CFI.co Blog - Page 29 of 47 - Business, Finance, Economics

After East Asia’s financial crisis in the 1990s, middle-income countries including the Philippines made up 80% of the total East Asian bankruptcies filed.

Do you know what happens when you declare bankruptcy in the Philippines? We’re coming up on another financial crisis, so now is the best time yet to learn your legal rights. That’s why we created this guide.

Are you considering filing bankruptcy in the Philippines and want to know what to expect? Then you’ve got to keep reading because this article is for you.

What Exactly is Bankruptcy?

Bankruptcy is a legal process that takes place after an individual or company has defaulted on a debt.

Filing bankruptcy allows individuals options to either repay or offer collateral to erase their debts. At the same time, bankruptcies allow the bank or other lending institution to remove bad debt from their ledgers.

When the bankruptcy filer can’t repay debts, they typically end up divesting an asset. An asset is anything a company or individual owns outright. For example, buildings, homes, cars, etc.

The Philippines Bankruptcy Law: The Financial Rehabilitation and Insolvency Act

The Financial Rehabilitation and Insolvency Act (FRIA) legally allows the declaration of bankruptcy in the Philippines. Individuals can file for personal bankruptcy. Companies will file for business bankruptcy.

In the Philippines, there are three ways to file bankruptcy legally. We’re going in-depth with each method next, so check it out.

Suspended Payment

In some cases, an individual or business filing for bankruptcy can repay the debt over time. A Philippines court will restructure the debt payments to allow for a longer period of repayment.

Suspended payment bankruptcies are allowed when:

The debtor has the collateral to cover the debt but can’t meet payments by their due date
The debtor presents a restructuring payment plan that is both possible and agreeable to the lending party
Creditors or lenders who hold 60% of more of the debt liability get together and agree on the debtor’s proposed repayment plan

Once the lender agrees to the debtor’s restructuring strategy, the debtor can proceed with the suspended payment bankruptcy agreement.

Voluntary Insolvency

With voluntary insolvency, an individual or business defaults on a debt. Unlike suspended payment bankruptcies, voluntary insolvencies allow debtors to voluntarily give up assets to repay debts.

To file for this type of bankruptcy, the individual or company must have assets that sufficiently balance out the debts owed. However, these debts must be in excess of P500,000.

Individuals or businesses filing for voluntary insolvency are responsible for petitioning the court. The court will then determine whether the collateral offered is equal to the debts owed.

Within five days of approving the petition, the court will issue a liquidation order. Liquidation orders allow the original lenders to claim the proposed collateral to settle the debt.

Involuntary Insolvency

Involuntary insolvency is different from both suspended payment and voluntary insolvency bankruptcies in the Philippines. Why? Because Philippine creditors and lenders, not debtors, initiate involuntary insolvency.

Under FRIA in the Philippines, lenders with claims of P500,000 or more can file a petition with the courts. The court should be that of the city or province where the debtor lives.

This petition will outline that, upon default of the debt, the creditors will seek liquidation. If the debtor does default, the court can order the lender to seize the individual or businesses’ assets.

Civil Small Claims

In some cases, a lender can file a civil small claims case instead of choosing involuntary insolvency. This can only happen for debts of less than P400,000. The proceedings of a small claim case tend to be cheaper and quicker, which is why many creditors are more likely to use it.

The bad news? Individuals and businesses can’t actually have legal representation in small claims cases. If creditors win, debtors can’t appeal the ultimate decision either.

What Happens When You Declare Bankruptcy?

Bankruptcy is an extremely helpful tool for individuals and companies that can’t pay back debts they owe. Yet, bankruptcy isn’t without some serious consequences. Here’s what to expect after filing bankruptcy.

Your Credit Score Will Drop

After filing for bankruptcy, it will stay on your credit report. The bankruptcy will also lower your credit score. This will make it difficult to open lines of credit or apply for a mortgage in the future.

You Could Lose Your Stuff

If you go through voluntary or involuntary insolvency, you’re going to lose your assets. Debtors can choose which assets they’d prefer to divest in voluntary liquidation. Yet, if your lender files for involuntary insolvency, you’ll have no control over which assets they take from you.

