. 6. The BSP’s Financial Learning Campaign (FLC) DEPUTY GOVERNOR DIWA C. GUINIGUNDO 22-25 April 2009 22- Kingdom of Saudi Arabia
  7. 7. Outline I. Importance of Remittances II. Significance of Financial Planning III. Types of Financial Instruments IV. Source of Financing for Business 8
  8. 8. 1 Importance of Remittances
  9. 9. Benefits of Remittances • Promote economic activity through higher consumption • Generate employment • Increase foreign exchange supply • Contribute to savings • Provide additional funds for the government
  10. 10. Remittances can be harnessed for investments, in the form of: human resource capital investments through education and health care for beneficiaries; physical capital investments through acquisition of real properties, including land purchases and home construction; financial capital investments through savings in bonds and other financial instruments; and investments in business ventures such as in small- and micro- enterprises (SMEs). 11
  11. 11. 2 Significance of Financial Planning
  12. 12. FINANCIAL PLANNING Importance 1. To save for the future 2. To acquire protection against unforeseen untoward events 3. To achieve financial independence 13
  13. 13. Three STEPS to achieving FINANCIAL FREEDOM 3 Invest 2 Save 1 Plan
  14. 14. Setting- Setting-up Family Goals Family goals are usually centered on the following: a. Education b. Housing c. Health d. Retirement e. Protection against unforeseen events
  15. 15. YOUR FINANCIAL PLAN IMMEDIATELY 2 years 10 years 20 years TIMELINE Graduation Fund Funds for Build Dream LIFE GOALS Retirement for Child 1 Business House Fund (P 50K) Undertaking (P 3 Mn.) (P 3 Mn.) Mn.) (P 100K) Create a timeline on when you want it to happen Specify amount needed
  16. 16. Why Families are not able to Save a. Dependency on family member working overseas b. Luxurious lifestyle c. Other family issues that drain resources Early marriage Family break-up Lack of interest in school Personal problems, vices
  17. 17. FINANCIAL PLANNING Income – Expense = Savings Income – Savings = Expense 18
  18. 18. April 2009 Can be used for: Income 1. Tuition fees Target Savings xxx 2. Housing Expenses 3. Investments Food 4. Business venture School Allowance Electricity Water Transportation Clothing Entertainment Others 19
  19. 19. 3 Types of Financial Instruments
  20. 20. PESO REMITTANCE CONSUMPTION SAVINGS SMEs/MICROFINANCE Bank instruments (TD/SD/ Savings in Cooperatives Mutual funds/UITF) TD/SD Agri- Agri-business Treasury instruments T-bills, RTBs, T-notes T- Stock Market Retail business Insurance (life, non-life, non- Education, pension) Real Estate Lending business Others Others 21
  21. 21. LOWER YIELD BUT HIGHER YIELD BUT NO GUARANTEED RETURN GUARANTEED RETURN OF OF PRINCIPAL PRINCIPAL 1. Savings Deposit 1. Mutual Funds 2. Time Deposit 2. Unit Investment Trust 3. Treasury- Treasury-bills Funds (UITFs) 4. Retail treasury bonds (RTBs) 3. Stocks 5. Long- Long-term Negotiable 4. Insurance Certificates of Deposit (LTNCD) 22
  22. 22. INVESTMENT INSTRUMENTS RTBs TBills UITFs Mutual Variable Funds Insurance Who May Buy Individual Institutional Where to GSEDs GSEDs Banks •Brokers Insurance Buy •Banks cos. •Ins. agents Minimum P5,000 P100,000 P10,000 P1,000 --- Investment As of February 6, 2009
  23. 23. INVESTMENT INSTRUMENTS RTBs TBills UITFs Mutual Insurance Funds Yield Fixed- Zero NAVPU NAVPS NAVPU rate coupon coupons Guaranteed Yes Yes No No No Return of Principal Tax Feature 20% 20% 20% --- --- Holding 3 and 5 91-, 82-, 5 to 365 --- --- Period years 364- days days
