never too small for hope Archives - Social Enterprise Development Partnerships, Inc.

Microinsurance: Abot-kayang klase ng insurance

Pinaka-essence ng insurance ang pooling of risks over a large number of similar units such as households, persons or businesses. Inispread natin ang risk para yung financial loss ay hindi lang sa atin tatama.

Insurance should not be treated as an investment

Hindi dapat pinagkakakitaan ang insurance dahil hindi ito investment. Para itong bayanihan, you are protecting against financial loss. Hindi financial gain ang habol dito kundi protection from financial losses. Nagbibigay ng proteksyon ang insurance ng katumbas na halaga sakaling mawala ang isang bagay.

Ang insurance ay involved with exchanging the uncertain prospect of large losses for the certainty of small, regular premium payments. Nagbabayad ang maraming tao at pino-pool natin. Ibig sabihin, nagbabayad tayo ng malilit para kapag may tinamaang isa sa pool na ‘yon ay may matatanggap to compensate for the loss.

Sa mga pagkakataong may biglang mangyari sa‘yo na hindi maiiwasan, kahit paano ay makakatulong sa mga mahal mo na may pagkuhanan sila sa ganyang pagkakataon. Yan ang insurance. Sana malinaw na malinaw yan.

Microinsurance defined

Ang microinsurance ay nakapaloob sa batas natin under RA 10607, otherwise known as the Amended Insurance Code. Ito ang definition na nakapaloob sa ating batas. It meets the risk protection needs of the poor. Ang target nito ay iyong mga nasa laylayan, mga low-income households kaya micro ang tinatawag diyan.

Ayon sa batas, ang premiums, fees and charges ng microinsurance does not exceed 7.5% of the current daily minimum wage. Sa PhP570 na daily minimum wage dito sa NCR, PhP42.75 ang katumbas nito. Kung gagamitin ang 260 days na average number of annual working days, hindi dapat lalagpas sa PhP11,115 kada taon.

Ito ang sinasabi sa ating batas na mga benefits na makukuha sa microinsurance: ang guaranteed benefits should not exceed 1,000 times of the current daily minimum wage. Katumbas ito ng PhP570,000 kung gagamitin ang parehong rate sa itaas.

Microinsurance for OFW family members

Very relevant ang microinsurance sa mga OFWs, dahil ginagawa silang “insurance” ng mga kamag-anak dito sa Pilipinas. Puwedeng ikuha sila ng microinsurance para hindi mga OFWs ang gagawing insurance policy.

Mas mura kasi ito. Magbabayad ng maliit na premium ang OFW para icover ang kanilang family members. Kapag may nangyari sa kanila, yung insured amount ay makukuha ng mga beneficiaries mula sa insurance company. Mapuputol ang dependency of family members sa OFWs.

Microinsurance for protection

So, there mga besties, ito ang detalyadong discussion ng microinsurance. Laging tandaan na nag pagpaplano ng maaga ay isa sa pinakamagandang decision para kinabukasan mo at ng iyong mga mahal sa buhay.

Never Too Small for Hope- Part III (Service Economy)

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Federic Caneta / Resident of Cebu City – Furniture Maker

The miter saw is silent in Federic Caneta’s workshop. The carpenter has a cabinet and a couple of shelves from commissions that were canceled because of the lockdown. His monthly projects vary with demand, “I make furniture on a custom-made or pre-order basis. Orders would range from P8,000 to P15,000 a month. There has been no demand since the enhanced community quarantine.” Never Too Small for Hope His daughter, Rica Caneta, is a private school teacher. She has been helping him sell some of his works, “I made a hanging cabinet and a storage cabinet with the extra wood from the previously commissioned projects. I sold them for P2,500 and P3,000 respectively. Rica is working from home so she takes some time to promote my pieces through social media.” The average monthly salary for a carpenter is P16,800. Profits come from down-payments upon the order or balance payments upon delivery. Federic is concerned that he might not have supplies to continue the few online sales, “I had one piece that I was not able to complete. I was unable to obtain the needed materials due to travel restrictions. Some customers have also canceled their orders.” Never Too Small for Hope Federic’s son, Drake, is an animal handler and is supporting the family through these times, “My children are providing financial support we need. Our monthly expenses are usually P10,000 which was primarily covered through my business.” He has discovered the potential of taking his business online to help it grow, “I would need around P10,000 to buy materials for future orders. Online sales have made me realize that professional guidance in promoting our business would really help it expand.”