You May Lose All Your Credit

Many credit card companies will immediately terminate your lines of credit after a bankruptcy. This is especially true if your credit card company is the same bank filing bankruptcy against you.

You Could Have Trouble Getting a Loan

We’ve already mentioned that a lower credit score means more problems getting a mortgage. This is also true for loans in general. Not only that, lenders see bankruptcies as a huge red flag, meaning you may have to pay ridiculously high interest rates for loans.

You May Not Get a Tax Refund

If you qualify for a tax refund in the same year you filed bankruptcy, you may not receive it.

You Could Face Difficulties Finding Housing and Jobs

Many employers and building owners pre-screen potential candidates for bankruptcy. Some employers won’t hire you if you’ve recently filed for bankruptcy. Worse, recent bankruptcy can affect your desirability as a tenant.

More Financial Advice from Capital Finance International

Now that you know what happens when you declare bankruptcy in the Philippines, you should feel confident knowing your rights when you can’t repay a debt.

Are you looking for more financial advice during these trying times? Then don’t forget to subscribe to our finance blog for new updates every week.

Banking

Union Bank of the Philippines Bridges the Gap for Unbanked Filipinos through Cash-out via 11,000 Remittance Outlets Nationwide

ByCFI.co Blogger

Union Bank of the Philippines (UnionBank) recently rolled out more cash-out options for customers via 11,000 remittance counters across the Philippines, including in rural areas where most of the unbanked and underserved population are located.

This makes UnionBank the first Philippine bank to launch the largest cash-out network in the country – a crucial step seen to significantly improve access to financial services for communities amidst the current pandemic.

Recognizing that sending funds to families and relatives living in provinces has been challenging, especially in far-flung areas where ATMs and bank branches are scarce or unavailable, UnionBank identified that the best course of action to address this concern was to enable customers to send money from home via its app to remittance counters in underserved areas.

The Bank leveraged existing partnerships with top Philippine fintechs such as Dragonpay and Coins.ph, as well as remittance centers Cebuana Lhuillier, LBC, PeraHub and Palawan Express. Integrating the service on UnionBank’s app was made possible in a short amount of time through Application Programming Interfaces (APIs) exposed on the Bank’s API Developer Portal/ Marketplace. This also enabled rural banks, who are currently on the UnionBank’s i2i network, to connect to the payout counters, allowing their account holders to send or withdraw funds from these non-traditional outlets.

In just a couple of weeks, UnionBank secured approval from the Central Bank of the Philippines, to perform a live pilot remittance and roll out the feature in the UnionBank Online app.

“With the onset of this pandemic, it has become crucial that our products and services quickly adapt to the challenges presented in this new digital normal,” said Edwin Bautista, UnionBank President and Chief Executive Officer. “This cash-out service is just one way for UnionBank to demonstrate its commitment to financial inclusion as we continue venturing forth in tech-ing up the Philippines.”

Upon the launch of this service, UnionBank noted an immediate high uptake by its customers. At the end of April 2020, with all major remittance centers available through the service, transactions have more than doubled. The Bank also recorded a 20% increase in daily digital account opening as a result of this feature.

“Through collaboration with various UnionBank teams and our fintech partners, we have demonstrated that the spirit of community is very much alive as we address the needs of our countrymen,” said Arvie de Vera, UnionBank Senior Vice President and Fintech Group Head. “This is a testament that we can use technology and digital services to ensure that no one gets left behind, especially as we weather through this ongoing crisis.”

Banking

Pent-up desire for holidays drives spike in demand for multi-currency cards

ByCFI.co Blogger

There has been a “sudden surge” in the demand for multi-currency cards as holidays and overseas trips are planned and as the pound remains weak, reveals the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, chief executive and founder of deVere Group, which in 2017 launched the pioneering global e-money app and multi-currency card, deVere Vault, comes as international borders are gradually re-opened around the world following the pandemic and ahead of the busiest time for holiday travel.