  24. 24. RETAIL TREASURY BONDS Example: 5-year RTB with 5.875% coupon rate 5- P30,000 x 5.875% x 5 years = P8,812.50 (investment) (coupon rate p.a.) (total income) After- After-tax Income: */ P8,812.50 - P1,762.50 = P7,050.00 (total income) (20% tax) */ Credited quarterly
  25. 25. RETAIL TREASURY BONDS Quarterly Coupon: P7,050.00 ÷ 20 = P352.50/quarter (after- (after-tax income) (# of quarters in 5 years) Return on Investment: = P352.50 (proceeds per quarter) x 100 P30,000 (initial) = 1.18% per quarter for a 5-year RTB, 5- 5.875% coupon rate
  26. 26. TREASURY BILLS Selling Price Formula: SP = PP + [(PP) (i) (h/360)] (i i = (SP – PP) / PP x (360/h) Where, SP: selling price PP: purchase price */ i : yield for holding period h : holding period */ Calculated based on present value formula
  27. 27. TREASURY BILLS Example: 91-day T-bill at 13% yield 91- T- P1,000,000.00 - P981,994.75 = P18,005.25 (investment) (selling price) (discount/interest earned) After-tax Interest Earned: After- P18,005.25 - P3,601.05 = P14,404.20 (discount/interest earned) (20% tax)
  28. 28. TREASURY BILLS Return on Investment: = P1,014,404.20 (proceeds) – P1,000,000 (initial) x 100 P1,000,000 (initial) = 1.44% for a 91-day T-bill, 45-day holding period, 13% yield 91- T- 45-
  29. 29. UNIT INVESTMENT TRUST FUND Example: 30-day UITF 30- P100,000.00 ÷ 1.157867 = 86,365.71 (initial investment on (NAVPU) (units of participation) Feb. 20, 2009) P102,490.19 = 1.1867 x 86,365.71 (proceeds on investment (NAVPU) (units of participation) on March 22, 2009)
  30. 30. UNIT INVESTMENT TRUST FUND Return on Investment: = P102,490.19 (proceeds) – P100,000 (initial) x 100 P100,000 (initial) = 2.49% for a 30-day UITF 30-
  31. 31. MUTUAL FUND Example: 60-day Mutual Fund 60- P100,000.00 ÷ 1.2341 = 81,030.71 (initial investment on (NAVPS) (shares) Feb. 20, 2009) P102,309.37 = 1.2626 x 81,030.71 (proceeds on investment (NAVPS) (shares) on April 21, 2009)
  32. 32. MUTUAL FUND Return on Investment: = P102,309.37 (proceeds) – P100,000 (initial) x 100 P100,000 (initial) = 2.31% for a 60-day MF 60-
  33. 33. MUTUAL FUNDS Medium to Types High Risk Low Risk Bond Funds (Fixed) Money Market Funds Equity (Stock Funds) Balanced Funds
  34. 34. VARIABLE INSURANCE / INVESTMENT LINKED INSURANCE Example: One-year Variable Insurance with a P750,000 face amount One- P23,655.00 ÷ 1.8924 = 12,500 (regular annual premium (NAVPU) (units of participation) payment on Jan. 10, 2009) P24,842.50 = 1.9874 x 12,500 (proceeds on investment (NAVPU) (units of participation) on Jan. 10, 2010)
  35. 35. Return on Investment: = P24,842.50 (proceeds) – P23,655 (initial) x 100 P23,655 (initial) = 5.02% for a one-year Variable Insurance */ one- */ Income could cover for future premiums
  36. 36. 4 Source of Financing for Business
  37. 37. MICROFINANCE 101 Broad range of financial services such as deposits, loans, payment services, money transfers and insurance products offered to the poor and low-income households for their small enterprises. Unique Characteristics: • Open to small savers or micro-borrowers • Approval and disbursement of loans are fast • Individual borrowers can avail of loans • Grant of loans based on the borrowers’ and household’s expected project cash flow • Small loans ranging from as low as P2,000-P5,000 to a maximum of P150,000 (collateral-free) • Unsecured and short-term loans