Chierrie Villarosa Marces / 29 years old / Resident of General Santos City- Pisonet

When life gives you the Internet, make digital solutions for your business. Chierrie Villarosa Marces owns a small Pisonet (pay-by-the-minute computer and Internet shop). The lockdown has forced her to close her shop so she is selling goods through digital networks, “I have closed the pisonet since mid-March. I am focusing on online trading which includes buying and selling dry goods, food items, and other basic commodities.”

Online sales are the only means of income for Chierrie, “I make around P200 for every P1,000 I invest in online selling. I have been doing it for some time but even that has experienced a decline.” Her customers have stopped ordering dried foods, “Basic goods and essential commodities such as fruits and cooking ingredients are the priority now. We own a tricycle that we use to transport orders. Travel restrictions have made getting the goods from my supplier difficult.” Never However, these sales do not provide stability for the pisonet. Filipinos spend the most time on the Internet around the world, averaging in at 10 hours per day. Her Internet business had expanded to printing, scanning, and photocopying services, “I would make around P25,000 every month from the pisonet. The expenses would be around P8,000 for the Internet and electricity bills. My direct suppliers have been generous enough to offer freebies on their services for now.”

Chierrie is struggling to make ends meet, “Our household expenses are about P10,000 every month. I am grateful to the government for providing us with rice, meat, canned goods, and other staples.” She is worried about restarting the business once the community quarantine is lifted, “I estimate that we will need at least P5,000 to restart the pisonet. It would cover two months of our Internet bill. We can manage the cost of computer maintenance and business equipment.”

John Cuvin / Resident of Naga City – Laundry Shop

John Cuvin, his wife, and his mother are bonded in their dream to be business owners, “My wife owns a beauty salon and my mother has also had a number of businesses.” He established a laundry shop, JJS Suds Laundry Service as a lucrative business opportunity. Dry cleaning and laundry services ranked second in the service industry, providing business opportunities for 18% of entrepreneurs. John’s monthly expenses amount to P25,000 as he provides support for his family, “My wife and mother live in different provinces and I would pay for their utilities and my mother’s caretaker. I want to provide them with financial support.”

Never Too Small for Hope JJS Suds is a connection to the local community, “We would normally have 30 to 50 customers a day before the lockdown. We are lucky if there are five customers these days. Our daily revenue would reach up to P15,000 per day and that target is now P5,000.” John has had to cut corners to adapt to the new normal, “We had seven workers on a daily basis and now there are only two at any given time. The store is only open for limited hours because customers no longer come in late at night. It has led to slower service delivery. We have also started using electric fans.”

Basic supplies have become much harder to procure. His team promotes the use of dryer sheets when the fabric conditioner is short on supply- “Wholesalers have increased the price of fabric conditioner and liquid detergent from P10 to P11 per sachet. Sometimes we have to buy them from the local retailers for P17. The dryer sheets would be available for P500 per box but they are not locally available. We sell each sheet for P10.” Never Too Small for Hope Communication is a constant with John’s regular clientele. The staff coordinate with customers on Facebook. John has also decided to bring the business to his regulars, “We also support our personnel needs by helping with the laundry and delivery. The shop currently relies on delivery modality to remain operational. Finding alternative solutions is necessary to keep the business running.”

Although business expenses were high, John would earn between P30,000 to P50,000 a month, “I spent around P120,000 which included the P50,000 for my staff’s salary on a monthly basis.” He anticipates support or policies in order to relieve the challenges they are facing, “It would be really helpful if the government could provide financial support to cover the salaries of our staff, and postpone rent collection or allow us to pay it in installments.”

Pureza Elopre Granario / Resident Naga City – Sari-sari store

Opening Pureza’s shop is necessary for survival but also puts her family at great risk, “My husband and mother-in-law are both over 50. I worry that I might bring the virus home.” Work is scarce for her husband who is a plumber. “We are fortunate that profits from the store are still P800 to P1,000 per day.”

The green and white awning in her shop have been a part of her neighborhood’s fabric for years, “My supplies get sold easily. Before the quarantine, sales were mostly liquor and sodas. Customers now want canned goods and frozen foods which ensure that they can stay at home. Sales of phone credit are always in-demand and have gone up by 20%.” Pureza maintains is systematic when it comes to buying stock for her shop, “We have to go at a specific time and day so that we can avoid the long lines. There is still a queue but any steps we can take to be cautious are necessary.”

