Category: Financial Literacy

Forms of insurance

May apat na forms ang insurance – formal, informal, public at hybrid.

Pooling of risks over a large number of similar units such as households, persons or businesses ang insurance. Inispread ang risk para ang financial loss ay hindi pasan lamang ng iisa kundi ng marami.

Formal insurance

Galing sa corporations and cooperatives ang formal insurance. Formal insurance ang tawag sa kanila dahil sila ay regulated ng Insurance Commission.

A cooperative is owned by members. Ang corporation on the other hand is a capitalist at profit-led. Mayroon ding Mutual Benefit Association (MBA) under formal insurance. Ito ay mga non-profit forms ng insurance companies sa Pilipinas.

Para sa akin, ang gusto ko talaga ay MBA o di kaya’y cooperative kasi hindi profit ang nauuna. Iyong kapakanan ng tao ang nangunguna.

Informal Insurance

“Damayan-based” scheme ang informal insurance. In Ilocano, damayan means “saranay”. Sa mga Bisaya, ito ay “dayong”. Sa mga Muslim brothers and sisters natin, ang tawag dito ay “takaful.”

Mahaba na talaga ang kasaysayan ng insurance dito sa Pilipinas. Dahil ingrained sa ating mga Pilipino ang damayan. Ginulo lang ito nga mga Westerners dahil ang ginawa nila itong for profit na siyang mas namamayagpag ngayon. Sa akin, ang insurance ay hindi dapat for profit.

Public Insurance

Idinagdag ko ito dahil ito ang mga social safety nets o social insurance schemes na ibinibigay ng gobyerno para sa atin. Examples nito ay ang mga insurance benefits – health, sickness, disability, unemployment, death etc. mula sa Pag-IBIG, PhilHealth at SSS.

Hybrid Insurance

Combination of both formal and informal forms ang hybrid insurance. Pinaghalo ang dalawa. May mga programa ding bukod sa formal at informal ay idinadagdag ang public insurance tulad ng Social Welfare Protection Program (SWEPP) ng SEDPI.

Kinds of insurance

Pooling of risks over a large number of similar units such as households, persons or businesses ang insurance. Pinaghahati-hatian ng maraming ang risks – tulad ng kamatayan, pagkakasakit, aksidente, kalamidad – para ang financial loss ay hindi pasan lamang ng iisa kundi ng marami tao.

Term insurance
Upon death of the insured, may benefits paid to beneficiaries ang term insurance. May matatanggap na benefit sa mga beneficiaries kapag namatay ang insured. Ibig sabihin nito, kailangang may mamamatay (yung insured) para may tatanggap nito.  Gusto n’yo ba ang claim na ito?  Siyempre hindi, di ba? Kung sa akin lang, gusto ko buhay ako!  Pero yan ang reyalidad sa buhay na hindi maiwasan. That goes without saying, lahat tayo ay mamamatay. Mangyayari at mangyayari ‘yan, kaya dapat lang na paghandaan.  Sino ba sa atin ang hindi mamamatay?  Kung breadwinner at may mga dependents, dapat kumuha ng term insurance. Pero kung walang dependents, hindi kailangang kumuha ng life insurance.

Disability insurance Benefit paid to beneficiaries upon disability o pagkabaldado ang disability insurance. Ibinabayad sa mga beneficiaries kapag yung insured ay ma-disable. Again, ito ay para sa mga breadwinners at may mga dependents.

Credit Insurance
Kung may utang tapos, kumuha ng credit insurance para kapag namatay ay hindi maipapasa sa estate ang utang. Ang insurance company ang magbabayad ng utang mo, in case na may mangyari sa iyo.  Kaming mga may-ari ng financial institution na nagpapautang sa mga micoenterprises ay ikinukuha naming sila ng credit life insurance. So that in case na may biglang mangyari sa kanila ay hindi na kami tatakbo pa sa mga naiwang kamag-anak na maningil sa utang ng yumao.

Crop Insurance
Protection for poor crop yields and natural disaster recovery ang crop insurance. Ito ay ibinibigay kung mayroong natural calamities o di kaya’y natural disasters na tatama sa mga magsasaka tulad ng bagyo, pagbaha, drought, peste at marami pang iba.

