Tag: OFW

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.

 

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.

SEDPI inks partnership with SSS to bring social safety nets to low income groups

“SEDPI believes that the marginalized sector should be the first to enjoy the benefits of government services,” Vince Rapisura, SEDPI President, said in a statement on the occasion of its Memorandum of Agreement signing with Social Security System (SSS). “Our partnership with SSS will realize this so that low income groups will benefit fron social safety nets of the government,” he added.

Social Security System (SSS), a government-owned and controlled corporation, provides social security protection to all self-employed persons and other qualified Filipino workers against hazards of disability, sickness, maternity, old age, death and other contingencies. On May 2019, SSS signed a memorandum of agreement with SEDPI to intensify the coverage of workers in the informal sector. SEDPI is now accredited and authorized to receive and screen non-collection and collection related transactions for SSS.

Members and their families are now provided easy and convenient access to SSS services through SEDPI. Previously, the service is extended only regular and associate members of SEDPI, as well as their family members, who are at the same time self-employed or voluntary members of the SSS. With the agreement, non-SEDPI members can now also course their voluntary contributions to SSS through SEDPI since it is an authorized collection agent of the institution.

SSS promotion thru SWePP

The Social Welfare Protection Program (SWePP) is the consolidated market-based and indigenous microinsurance and social security program of SEDPI which aims to provide security and financial safety net to members through adoption of various insurance schemes. With the agreement making SEDPI a collection agent, SSS now becomes one of the social security programs under SWePP. Through SWePP, SSS is further promoted to communities and individuals.

Membership to SWePP is open to Filipinos of legal age. Interested individuals should fill up an application form to become SEDPI members. Once filled up, SWePP services could be offered to them. The forms are available online or in SEDPI offices. These are also available during SWePP orientation programs in community gatherings and events of SEDP..

SEDPI members who avail of SWePP may course their voluntary contributions to SSS through SEDPI. It will also assist members in processing claims or benefits from SSS.

SSS promotion to Overseas Filipino Workers (OFWs)

As part of SEDPI’s commitment to promote SSS to marginalized sectors, the organization conducted training events with SSS representatives locally and abroad. Approximately 1,500 microenterprises attended training events promoting SSS in Agusan del Sur and Surigao del Sur. Abroad, around 2,230 participants, mostly domestic helpers, attended training events promoting SSS in Macau, Abu Dhabi, Dubai Doha, Bahrain, Egypt and Singapore. Recently, a series of trainings promoting SSS was held in different countries including Bahrain, Qatar, South Korea, Egypt, Spain, and Switzerland, where around 1,730 OFWs attended.

Most of the events abroad were in collaboration with the Philippine embassies, consulates, Philippine Overseas Labor Office (POLO) and Overseas Worker Welfare Administration (OWWA). The events became an opportunity to encourage Filipinos to patronize SSS and realize the benefits it offers.

Milestones and prospects on SEDPI’s partnership with SSS

At present, more than 800 individuals are registered with SSS thru SEDPI. Their contributions amount to more than PhP390,000.

Last June 2019, SEDPI conducted a training among its staff on the implementation of its SSS service. Targets on SSS registration were also set during the training.

SEDPI looks forward to register and make its members, especially OFWs and microenterprises, to become active members of SSS. With its 8,500 member microentrepreneurs and 500 member OFWs, it plans to register at least 3,000 of these member-clients and investors to remit a total of PhP1.0 million in contributions 2020.

SEDPI pioneers impact investing fora in 9 countries

“I found Vince Rapisura on Facebook and he constantly discusses being a social investor. Through him, I learned that investing can create more value than just mere profit. We can select investments that have a conscious goal of making a positive impact on society,” said a social investor in an online forum.

Impact investing are investments made to companies, organizations and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. In 2019, SEDPI was able to facilitate several fora in different countries on impact investing. The fora provided alternative investments that have positive impact in the quality of life of marginalized communities in the Philippines.