Mr Green comments: “There’s been a sudden surge in the last week from clients looking to use our e-money app and multi-currency payment card.

“This spike, we believe, is due to a steady relaxation of travel restrictions releasing a pent-up desire to escape lockdown, take a summer holiday, and/or see friends and relatives overseas as the world gradually gets back on its feet after a highly unusual few months.”

He continues: “But the fragile global economy together with the weakness of the pound, which is making almost every destination in the world more expensive for Brits, are making people even more pro-active in searching low-cost exchange rates and low-cost banking.

“The pound continues to be one of the worst-performing currencies in the world as we head into peak summer holiday season – and it could get further battered should the current Brexit negotiations fail.

“Against this backdrop, it is sensible that people are seeing the value in managing, spending and receiving money anywhere in the world without hassle and excessive exchange rates by using deVere Vault.”

Launched shortly after the Brexit referendum caused a significant drop in the value of the pound, deVere Vault is a trailblazing app and its Prepaid Mastercard®️ allows clients to spend, receive, store and transfer money in up to 27 different currencies.

Added to holidaymakers’ exchange rate concerns are excessive bank charges.

Mr Green says: “When you use your debit or credit card abroad in anything other than your destination’s local currency, you could be paying excessive exchange fees.

“Typically, an extra 6% is added on top, but these fees can be up to 10%. All too often the customer is completely unaware of these costs.

“This is simply not on. In an increasingly globalised world, people have the right to expect hassle-free, borderless access to and use of their money, without over-the-top charges.

“deVere Vault addresses these issues.”

It automatically pays in Sterling in the UK, U.S. Dollars in the States, Euros in the eurozone, and Swiss Francs in Switzerland, for example.

The multi-currency account also allows you to withdraw and spend money anywhere in the world where Mastercard is accepted.

The deVere CEO concludes: “The world is beginning to re-open, but, more than ever, those planning trips abroad don’t want to get caught out. They need and want to protect their holiday cash from excessive exchange rate and banking fees.”

Banking

Cryptocurrency 101: Learn the Basics

ByCFI.co

Unless you’ve been living under a rock, you’ve heard of cryptocurrency. Cryptocurrency is a virtual currency that could replace our cash system one day.

Virtual currencies like Bitcoin are working to cut out the middle man in our banking transactions. Read this article to learn cryptocurrency 101 and whether you should invest or pass.

Cryptocurrency 101

Cryptocurrency is a virtual or digital currency. It is secured by cryptography. Cryptography is a method of encoding and decoding data. Essentially cryptography puts the “crypt” in cryptocurrency. Cryptography makes it almost impossible to counterfeit money.

Cryptocurrencies (yes there are more than one) use blockchain technology. It works by dispersing a ledger among a network of computers. These computers all work to keep up with it.

Understanding Cryptocurrency: How it Works

With cryptocurrencies, there isn’t a central authority. They are not issued by a government or a bank. In theory, this makes cryptocurrencies free from government interference or manipulation.

Payments are made online using “tokens”. The ledger keeps track of all the entries and how much currency everyone has. Verifying transactions is usually the role of the banks but cryptocurrency relies on the peer-to-peer system.

This system allows for your transactions to be secure. It reduces the risk of fraud and allows your transactions to be more transparent.

Popular Cryptocurrencies

Bitcoin was the first blockchain-based cryptocurrency. It was started in 2009 by an individual known as Satoshi Nakamoto. Today it remains the most popular and valuable.

Since Bitcoin started there are now thousands of different cryptocurrencies people can use. Each cryptocurrency has its function in the market. Some of these cryptocurrencies copied Bitcoin and others were built from scratch.

At the time of this article, USD 27.5 billion BTC has been traded in the past 24 hours. A single token or BTC of Bitcoin is worth USD 9,435.04.

Other popular cryptocurrencies include Litecoin, Ethereum, Namecoin, Cardano, and EOS. If we calculator the total value of cryptocurrencies all together that number would be around USD 251.8 billion. To put that into perspective that is about 0.7% of the world’s money.