Health Insurance
Medical coverage for illness and injuries ang health insurance. Kapag naospital o di kaya ay inoperahan, ang health insurance ang magkocover ng mga gastos sa hospital.

Property Insurance
Protection para sa damage, destruction and theft of household assets ang property insurance. Kung nagmamay-ari ng sasakyan, bahay, inventory ng business o warehouse, puwede itong iinsure.

Agrarian Reform Beneficiaries in Sultan Kudarat Receive Millions Worth of Agri-Inputs from DAR – IARCDSP

Pandemic or not, farmers in Mindanao tirelessly till the soil. This is why the Department of Agrarian Reform, together with SEDPI, continue to work while majority of the population are on a standstill to bring the most awaited agri-input investments from the DAR – Italian Assistance to ARC Development Support Program (IARCDSP) to our farmers. 

Five (5) Agrarian Reform Beneficiaries and Farmers Organizations in Sultan Kudarat received the first tranche of the promised agricultural inputs that shall kickstart their agricultural businesses supporting farmers in their Agrarian Reform Communities (ARC).

Josephine Balicaw, officer of Marguez United Irrigators Farmers Association (MUIFAI) in Pag-asa ARC, couldn’t help but shed tears when around PhP1.5M sacks worth of inputs were unloaded from a 10-wheeler truck and brought to what was once an empty warehouse. They have been preparing for this through the capacity interventions of SEDPI and now the moment has come for them to put theory into action. 

 

Josephine Balicaw, third from left, together with other officers and members of Marguez United Irrigators Farmers Association in Pag-asa ARC.

In the same way, Noria Gapor, officer of Sigay Ka Tamontaka 4 Association (SKTFA) from Kutawato ARC, was reeling with disbelief when she was told that all the sacks were to be offloaded and not brought elsewhere. “Akala ko ilang sako lang para sa amin. Lahat pala!” (I thought we’re only getting a few sacks of inputs but we’re getting them all!), said Gapor.

It is quite an emotional experience as well for our farmers in Naldan Creek Irrigators Association (NCIA) in Lambayong ARC, Kalayaan Communal Irrigators Association (KCIA) in Lutayan ARC, and Taguisa Agrarian Reform Beneficiary Multi-Purpose Cooperative (TARBMPC) in Lebak ARC. For these ARBOs, now that the inputs are here, they will be able to provide farmer-friendly agri-input financing, farm machineries rental, and hauling services to fellow farmers in their community.

This is one of the foreign- assisted projects being implemented by the Department of Agrarian Reform and funded under the loan agreement executed with the Government of Italy. This project involves not only millions worth of agricultural inputs, farm machineries and equipment, hauling trucks, but also intensive capacity building training on microfinance management tools and monitoring & evaluation systems spearheaded by SEDPI. 

There is a total of 35 Agrarian Reform Beneficiaries/Farmers Organizations involved in the DAR – IARCDSP Project covering Sarangani, Sultan Kudarat, Maguindanao, and Lanao del Sur Provinces. 

 

Challenges of investing in Bitcoin

Bitcoin is a digital currency that uses blockchain technology. It is located in a computer network, meaning it is only accessible through a network such as the Internet.

Bitcoin is unregulated

In the event of a grievance or dispute, there is no institution to turn to as the governing body of all transactions. The lack of centralized regulation means there is no way to verify legality of purchases or trades made online.

In January 2017, Bangko Sentral ng Pilipinas stated in BSP Circular 944 that it does not endorse Bitcoin as a legal tender. However, it provided guidelines for digital currencies. Although it did not outlaw digital currencies, it remained partial to the Philippines Peso.

Digital currencies holds promise in revolutionizing the banking system. However, the system still needs to undergo major changes.

Things to consider before investing in Bitcoin

When deciding whether to invest in Bitcoin, you need to consider the fact that no single institution or individual sets the price of Bitcoin. Traders – buyers and sellers of Bitcoin set the price or value of Bitcoin.