Furthermore, it provided avenues on how Overseas Filipino Workers (OFWs) could participate in impact investing while protecting their wealth and achieve their financial dreams. Vince Rapisura, president of SEDPI, shared his investments in social enterprises and microfinance institutions and elaborated on how OFWs can participate in these investments. He also showed the financial performance, social impact and repayment history of each investment option.

SEDPI’s impact investing fora were able to reach more than 900 participants in major cities around the world including Hong Kong, Milan, Rome, Dubai, Abu Dhabi, Macau, Tokyo, Singapore, Doha, Madrid, and Barcelona. It was able to gain new social investors and supporters by helping OFWs focus their attention not only in making profits but also putting social and environmental indicators when makinh financial decisions.

Vince Rapisura always reminded social investors, “Impact investing is investing with a heart.” SEDPI will further its engagements with OFWs as well as with other organizations to reach more investors for its ventures that surely has positive impact in poor communities in the Philippines and in the society, in general.

(L)earning Wealth: SEDPI provides financial literacy to thousands of Filipinos here and abroad

“Ang pagyaman, napag-aaralan.” This has been the statement which reverberates in the minds and hearts of every Filipino who underwent SEDPI’s financial literacy training.

Vince Rapisura, president of SEDPI, is slowly becoming well-known as a financial guru helping Filipinos, in and out of the country, manage their money better. In 2019, SEDPI was able to reach and engage thousands of Filipinos from different walks of life in its financial literacy advocacy.

Corporate workers

SEDPI strives to inform Filipino workers about the value of right financial management and planning. Its trainings stress the advantages of being financially prepared in different stages of life through different instruments such as savings, insurance and investments, especially for our workers.

Monde Nissin, the largest noodle manufacturer in the country contracted SEDPI to provide financial advice and guidance to 40 floor assembly line workers and management staff who are near retirement. It was also commissioned to deliver financial literacy trainings to Acer Philippines in May 2019 where 60 participants attended the training.

Non-Government Organization (NGO) workers and members

SEDPI was also able to reach and start a conversation on financial literacy with survivors of domestic violence and NGO workers providing support and services to victims of violence against women. This was made possible through ACTVE and Vital Voices that has a program on financial Literacy and Economic Empowerment for Survivors.

Outreach to OFWs under the care of POLO/OWWA

Not all Filipinos who work abroad find happy endings. A lot find themselves worse off compared ro when they were in the Philippines as they fell victim to illegal recruitment, human trafficking and employer abuse. Then there are also those who work in labor camps who rarely have the opportunity to access capacity building on financial literacy.

Alongside financial literacy events abroad, SEDPU makes sure to conduct outreach programs to these groups, Vince Rapisura, SEDPI president, spearheads this project in collaboration with his army of conVINCErs in various cities worldwide.

The trainings enphasize a message of hope, helping Filipino migrants develop a long-term financial plan to get out of the cycle of debt and jumpstart saving and investing once they reintegrate back to the Philippines. The particioants were given a list of cooperatives where they could become a member and help them start anew.

Nearly 300 OFWs attended the outreach program and were all given free copies of Vince Rapisura’s (L)Earning Wealth book.

Department of Education (DepEd) teachers and students

SEDPI continues to train public schoool teachers and students to improve their financial literacy. In 2019, around 600 DepEd students were given financial literacy trainings though SEDPI’s partnership with PTC-Carlos Salinas Jr. (PTC-CSJ) Foundation. Participants in these trainings came from Muntinlupa National High School, Muntinlupa Alternative Learning System, and Malayan Colleges Laguna.

Financial literacy training was held with the Department of Education’s Division of Malaybalay where more than 1,000 teaching and non-teaching personnel participated.

Moving financial education forward

The year 2019 has been a fruitful year for SEDPI’s financial literacy program. It has been a year full of opportunities to open minds and hearts of people towards better financial management and planning.

There are much more left to to do but the organization is confident that it is able to capacitate more and more people to gradually learn and earn wealth. SEDPI will continue with its advocacy directing people towards financial literacy as well as promoting social investments and social enterprises.