Is Cryptocurrency Safe?

Cryptocurrency experts would remind you that Investing is always a risky business. However, Some traditional experts say investing in cryptocurrencies, like Bitcoin, is even more of a risk.

The world has been caught up in “crypto-mania” as people began buying and selling cryptocurrency like stocks. We’ve all heard the stories of people who became millionaires overnight thanks to Bitcoin business opportunities.

We’re not going to suggest investments. That should be left to you and your portfolio manager. However, we will say you shouldn’t invest in something you don’t fully understand. This advice goes for any investment.

Pros of Cryptocurrency

There are a lot of pros of cryptocurrencies. Cryptocurrencies make it much easier for two parties to exchange funds. No longer do you need a bank or credit card company to serve as a middle man.

The transfers are secure. There is very little risk of counterfeiting or double-spending. They are also completed with very minimal transfer fees. The fee is much lower than the charge for a wire transfer from a bank.

With more customers choosing to make payments from their mobile phone, tablet, or Apple Watch, cryptocurrency is a cheaper and more efficient system for payment.

Cryptocurrencies have the potential to create a borderless, global economy. That’s a win for everyone (well, maybe except banks). It can help fight financial inequality by taking out the bank and credit card middlemen and bring financial services directly to the people.

Cons of Cryptocurrency

Cryptocurrency sounds great but there are a few drawbacks to blockchain the technology it is based on. For one, blockchain isn’t as scalable as centralized banking systems. If you’ve ever made a bitcoin transaction then you noticed it took some time to complete.

Remember the ledger we talked about? The blockchain network of computers is kinda slow to make changes to the ledger. And if you think it is slow now just think about how slow it would be if more people started using bitcoin!

Another common issue is that you can lose your cryptocurrency hack. When you purchase cryptocurrency most people store it in their wallet. Wallets are located on the exchange.

Billions of dollars of Bitcoin and other cryptocurrencies have been lost on the exchange from hackers.

A smarter place to store your cryptocurrency would be on your smartphone’s cryptocurrency wallet because generally speaking, smartphones are not hacked.

But even if you use a wallet on your smartphone it is still possible to lose your cryptocurrency. You could misplace or forget your “key” or password for the account. There is no forgot my password link to click with cryptocurrencies.

Your phone’s OS, operating system, could also become corrupt. This could delete your wallet from your phone. Bye-bye cryptocurrency. There is hardware now available for people to back up and secure their wallets.

Trading Cryptocurrency

If you are trading cryptocurrencies, there will be fees involved. These fees are still a fraction of a per cent of the total transaction amount depending on the cryptocurrency exchange you use. You can also avoid some fees by using your wallet.

The fees involved will vary depending on the total number of people who are buying and selling your particular cryptocurrency.

In general, the more people the higher the fee. In the beginning, when most people had never heard of trading Bitcoin the transaction fee was around 6 cents. Today that fee is much more and it is always changing.

Consult With Your Financial Advisor

We hope you enjoyed reading cryptocurrency 101. Many positive benefits could come from a virtual currency like Bitcoin or others. There are also many other positive benefits blockchain technology has in healthcare or voting systems that are also being explored.

Be sure to subscribe to our print magazine and follow us for more content on technology, business, investing, and finance.

Economics

Investors buoyed by extra U.S. stimulus to support recovery

ByCFI.co Blogger

Investors who have been “paying attention” have been topping–up their investment portfolios and will continue to do so, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The comments from Nigel Green, the chief executive and founder of deVere Group, which has $12bn under advisement, come as stock markets around the world further rallied on Tuesday after the U.S. Federal Reserve announced an expansion to its historic stimulus programme.

Mr Green affirms: “Global stocks have been buoyed by the news from the Fed – the world’s de facto central bank – to buy individual corporate bonds in addition to the exchange-traded funds it is already purchasing, to support the world’s largest economy.

“This extra stimulus acts as a ‘backstop’ or ‘floor’ for equities.