Central banks work to stabilize values because of the pervasive effects of currency changes. Unlike the Philippines Peso, the value of Bitcoin is not prevented from rising in value or dropping in value too quickly. The Bitcoin market sets the price based on trust.

Bitcoin wild swings

In January 2009 when the Bitcoin first came out, its value was virtually nothing. It first registered value a year later at approximately USD0.003.

Bitcoin was trading at USD750 in January 2017 and rose to its historic high of USD19,780 on December 17 in the same year. That’s a wild meteoric rise of 2,537% increase in value.

Bitcoin versus PHP

Currencies, such as Bitcoin and the Philippine peso, should be stable for it to be widely used. These should have the ability to provide confidence that the money they have could purchase a set value of goods and services over long periods of time.

One way to compare stability of a currency is to compare its exchange rate with another currency. The closer the change rate is to zero, means relative stability of the currency. Conversely, the farther the change rate to zero, means more volatility.

Let us compare the exchange rate of the Philippine peso and Bitcoin against the US dollar.

 

December 2015 December 2020
PHP to USD 0.0210 0.0208
BTC to USD 419.0000 19,383.0000

In the past five years, from December 2015 to December 2020, the change in value of the peso against the US dollar is -0.96% of -1%. Bitcoin, in the same period had a change rate of approximately 4,526%!

 

Stability of Bitcoin versus Philippine peso

Let’s dig a little deeper and check the change on annual basis for the same five year period. The table below shows the actual exchange rate of the peso and Bitcoin to the US dollar in the past five years on an annual basis.

 

2015 2016 2017 2018 2019 2020
PHP to USD 0.0210 0.0202 0.0200 0.0189 0.0197 0.0208
BTC to USD 419.0000 973.0000 1,2833.0000 3,729.0000 7,300.0000 19,383.0000

The table below summarizes the change rate of the peso and Bitcoin against the US dollar on an annual basis in the past five years. It clearly shows that the Philippine peso is far less volatile and is a far more stable currency compared to Bitcoin.

 

2016 2017 2018 2019 2020
% PHP to USD -4% -1% -6% 4% 5%
% BTC to USD 132% 1,219% -71% 96% 166%

Taking a look at the annual change rates of the two currencies, it is easy to see the stability of the fiat money compared to Bitcoin. Investors are more certain of the value of the Philippine Peso compared to the value of Bitcoin. Bitcoin is similar to a rollercoaster gone mad in its volatility.

Currencies should be stable

Because Bitcoin is so volatile, it promises high growth but it also poses the danger of slumping to extremely low values. For the typical person on the street, there is a need to be certain that the value of their money is retained throughout the years.

Furthermore, there is no certainty in how much an investor will receive from Bitcoin. Based on past data, an investor trading $1,000 into Philippine Pesos will receive between PhP45,000 and PhP50,000 in the next year. However, Bitcoin has no such certainty. On November 24, 2020, it was valued at PhP924,000. Two days later, it was valued at PhP821,000.

The certainty of fiat money can be projected into years whereas the volatility of digital currency means that days and even weeks can yield wildly different valuations. This makes it difficult to use Bitcoin for business and is part of the reason it has not been adopted into mainstream exchanges. Fiat money is more stable and predictable.

Bitcoin versus PSEI

The Bitcoin market is actually even more volatile than the stock market. Given Sir Vince’s strict guidelines for investing in the stock market, he poses even stricter guidelines for investing in Bitcoin.

The table below shows the volatility of the Philippine Stock Exchange Index (PSEI) with Bitcoin and the Philippine peso.

 

2016 2017 2018 2019 2020
% PHP to USD -4% -1% -6% 4% 5%
% BTC to USD 132% 1,219% -71% 96% 166%
PSEI -2% 25% -12% 3% -8.%

Bitcoin is not an investment

Bitcoin should not be considered an investment. Rather, treat it as a currency or a medium of exchange. If you base your investments on the possibility of large payouts due to extreme volatility, you are engaging in speculation.

Speculation is not a valid investment strategy because it is considered as gambling.

 

Cryptocurrencies: Where does Bitcoin come from?