A savings and investment scheme supports small businesses from any shock in income flow. Pureza is fortunate to have enough to restart her business. She estimated that P10,000 was enough to restock her full inventory, “I was a part of the Social Amelioration Program (SAP) through which I received P5,000. We used the money to purchase additional inventory for the store.” Her mother-in-law has also contributed to the shop. “She gave me a P2,000 loan which I used to buy coffee, sugar, and soap.” Never Too Small for Hope Pureza’s shop is her saving grace during the uncertainty, “We need P9,000 for our household expenses and about P7,000 for the store.” The store is a constant for her. Its history in the community mirrors Pureza’s presence and determination, “We reinvest all of our profits into the shop. I’m obtaining inventory through other channels because I want to see my store grow despite the circumstances.”

At APP, we focus on the vulnerable sectors of our society in our development initiatives. MSMEs are among the priority sectors of our national chapter, Philippine Preparedness Partnership’s (PHILPREP) and its targets in local program activities. PHILPREP has developed these case stories to amplify the voices on the ground, especially during the COVID-19 pandemic. It seeks to amplify human stories to raise awareness on how disasters affect the most vulnerable communities.

This article was developed in partnership with the Asian Preparedness Partnership (APP). More information about APP may be found using this link: Asia Preparedness Partnership (APP).

Click the links for Part I and Part II of this series.

Never too Small for Hope – Part II (Transport and Logistics)

Image Credit: FreePik

Respondent: Jhun Rodriguez / Resident of Quezon City- Tricycle Driver

Jhun Rodriquez’s day would start with morning commuters in Quezon City. He is one of 4.5 million drivers across the country who have left their vehicles in garages until quarantine conditions are lifted. Jhun has put a ‘Family Use – Private’ sign on his tricycle, “We are only allowed to use it for business purposes and personal family needs.” The lockdown has banned tricycle drivers from passenger transport since March 15, 2020. “I attempted to take my tricycle the day after the lockdown. The authorities had warned me that it would be impounded. My tricycle is leased so I did not want to take the risk.”

The rent for the tricycle is P200 per day. Jhun had previously earned enough to support the family of 11, “I would usually earn up to P24,000 a month.” Support comes from the family during the worst disasters. Jhun was able to rely on his brother when tropical storm Ondoy ravaged the city in 2009, “My brother is too old to work now so it is my turn to ensure his well-being. I do not have enough money to start a business and our savings have gone towards food and medicine.” Jhun and his brother’s family only eat lugaw, a rice porridge, most of the time. “Eating the same meal every day becomes really difficult for the children. I assure them that when I am able to resume working, we will eat like we used to again.”

The city was distributing P2,000 for tricycle drivers which Jhun was unable to collect, “I believe it is because my house is far from the collection point. The local government did provide us with rice and sardines on two occasions. We have also received grocery items from Gawad Kalinga.” Local organizations have become the most dynamic advocates during the pandemic.

Jhun’s tricycle has become an unexpected business tool: “I was able to borrow P5,000 from my friend and I used the money to buy and sell fish.” He uses the tricycle to take his supply to the local market. “Everyday kindness keeps me optimistic. My customers don’t haggle for lower prices and some do not even ask for their change. It has allowed me to pay back the loan within a week.” Jhun usually buys 20 kilograms of fish and was able to make a profit of P600 per day. Matters have gotten worse since the total lockdown has restricted him from selling at the marketplace.

Respondent: Edwin Cawit / Resident of Lagao, General Santos City – Food delivery service

The onset of social distancing and isolation steadily witnessed a decline in Edwin Cawit’s food delivery service, “We started to feel the effects of COVID-19 in the second week of March when many of our clients canceled their previous orders. Our services came to an immediate halt as of March 18. I understand that safety measures are necessary but the indefinite timelines put us in a dilemma.” His business was growing with profits of P60,000 to P80,000 a month. Although food delivery services make up a small portion of the industry, it has witnessed a steady increase with an expansion of 7.3% between 2016-2017.