“The additional Fed support was widely expected by the markets and therefore, investors who have been paying attention have been topping-up their investment portfolios recently as entry points will inevitably continue to go higher as we move forward.”

He continues: “It is likely that savvy investors will continue to enhance portfolios as the backing is likely to be maintained for years, not quarters.

“Also, it has been reported that President Donald Trump’s administration is preparing to unveil a $1 trillion infrastructure package. This will further boost asset prices.”

The deVere boss called the additional measures last week.

He noted on Thursday June 11: “Further stimulus can be expected from the Fed – and also perhaps from Congress too – in the near future… This will support and likely boost asset prices moving forward. Investors will now be eyeing the opportunities before any fresh or enhanced stimulus packages are announced.”

London’s FTSE 100 and Frankfurt’s Dax both jumped 2.2% in morning trading on Tuesday, the pan-European Euro Stoxx 600 gained 2%. U.S. futures markets suggested that U.S. stocks would rise further when trading begins on Wall Street, with S&P 500 futures up 1%.

In Asia-Pacific, Tokyo’s Topix shot up 4% and Australia’s S&P/ASX 200 gained 3.9%. Meanwhile, Hong Kong’s Hang Seng rose 2.4% while China’s CSI 300 index was 1.5% higher.

Nigel Green concludes: “Few things can fuel markets like another stimulus injection.

“The message investors are taking away is that the U.S. central bank and government are prepared to do whatever it takes to support the recovery.”

Digital Banking

5 Benefits of Acquiring Payday Loans Online

ByCFI.co Blogger

It is well-known that online payday loans are an excellent option to cope with unannounced financial problems. If you have found yourself in a challenging situation like medical emergency, late utility bills, and mortgage repayments, you can acquire a payday loan. It can be advantageous for you in more than one way.

Fast Processing

If you are looking for bad credit loans monthly payments, you should definitely consider obtaining payday loans because they process very fast. Unlike traditional loans, you don’t have to go through lengthy processes. If you apply for a payday loan with a good online lending company, your loan application will be approved within minutes. And you will be able to acquire cash on the same day. You wouldn’t have to wait for days or even weeks to meet your financial emergencies. You can feasibly apply for payday loans online under any unexpected financial situation.

Easily Qualification

You can conveniently qualify for payday loans online. You don’t have to face substantial documentation and lengthy processing periods like traditional loans. And there are low chances that your loan application will be rejected. Online lending companies have straightforward requirements if you happen to meet those, you are in a favorable position to acquire payday loans same day. You need to have a valid proof of monthly income, a bank account, and your driver’s license to qualify for loans easily. However, you should know that the amount of payday loans are totally dependent on your monthly income.

No Credit Check Process

Since payday loans are convenient, there is no such thing as a credit check process. You are only required to meet a few basic terms & conditions, and then you are good to qualify for a loan amount. You can surely apply for payday loans with no credit check. Individuals with even bad credit history or score can easily be eligible for payday loans as long as they are capable enough to give valid proof of their monthly incomes. When it comes to payday loans, you don’t have to worry about credit checks. It is noticed that only a few online lenders ask for a credit check when it comes to negotiating for a significant amount.

No Usage Limitations

You can use payday loans for anything. Generally, these loans have no limitations; it doesn’t matter what payday loans can be used for. When it comes to traditional bank loans, you are bound to use the amount for one or two things. For instance, if you are applying for a bridge loan, you will be able to use this just for purchasing or selling your property. However, with payday loans, you are not bound at all. You can acquire payday loans to meet your financial needs under any emergency. Your lender will have no issues as you can use the loan amount for whatever reasons.

Automatic Lending System

When it comes to payday loans online, you can expect an automatic lending and transferring system. After an online lending company has approved your loan application, it will directly transfer the amount to your bank account. And once your payday has arrived, the borrowed amount will be transferred back to your lender automatically with added interest. You wouldn’t need to do anything else on your end.

Economics

No-deal Brexit fears trigger investors to seek international options

ByCFI.co Blogger

Growing fears of a no-deal Brexit will prompt an increasing number of British and international investors to move their financial assets overseas out of the UK, believes the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, founder and chief executive of deVere Group, which has $12bn under advisement, comes as the UK formally rejects an extension to the Brexit transition period – raising the risk of a no-deal departure at the end of the year.