Should you be investing in Bitcoin? Will it sustain its massive gains? Is it safe to invest in it?

A lot of people have become curious about Bitcoin again since its perceived value is near historic highs the past month.

What is Bitcoin?

Bitcoin is a cryptocurrency. Other popular cryptocurrencies include Bitcoin Cash, Litecoin, Ethereum, Binance Coin, Tron, and many others. They have their own exchange rates and places where they can be traded or purchased.

The controversial cryptocurrency mysteriously came into being as an invention or “gift” from Satoshi Nakamoto, who released white papers detailing the rules of Bitcoin. However, the individual or institution known by that presumed alias has not come forward to claim credit and to this day remains anonymous.

To put the origin of cryptocurrencies into context, the 2008 global financial crisis revealed the ugly truth about our imperfect banking system – oppressive and inaccessible to the poor. Many noted that only the rich benefit from the banking system.

The average person receives cents when they make deposits into the bank, and the only people who have the ability to access those funds are the rich. Traditional banking system is intrinsically capitalistic — favors profit that benefit the top 1% of society.

This gave rise to cryptocurrencies that attempt to challenge the current banking system. They were established to address inequities in favor of a secure, democratic and efficient financial system.

Crypto versus fiat

When we refer to cryptocurrency, this is only one type of money. Currencies like coins and paper money, also called fiat currencies, are printed by the central bank of each country. These central banks create the rules for using their currency.

For the Philippines, the central bank is the Bangko Sentral ng Pilipinas (BSP).  Other countries have their own versions and rules, such as the Federal Reserve in the United States; Reserve Bank of India; and the European Central Bank among others.

How does money gain value?

For example, the PhP100 bill costs about PhP3 to print, so why is it worth PhP100? That value is what we as a society have agreed on and trust to hold its value. We further trust that value because it was issued by the government and serves as its legal tender. It guarantees that the value of bills and coins are its face value rather than the amount spent to print it.

Role of central banks

Central banks determine how much money is in circulation and decides when to print and how many. All global currencies are guaranteed by their government as legal tender.

Because money issued by the government is guaranteed by the government, typically countries with stronger economies have more trusted central banks and have stronger currency value. Countries like Japan, Korea, U.S.A, as well as the United Kingdom, which are more developed, have “hard currencies.” In comparison, the Philippine Peso is not as strong (“soft currency”).

Central banks seek to stabilize the value of their currency. BSP doesn’t want the value of the Philippine Peso to be too volatile in either direction.

During the Asian financial crisis, the value of the peso devalued. The peso lost 45% and was devalued against the US dollar. It fell from PhP24.5 to PhP35.61 in a matter of two months. The worth of the money was essentially halved.

To avoid such volatility, central banks intervene in the market. They buy or sell currency in order to adjust the supply of money, which stabilizes exchange rates.

No central bank regulates Bitcoin

On the other hand, cryptocurrencies are decentralized. There is no governing body that regulates its prices and enforces its rules.

Cryptocurrencies are bought in peer-to-peer networks or exchanged. Theoretically, anybody could establish a digital currency so long as they have a peer-to-peer network. But whether or not the currency is trusted is another issue. The value of cryptocurrencies is agreed upon by those participating in the market.

The peer-to-peer network of cryptocurrencies is very similar to the Philippine Stock Exchange, or the stock market. There is a network specific to facilitating the exchange and purchase of each cryptocurrency.

Need for stability in Bitcoin

Rapid devaluation of currencies are avoided to establish trust and integrity among market players in the economy. Gradual increase and decrease in the value of a currency is preferred over wild swings which is a typical characteristic of cryptocurrencies.

Until Bitcoin reaches the trust level that would make it stable and immune to wild swings, its commercial use will be very limited. This will make it stuck as a speculative asset class that would go against its aim create a secure, democratic and efficient alternative financial system.

 

Blockchains: Where does Bitcoin come from?

If central banks print currencies, where does Bitcoin come from?

Blockchain

Bitcoin enigmatically appeared in the Internet. Satoshi Nakamoto, its unknown originator, used blockchain technology in order to create Bitcoin.