Ateneo OF-LIFE Program: Empowering Overseas Filipino Workers

The Truth about OFWs

When one talks about the Overseas Filipino Workers, they are often described as “mga bagong bayani” or the modern-day Filipino heroes. They are called that way because of how they are contributing to the Philippine economy through their remittances.

More than their financial contribution, though, they are also called “mga bagong bayani” because of their bravery to go outside the country, away from their families and loved ones, to work. As they work and find the money for their families, they also carry with them Filipino values and traditions such as resilience, hard work, hospitality, and “pakikipagkapwa”.

They act as ambassadors of the country, showcasing how fun and friendly Filipinos are to other nationalities. Despite these positive values, one glaring negative trait that most OFWs have is their bad spending habits.

OFWs act as one-day millionaires when going home: buying “pasalubongs” for their entire clan, traveling to beautiful tourist spots, organizing lavish homecoming celebrations, and treating friends and relatives with gifts, sometimes cash. After their vacation, they go back abroad again to work and save. And the cycle goes on, and on.

Once they hit their 60s, they do not have enough savings to live the life they used to have. The sad truth is that OFWs lack foresight and business mindset to secure their financial freedom. They need help and education.

One of the ways to address the needs of these modern-day heroes is through the Ateneo Overseas Filipinos’ Leadership, Innovation, Financial Literacy and Entrepreneurship program (Ateneo OF-LIFE). The Ateneo School of Government, Overseas Filipinos’ Society for the Promotion of Economic Security (OFSPES), UGAT Foundation Inc. and Social Enterprise Development Partnerships, Inc. (SEDPI) implement the program.

Ateneo OF-LIFE aims for Filipino migrants and their families to be united towards supporting each other in becoming empowered and highly respected members of the society, with the conscious mindset to contribute to nation-building.

Educating OFWs

Ateneo OF-LIFE boasts 90 batches in 23 key cities across the world since its inception in 2008 — Rome, Naples, Milan, Florence, Turin, Hong Kong, Dubai, Paris, Brussels, the Hague, Macau, Barcelona, Singapore, Madrid, Cuneo, Amsterdam, Abu Dhabi, Doha, Tokyo, Bangkok, Cairo, Seoul and Geneva.

The program offers 12 formal sessions at each city. These sessions are divided into three main themes: Leadership, Financial Literacy, and Social Entrepreneurship. The three themes are designed to educate the OFWs and their families.

By equipping them with practical knowledge of leadership, participants are encouraged to become servant leaders by highlighting the importance of serving and respecting other people. Further, OFWs also learned the values of active listening, perseverance amidst trials, and the empowerment of others.

Meanwhile, sessions on financial literacy provided the foundations of financial skills such as setting goals, saving, budgeting and investing. Lastly, the social entrepreneurship modules introduced the concept of social entrepreneurship and the potential role of OFWs as future entrepreneurs.

During these sessions, participants learned the necessary skills and knowledge to develop their own social enterprise idea or plan and on how to effectively present this to the public. All of these modules were presented through various training methodologies such as lectures, discussions, mentoring, and workshops.

Empowering OFWs

The program is a testament to the potential of the OFWs to become great contributors to nation-building. By having the knowledge to become servant leaders, by knowing how to achieve financial security, and by creating social enterprises anchored on their personal advocacies, they will amplify the very definition of what modern-day Filipino heroes are.

The impact of the program is seen through how the participants act after the program. Most became community leaders in their host countries, extending assistance to fellow Filipinos overseas.

Many were able to provide focus on their financial goals and began getting themselves out of bad debt, addressed bad spending, accumulated emergency savings and created passive income through investments. Some were able to successfully reintegrate back to the Philippines and implemented their social enterprise plans.

One of the notable participants of the program is Wilma Padura, who was one of the participants of the program in in Hong Kong in 2012. She was one of the awardees of the Bayaning Pilipino Awards in 2016.

In one of her interviews, she posited the importance of giving time for the self, saving for the future, and giving back to the community. These values are reflective of the three modules of the Ateneo OF-LIFE program- signifying how impactful the program is to the participants.