Mr Green notes: “Due to the Covid-19 pandemic, the UK is suffering its deepest recession in 300 years. Nevertheless, the government is sticking with its hard Brexit plans.

“Concerns over the fallout from a no-deal Brexit will prompt an increasing number of British and international investors to move their financial assets overseas out of the UK.”

He continues: “Should the UK leave with no-deal, the already weak pound – which is one of the world’s worst-performing currencies this year – is likely to remain weak for several years to come until Britain and the EU readjust. It has already shed about 20% of its value since the EU referendum in 2016.

“A low pound can help to reduce people’s purchasing power and lead to a drop in UK living standards. Weaker sterling means imports are more expensive, with rising costs being passed on to consumers.”

The drop in sterling is good for UK exports some insist, however around half of the country’s exports rely on imported components. “These will become more expensive as the pound falls in value,” noted Mr Green.

“In addition, a weaker pound is, of course, bad news for British expats, amongst others, who receive income or pensions in sterling and as Brits looking to travel overseas,” he added.

The deVere CEO goes on to say: “Britain appears to be sleepwalking towards an economic blackhole.

“People are already becoming increasingly nervous about this situation. Many will, inevitably and quite sensibly be looking to build and protect their wealth by moving assets overseas through various established international financial solutions.

“The pace of this trend is likely to increase over the next few months as the issues look set to ramp-up.”

Finance

6 Tips for Preventing Fraud

ByCFI.co Blogger

In the first 6 months of 2019 alone, £616m was stolen from banks in the UK due to fraud. In the Philippines, there were over half a billion pesos lost due to credit card fraud. Each year, banks, ATM systems, and credit card scanners come up with new ways to protect you against identity theft and fraud. These upgrades don’t seem to last, however. As quickly as the safety upgrades are made, it seems criminals are coming up with new ways to get around them. You can never be too safe and that’s why you need to learn about preventing fraud yourself.

The more knowledge you have about it, the better chances you have at avoiding it altogether. Don’t be a victim to identity theft, fraud, or any other type of financial scam. Continue reading below for six of the best tips to know about preventing fraud in your life.

1. Take Advantage of All Online Security Features

If you bank online, then you need to set up an account with as many security features as possible. Your banking app has these features set in place for you to ensure your information stays secure. If you’re not taking advantage of all the security features, then you could be placing yourself in a better position to get hacked.

Most banks will offer a multi-step authentication process when logging in accounts online or on the app. Make use of these. For example, to access your account, it might require you to give your fingerprint, log in using your credentials, send a security code to your phone, and make you answer security questions.

Use as many of these features as you can.

2. Check Your Bank Statements Frequently

Some criminals will gain access to your bank account and spend a large amount of money all at one time. Others will use your information to make purchases overseas. When either of these situations happen, it signals a red flag to your bank.

Other fraud criminals, however, are a bit smarter with their crimes. They’ll start out by only taking small amounts out here and there. This makes it less recognisable by you and your bank.

To catch them in the act, you’ll need to keep an eye on your bank statements on a regular basis. Log into your accounts and go through each withdrawal.

3. Avoid Accepting a Check and Wiring Money

One of the most common ways criminals scam innocent people is by sending them a check and asking them to wire money back in exchange. This mostly happens when someone makes a private purchase. A person will contact you saying they want to purchase something you have for sale.

They’ll explain to you that they only have a check for a certain amount, which is greater than the price of the item. They’ll send you the check and ask you to then wire them the difference. After you wire them the difference, you’ll soon learn that their check was bad.

If anyone approaches you with this scenario, decline. Avoid accepting checks with the intent to then wire money. Once you wire your money, it’s gone, and usually can’t be traced.

4. Never Use a Public Computer or Connection

When you do need to log into your bank account online, never use a public computer or a public connection. You only want to use your private phone network or a secure network at your house or someone’s house who you trust.