Blockchains are democratized “public” ledgers. Ledgers are the recordkeeping books that accountants and bookkeepers typically use. Thus, blockchains are one method of record-keeping.

Because blockchain is public, everyone can access it. Democratized means there is no single institution that administers the recordkeeping– there are many.

Conventional banking system

If a person in Dubai were to send remittance to the Philippines, their bank would first verify their identity and confirm that they received money to be sent to the Philippines. The bank in Dubai would then contact the Philippine bank to send the value requested.

The Philippine bank undergoes a similar process of verifying that money was received and that the recipient exists and is who they say they are. This process of record-keeping requires people and technology and incurs costs. The remittance sender is typically charged a fee and the remittance receiver often receives less than what was sent to cover these costs.

Banks act as middlemen in financial transactions. With this role, they charge fees which is expensive especially to low income groups, the majority of the population.

In the case of blockchain, there is no need to go through banks. It eliminates these expensive middlemen and allows direct transactions with anyone who have access to the technology.

Recordkeeping

To ensure correct recordkeeping, multiple devices are used in the blockchain around the world in anetwork. They simultaneously record and verify the transaction.

If even a single of these devices in the blockchain were not to match, then the entire transaction would be invalidated because it is no longer consistent is the network. This prevents fraudulent recordkeeping to occur and upholds the integrity and accuracy of the network.

Blockchain is efficient

Using blockchain through the internet, the middleman is eliminated, and transaction fees would be reduced. It would be a cheaper system compared to the current system of incurring bank fees.

Blockchain keeps your privacy

Typically, banks require proof of identification in order to proceed with transactions. This makes transactions traceable in order to prevent money laundering and financing of terrorist activities.

Contrary to conventional banking, blockchain is anonymous. The anonymity of blockchain means that there is no need to furnish proof of identity, as the blockchain goes through its own verification method.

However, scammers and criminals were the first to take advantage of the anonymity of cryptocurrency transactions. This resulted to many cryptocurrencies linked to illicit financial transactions that continues to paint cryptocurrencies in bad light.

Use of blockchain

Cryptocurrency is just one use of blockchain. As a secure, efficient, and tamper-proof method of recordkeeping, blockchain can be used to verify any type of interaction. Its uses could range from government use, insurance, international trade, health care, and real estate, etc.

Admittedly, blockchain is a very powerful technology that could be used for social good. However, when used by the wrong hands, it could also be equally used to the detriment of society.

SEDPI’s Group Yearly Renewable Term Insurance

SEDPI offers Group Renewable Term Insurance (GYRT) in partnership with CLIMBS, a service more catered to common Filipino households.

Term insurance provides protection against emergencies for a specific period of time. As lifetime coverage is not always needed, term insurance provides cheaper premiums with larger benefits. On average, investment-linked insurance schemes charge PhP80,000 in premiums.

For the same PhP1 million coverage, individual term life insurance premiums can be as low as PhP5,500 for ages 21-30 and cap around PhP21,000 for ages 51-60. SEDPI’s Group Yearly Renewable Term has PhP500,000 life benefits and PhP500,000 accident benefits. For ages 18-60, the premium is PhP4,000. This makes it even more affordable compared to individual term insurance policies. Due to its affordability, participation in group insurance is high.

Group insurance means that one contract is issued to cover a group of people. In this case, SEDPI is the policyholder. As a SEDPI member, one is entitled to access this group insurance program, even if they are abroad.

OFWs dealing directly with Philippine-based insurance agents are constrained by a lack of international selling licenses. Since SEDPI is the policyholder an directly deals with CLIMBS, OFWs can participate in the insurance program. Eligibility is determined by membership to SEDPI, and the process does not require rigorous underwriting due to the large number of members.

Yearly Renewable insurance indicates that the insurance protection coverage is active for one year. The annual premium must be paid in order to restart coverage for the following term.

The group’s performance based on mortality rates is evaluated each year. A higher mortality rate may mean a higher adjusted premium the following year, but a lower mortality rate than average can lead to a lower premium for the group.

SEDPI members in Mindanao have exhibited lower mortality rates, and SEDPI is in negotiations with CLIMBS to lower the premium for this group.