Edwin’s passion project has always been on the plates, “I started the business after years of savings because I wanted to be my own manager and operator. Cooking meals was always a family affair so it was a natural career move. I am able to cope because I do not have to compensate for any employee’s salaries.” Edwin has savings to sustain his family but the uncertainty remains a concern. “The only way to prevent fines or penalties was the ‘wait-and-see’ option at the beginning of the lockdown. We listen to and follow updates from our local news outlets and social media pages. We are very careful because our services involve people’s consumption.”Inflation of necessary supplies during a disaster event makes business continuity an even greater challenge. Edwin’s main concern is procuring inventory, “We pick up essential ingredients from outside the local area because of lack of availability. The city’s clustering policy during the lockdown prevents vendors from sourcing some of the vegetables we need from Bukidnon.” The scarcity in supply and increase in price has forced Edwin to shut down despite being able to operate under COVID-19 safety guidelines. “The price of vegetables has inflated by 20 to 30%. Rice and grains have only gone up 10%. However, these cumulative prices make it impractical to continue operations.” The emerging caterer hopes that small businesses will receive the aid they need to carry on after the restriction, “We would appreciate logistical support, availability of supplies from the National Capital Region and other key cities, tax relief, and easing of local cluster market restrictions.”

Respondent: Shirly Erum / Lagao, General Santos City – Driving Instructor

Shirly Erum’s classroom is the road of General Santos City- “I believe that driving is in our blood. Five out of our nine family members are driving instructors.” The school of driving can be a promising career as instructors make an average of P235,451 annually. The number of students started to slow down in March. “We no longer have enrollees because of the transportation restrictions. Physical distancing also makes it impossible to hold practical sessions.” They would offer three package deals – a five day tutorial for P2,800, seven days for P3,800, or a monthly package between P10,000 to P20,000. Keeping their office is the biggest challenge, “Our maintenance cost fluctuates between P5,000 to P10,000 and the rental fee for the office is P7,000. We have used our savings to continue paying the rent and any vehicle maintenance that was necessary.” Shirly also has to consider the family expenses, “My sister works in Hong Kong and has sent us remittance of P20,000 during the lockdown. We were able to use the money for four months of household expenses. If we can resume operations soon, we would only need P5,000 to start functioning again.”

Respondent: Giselle Pastrano / Resident of Cebu City – Self-service Car Wash Business

The Pastranos anticipated that 2020 would be a year of new beginnings and opportunities. Giselle and Arnold welcomed a new baby, Arnold, in April. They had also opened a new business to provide for their growing family. Transforming their garage in front of their home as optimal for starting their venture. Giselle would be able to take care of her family and work, “Our space was large enough to situate a self-service car wash and food stall. We would earn around P9,000 to P12,000 from the car wash and P16,000 to P18,000 from the food stall.” Both businesses had minimal expenses because they were run by Giselle and Arnold, “We would spend P1,000 to P1,500 that was mostly for the water bill. The expenses for the food stall were P9,000 a month. The profits were more than enough to cover the P7,000 we would need for the household.”

They had only been operating for a month when they decided to shut down. Giselle’s immediate concern was her family’s safety, “Our business is in front of the house. Customers coming in and out expose my family. Compromising their health is never an option.” She also has a seven-year older son, Travis, who is currently unable to attend school. The food & beverage industry is expected to reach $415 million by 2024. Food stalls are becoming more popular as the younger generations opt to eat out. “Many of our ingredients have gone up by 40% to 50%. Our regular customers shared the same concerns and we started seeing a decline in customers when the lockdown started.” Commuter restrictions eventually led them to cease operations of the car wash. Multiple income-generating opportunities are a proven solution for many small businesses to sustain their needs. The COVID-19 restrictions have limited these prospects to entrepreneurs. Giselle currently works as a cashier for a university. It is the only stable income for the household. The lack of earnings has forced her to take loans, “My husband has a van that he would use for delivery operations. He would regularly work for Lazada but that has also stopped since March.” Loss of revenue sources has multifold consequences for microentrepreneurs. “We have lost around P19,000 a month since the lockdown. We also had an SUV that we would rent out through the Grab app. Unfortunately, we had to give it back to the dealership because we were unable to cover the monthly payment or the driver’s salary.”

For Part I of the series, click here.

This article was developed in partnership with the Asian Preparedness Partnership (APP). More information about APP may be found using this link: Asia Preparedness Partnership (APP).