When you log into your bank accounts using a computer that isn’t yours or from a public internet connection, you take the risk of a scammer hacking your information.

5. Report a Card Lost or Stolen Immediately

Haven’t seen your bank card in a few days? Don’t wait to report your card lost or stolen. Even if you believe it fell in that hard-to-reach place in your car, don’t take the chance of not reporting it.

Replacing your credit and debit cards with your bank is quite simple. They’ll even give you a temporary card to use while waiting for your new one to come in the mail. Even if you have to go a few hours or days without access to your account, it’s better than allowing an unauthorised user to have access to it.

6. Contact Your Bank About Added Safety Features

Following these tips is a great way to reduce your risk of bank fraud. There is more you can do, though. If you feel you need an extra layer of protection on your account, then contact your bank directly.

Ask about what security features they offer. They might be able to put a high alert on your account. This sometimes means that you’ll have to go inside the bank to make any type of transaction and the slightest detail in your account statement could warrant a phone call to you from your bank.

Some of these features might seem like they’d become pestering, but it’s the best way to ensure no fraud is allowed on your account.

Preventing Fraud Is Simple When You Know These Tips!

Finding out your bank account has fraudulent transactions is a big hit to the gut. If not caught right away, it can sometimes take years for people to gain their identity back or get their life back together after a scam. Don’t be one of these people.

Preventing fraud is easy when you follow the tips listed in this post.

For more topics as helpful as the one here, visit our blog on a daily basis!

Banking

Union Bank of the Philippines among ‘Most Helpful Banks in Asia-Pacific’ during COVID-19

ByCFI.co Blogger

The only Phl bank in the Top 20

Union Bank of the Philippines (UnionBank) has been ranked as the second most helpful bank in Asia-Pacific during the coronavirus crisis – the only Philippine bank in the top 20 list.

UnionBank was next only to KakaoBank, South Korea’s largest digital-only bank, according to the BankQuality Consumer Survey on Retail Banks – an online survey conducted last April 1-30, 2020 and covering total 11,000 respondents, with 1,000 each coming from China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

The respondents, aged between 18 to 65 and who have at least one bank account each, chose the banks most beneficial to them amid the ongoing pandemic because of their contactless nature and digital services.

UnionBank was ranked higher than international banks such as HSBC, Citibank, DBS, CIMB, United Overseas Bank and OCBC, among others.

UnionBank president and CEO Edwin Bautista expressed gratitude for the public’s recognition of the bank’s quick, sincere and relentless efforts to help alleviate their plight in this difficult time.

“It warms our hearts to know that our customers recognize and value our heroic efforts during this crisis. The coronavirus pandemic has brought the world an unprecedented disruption, but with each of us doing our share, we will weather this challenge – no matter how massive it can be,” Bautista said.

Since the start of the quarantine period, UnionBank boosted its mobile and web banking platforms for retail and corporate customers namely UnionBank Online and The Portal, respectively, to enable clients to safely do their banking transactions from home.

UnionBank was also among the first banks to waive its online fund transfer fees, and deployed its Bank On Wheels to bring its bank branches at the doorstep of its customers.

“I would like to also thank our very hardworking and selfless UnionBankers – frontliners all – who have been doing their utmost during this pandemic to deliver safe, consistent and full service digital banking to our customers, for this accolade,” Bautista added.

The bank’s fintech arm UBX, has facilitated the release of cash subsidies through the deployment of mobile automated teller machines (ATMs) to its rural bank partners and financial cooperatives where beneficiaries of the government’s Social Amelioration Program can withdraw their money quickly.

UBX has also begun linking its rural bank members to its new network that includes Cebuana Lhuillier, LBC, Palawan Express and PeraHub. This enables customers of these rural banks to send funds and payments to over 11,000 branches of the four remittance centers nationwide.

Wealth Management

How Do Mutual Funds Work? The Complete Guide to Mutual Funds

ByCFI.co

Are you a long-view investor with an interest in seeing your wealth grow over 10, 20, or 30 years? If the answer is yes, then you need a diverse portfolio of assets to help you achieve your goals.