  38. 38. SNAPSHOT OF MICROFINANCE IN THE BANKING SECTOR (As of 31 December 2008) Micro Loans Portfolio Savings No. of Banks Component Banks Amount No. of (in millions) (in millions) Borrowers Microfinance Oriented Banks Rural Banks 5 724.10 128,494 445.76 Thrift Banks* 4 192.93 57,780 57.95 TOTAL 9 917.02 186,274 503.70 “Regular” Banks with Microfinance Operations Rural Banks 167 4,046.63 580,532 1,073.99 Cooperative Banks 25 913.28 88,198 167.34 Thrift Banks 19 342.53 10,170 4.04 TOTAL 211 5,302.44 678,900 1,245.37 TOTAL 220 6,219.46 865,174 1,749.07
  39. 39. CREDIT SURETY FUND PROGRAM • Allows MSMEs who are members of a cooperative to gain access to credit from banks in the absence of acceptable hard collaterals. • MSMEs defined (under Small and Medium Enterprise Development Council Resolution No. 01 Series of 2003 dated 16 January 2003) By Asset Size: Micro : Up to Php 3,000,000 Small : Php 3,000,001 -- Php 15,000,000 Medium : Php 15,000,001 -- Php 100,000,000 Large : above Php 100,000,000 Based on the number of employees: Micro : 1 -- 9 Employees Small : 10 -- 99 Employees Medium : 100 -- 199 Employees Large : More than 200 Employees 40
  40. 40. CREDIT SURETY FUND PROGRAM • A multi-sectoral program composed of: - Creation of a trust fund that will serve as security for the loans: (1) national government through the Industrial Guaranty and Loan Fund (IGLF) (2) the local government led by the Provincial Governor (3) MSMEs under the cooperatives - Provision of loans: (4) participating banks - Provision of rediscounting for up to 80% for the MSME loans (5) Bangko Sentral ng Pilipinas (BSP) 41
  41. 41. CREDIT SURETY FUND PROGRAM • Granting of Loans: - Managed and administered at the provincial level to be more responsive to the credit needs of the MSMEs in each province. - Loans to be approved by the CSF Oversight Committee - Loanable amount: depends on the evaluated project loan proposal - Interest rate: 8-12% per annum - Additional fee: guarantee fee of 2-5% of the loan - In case of borrower default, CSF will cover the debt while cooperatives will run after their members. - Banks that extend loans secured by the CSF can rediscount up to 80% of such loans with the BSP. 42
  42. 42. CREDIT SURETY FUND PROGRAM • Participating Banks: - Allied Bank - United Coconut Planters Bank - Land Bank of the Philippines - Development Bank of the Philippines - BPI Family Bank - Rural and cooperative banks with rediscounting line with the BSP 43
  43. 43. CREDIT SURETY FUND PROGRAM • Provinces that launched the program: - Cavite - Aurora - Bohol • Provinces to replicate the program: - Davao City - Davao del Sur - Cotabato - Batangas - Bulacan - Laguna - Quezon - Mindoro 44
  44. 44. The Financial Learning Campaign is a flagship program of the BSP to promote Financial Planning, Savings and Investments
  45. 45. PERANG PADALA, BIGYAN NG HALAGA, TIPIRIN, PALAGUIN AT PAGYAMANIN, PARA MAGANDA KINABUKASAN NATIN ! 46
  46. 46. Website: www.bsp.gov.ph E-mail: bspmail@bsp.gov.ph
  47. 47. Audio Visual Presentation Entrepinoy
  48. 48. Remittance & Investment Protection Tips Dottie M. Bernas Bank Officer III Bangko Sentral ng Pilipinas
  49. 49. Open Forum Rosabel B. Guerrero Deputy Director Bangko Sentral ng Pilipinas
  50. 50. Closing Remarks Juanita D. Amatong Monetary Board Member Bangko Sentral ng Pilipinas
  51. 51. Thank You

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