Enter keyword GYRT on Vince Rapisura’s Facebook messenger to join.

SEDPI’s Social Welfare Protection Program

SEDPI offers the Social Welfare Protection Program (SWePP), where members can avail microinsurance coverage for their families in the Philippines or themselves. SWePP is a consolidated microinsurance and social safety net program and provides security and protection to low-income SEDPI members.

As a hybrid form of insurance, it adopts formal, informal, and government social insurance programs. It partners with a formal insurance provider, has a damayan portion, and also partners with government agencies – Social Security System (SSS) and Home Development Mutual Fund’s Pag-IBIG or Pag-IBIG.

SEDPI serves to make government services more available to poorer communities. Low income households, which make less that PhP240,000 a year; microenterprises such as farmers and fisherfolks, and OFW family members are recommended to get SWePP.

SWePP provides (1) CLIMBS Life Insurance, (2) access to SSS and Pag-IBIG, and (3) Damayan for fire and calamity assistance. SEDPI is in talks with PhilHealth to include health insurance in the future.

SWePP benefits include up to PhP80,000 life and accident insurance from CLIMBS; and PhP5,000 for fire protection and PhP500 worth of relief goods from the damayan component. These benefits are offered for an annual membership fee of PhP720.

SEDPI is an accredited collection agent of SSS, meaning that payments can be remitted through SEDPI to be paid to the SSS. Becoming a member of the SSS and making one contribution entitles members to a PhP20,000 death benefit. The minimum contribution is PhP360.

For a one time payment or contribution, SSS provides lifetime benefit of funeral protection. With three contributions per year, members are eligible for sickness and maternity benefits.

If a member makes 36 payments before the age of 65, they are given lifetime coverage for disabilities as well as additional death benefits. If a member makes 36 payments, then up to the age of 60, they can also enjoy unemployment benefits.

Making 36 to 119 contributions will gain the benefit of a lump sum pension. Making at least 120 contributions will give the benefit of monthly pensions. Vince Rapisura, SEDPI Group President, recommends that members aim to make approximately 500 contributions to their SSS. More contributions equal higher pensions.

SEDPI’s is also an accredited collection agent of Pag-IBIG. When one becomes a member of Pag-IBIG, one contribution every six months provides a PhP6,000 death benefit.

Pag-IBIG is a complement to retirement funds of Filipinos because of its high dividends. As the national savings program of the government, members are eligible to receive their total accumulated value, which is equivalent to personal contributions, employer contributions, and your dividends. The returns are promising, and they compound.

Pag-IBIG also grants access to socialized housing loans at a 3% per annum interest rate, up to a maximum of PhP580,000. OFWs are charged market rate, but this amount typically hovers around 5% – 7% per annum. Up to PhP6 million can be loaned.

For its microfinance operations in Mindanao, SEDPI is planning socialized housing projects for its members in partnership with Pag-IBIG. It has already acquired 7.1 hectares of land and is in the process of acquiring 4 hectares more in the provinces of Agusan del Sur and Surigao del Sur. Construction and development are planned for 2021.

What qualifies as microinsurance in the Philippines?

Insurance involves pooling risk over a large number of similar units such as households, persons, or businesses. It protects people and businesses against financial loss by spreading their risk among large numbers, and is similar to the concept of “bayanihan.”

Insurance is not an investment. You are not after financial gain. It is for protection against financial losses and involves exchanging the uncertain prospect of large losses for the certainty of small, regular premium products.

Term life is benefits paid to beneficiaries upon death. It is typically recommended for the breadwinners or those with dependents. Disability insurance is benefits paid to beneficiaries upon disability. Credit insurance ensures that loan principal and interest is paid by the insurance company upon death, rather than your estate.

Crop insurance offers protection against poor crop yields as well as recovery benefits from natural disasters. It is mainly utilized by farmers. Health insurance covers medical costs for illnesses and injuries. Property insurance covers damage, destruction, and theft of household assets. Business owners can also insure inventory and equipment at their stores and warehouses.