One of these assets is a mutual fund. Mutual funds are a collection of assets grouped together according to an investment strategy and run by a fund manager. Compared to individual securities, mutual funds provide a certain level of protection against the volatility of the stock market and still deliver steady returns for investors.

How do mutual funds work? Keep reading for a quick primer.

What Are Mutual Funds?

Mutual funds are called investment baskets. Rather than being one form of security or investment on their own, mutual funds are a container for a group of different types of investments, usually stocks, bonds, or a combination of the two. However, they can contain other types of investments. The primary types of mutual funds include:

Equity funds
Bond funds
Balanced funds (equities and bonds)
Money market funds
Fixed-income funds

When you invest in a mutual fund, you invest in the basket of investments rather than a single stock or share. You also pool your money with all the other fund investors, which grants you access to investments that aren’t available to the average solo investor.

How Do Mutual Funds Work?

A mutual fund has a fund manager, who oversees the fund and chooses the investments found within it. The manager may choose to actively or passively manage the fund according to a set strategy or according to the manager’s whims.

Many mutual funds are increasingly passively managed because research shows that passive investments earn better returns compared to actively managed investments. It’s rare for active investment strategies to outperform the market.

How does the mutual fund make money? It depends on the type of fund you choose. When your investment earns you returns, it comes in the following forms:

Income earned via dividends
Growth in price of securities or capital gains
Fund share price (net asset value) grows

You’ll also pay fees for your mutual fund. These include the cost of the fund (e.g., administration and operating costs) and sales commissions. Keep in mind that these fees are typical percentages of the fund, and you’ll pay them annually. A fraction of a percent can be the equivalent of thousands of dollars.

The fees you pay depend on the structure of your fund. It pays to research the type of fund that best suits your financial goals and to compare fees between funds and fund providers.

Why Choose a Mutual Fund?

Mutual funds are increasingly popular because they offer even the novice investor something that the pros could only covet a few years ago: a diversified portfolio. Because you invest in a basket of investments, your profits and losses aren’t solely tied to one company’s performance. Diversity means you have a lower risk of losing everything if a stock performs badly.

Another reason investors of all types choose mutual funds is that they come with a fund manager. You don’t have to actively trade them or even worry about all the investments inside the basket. You pay the investor a fraction of a percent of the value of your account to worry about that for you.

By working this way, mutual funds use a high volume of transactions to reduce the cost for you as an individual investor. Rather than paying as much as $5 a transaction, you split the bill with other investors.

Are There Disadvantages of a Mutual Fund?

Mutual funds do come with disadvantages compared to other types of funds like exchange-traded funds (ETFs).

The biggest issue that investors find with mutual funds is that they can be expensive. Typically, mutual funds become very expensive with a small investment and then again at the top of the scale. Many providers offer the best rates to those with mid-size accounts.

Another issue with mutual funds is that they can be inefficient compared to ETFs. Efficiency applies both to tax efficiency and the cost of maintaining the fund vs. the returns it offers. ETFs generate fewer capital gains distributions, and they have their own way of buying and selling that triggers less taxable income. However, you may find that some passively managed mutual funds are also tax efficient if only because they generate fewer transactions.

How to Find the Right Mutual Fund

Although there’s a shortlist of widely popular mutual funds, a fund’s popularity doesn’t necessarily mean it’s right for you.

Finding the right mutual fund requires you to find a fund that meets both your financial goals and your risk tolerance as well as a philosophy that reflects your own investment philosophy.

From there, you can start to consider the costs of the fund and the management style to whittle down your list of contenders and begin investing.

Use our guide to choosing the best performing mutual funds to get started.

Are Mutual Funds Right for You?

How do mutual funds work? They pool investors’ money together in a basket of securities to provide long-term growth with some protection from market volatility.

Mutual funds are a diverse group of investment tools, but almost every investor can see some benefit in adding top-performing funds to their portfolios. The trick is to find the fund that best matches your personal goals and your investment philosophy and strategy.

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