According to the Republic Act 10607 Amended Insurance Code, microinsurance is defined as meeting the risk protection needs of the poor. The “micro-” places emphasis on the fact that those with smaller incomes are the target policy holders. OFW’s can purchase microinsurance for loved ones back home so that the burden of having to personally absorb risk when loved ones are exposed to risks.

Furthermore, the premiums, fees, and charges of microinsurance do not exceed 7.5% of the policyholders’ current daily minimum wage. This means that for a daily income of PhP 570, the premium will not exceed ~PhP 15,600 for the year. The current benefits will not exceed x1000 the daily minimum wage, equivalent to PhP 570,000 to continue to be called a microinsurance.

Formal insurance is insurance provided by insurance corporations and co-operations and are regulated by the insurance commission. Although both corporation and co-ops are “for profit’ setups, co-ops are owned by the members. Rapisura recommends Mutual Benefit Associations (MBAs) or cooperative insurance, as it prioritizes the welfare of the people over the generation of profits.

Informal insurance refers to collectives such as damayan-based schemes, where insurance is a non-profit community endeavor. Hybrid insurance is a combination of formal and informal insurance. Public insurances are the social safety nets provided by the government such as the Universal Health Care Act and PhilHealth.

Never too small for hope (sari-sari store) – International Day of Rural Women 2020

Ms. Mary Jane Selecia, sari-sari store owner in Manguindanao, Philippines.

Mary Jane Selecia is a mother of five who lives in a rural community in Upi, Maguindanao in the Philippines. She runs a sari-sari store (corner store) in her community. COVID-19 has significantly affected their household and community.

To mitigate the spread of COVID-19, the government imposed community quarantine measures which includes physical distancing, movement restrictions, suspension of classes, and conduct of awareness campaigns on infection, prevention, and control measures (IPC). To cushion the socio-economic impact of the quarantine, subsidies were provided to households to complement their existing resources.

The government subsidy reminds Mary Jane that her household needs to maximize their savings. “My shop is bringing in one-third of the profit. I would earn around P4,000 (US$ 82) and now I am fortunate if I make P1,000 (US$20) a week. We invest P3,000 (US$ 61) a week just to keep the store running,” she said. Their household requirement for a month is estimated at PhP 9,000 (US$ 185) and was previously covered from the sari-sari store’s profits.

Borrowing money is becoming a vicious cycle for Mary Jane, “We have no savings and the income we make for our businesses go towards repaying our loans from relatives and friends. It seems like we are borrowing to pay over and over again,” she said.

Relief information is even more scarce when in the remote mountainous areas like Tinungkaan. The interventions in Mary Jane’s town were constrained to the Department of Social Welfare and Development (DSWD) conducting a survey to determine the poorest population in the village.

Mary Jane’s husband works as a Barangay Secretary and his work became an unexpected lifeline, “We did not need to apply for the Social Amelioration Program (SAP) because of my husband’s job. We are also beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps),” she explained.

The SAP has given qualified families P5,000 to P8,000 per month for two months. “We bought one sack of rice. The remaining money is additional capital for our store,” she said.

Farming has augmented the dwindling income of the household. “Our alternative sources of income are planting vegetables and raising farm animals. The small farm supports us while providing us with food. We are often forced to consume supplies from the sari-sari store,” she explained.

Stock in her store is already limited because of the limited supply in Noro, where she buys her supplies. Transportation cost for each of the trips to Noro is now P100, which is an exacerbated cost during the lockdown.

Everyday expenses have become a challenge for her community. “There is a decline in sales because many of our neighbors and customers do not have work,” she said. As the COVID-19 situation evolves, Mary Jane adapts to provide food on the table for her children and access to basic commodities in her community.

This case study on the plight of microenterprises in the Philippines was selected for the International Day for Rural Women (15 October 2020). It was originally shared across the Asian Disaster Preparedness Center (ADPC) platforms for the International Day for Rural Women

Here are the links:

Cambodia– Website: The Grain of the Matter
Link: Facebook, Twitter

Link: Facebook, Twitter

The Philippines– Website: Never too Small for Hope
Link: Facebook, Twitter