Monday, April 25, 2011

The War of Debt is On!

The rate of consumer credit defaults in the Philippines is almost triple the average in Asia (Malaya (2008))
  • ·         Consumer loans accounting for only about 10% of total bank lending and less than 5% of GDP.
  • ·         Philippines is a consumer-driven economy, which creates strong demand for consumer loans, with personal expenditure making up 77% of GDP (Fitch Ratings (2006)
  • ·         High delinquency rates have accompanied the growth of retail lending, especially unsecured lending, where overextension of credit to low-income earners has resulted in a non-performing loan (NPL) ratio of almost 20%.
  • ·         Credit cards provided by the banking industry are an emerging source of household credit in the Philippines.
  • ·         About 3% of the 5,000 sample household respondents have a credit card and around 4% expect that a household member will apply for a credit card within the next 12 months.
  • ·         Total credit card receivables (CCRs) outstanding of universal/commercial banks and thrift banks, inclusive of credit card subsidiaries, reached PHP 116.1 billion at end-December 2007
  • ·         Of the total CCRs, PHP 16.518 billion, or 14.2%, was past due as of December 2007, compared with 14.3% (PHP 15.199 billion) in the third quarter of 2007
  • ·         The trend in past-due CCRs could mean that more credit cardholders are having difficulties making their payments on time.
  • ·         The rate of consumer credit defaults in the Philippines is almost triple the average in Asia (Malaya (2008))
  • ·         On average, consumers end up paying a 3.5% rate per month, or 42% per annum, including the basic interest rate, fees and charges. 

  • The way I see it, the Philippines is really a consumer market. We have been programmed to be consumer minded  rather than investor minded people. The way out of debt is to discipline ourselves in managing our finances well. We must be buying on cash basis from the savings made. Avoid using your credit card and free yourself from the 3.5% interest per month.

Wednesday, April 20, 2011


The other day I got so encouraged by Dani Johnson’s idea on eliminating Debt. As I listened to her, the words she said still rings in my ear: “Debt is a habit and it has nothing to do with how much money you make!”

Anybody who wants to get out of debt should consider this seriously. Debt is habit-forming. It becomes your second nature when you don’t do something to stop it.

How do we get the habit?

You start simply by doing things REPETITIOUSLY. When you buy stuff on credit repetitiously, buying stuff on credit becomes EASY. When buying stuff on credit becomes easy, buying stuff on credit becomes PLEASURABLE. When buying stuff on credit is pleasurable, buying stuff on credit will be done OFTEN. Now here’s the clinger... When buying stuff on credit is done often, buying stuff on credit becomes a HABIT!
That’s how you acquire the bad habit called DEBT!

What’s the answer? Simply replace this BAD habit with a GOOD habit. The GOOD habit is buying stuff only after you’ve saved for it, in CASH. Now go and repeat the process by replacing that BAD Habit called Debt.

Here’s to your debt-free life,

Monday, April 18, 2011

The Modern day Slave

If you are in DEBT, you are a SLAVE, a modern day Slave!
In Israel, in the olden times, the Year of Jubilee was celebrated every seven years. People looked forward to this seventh year because it was the year when people were released and freed from the bondage of slavery. If they owe anything, their debts were cancelled. If they sold their land, it was returned to them. It was one of the most joyful time!

But why do they become slaves in the first place? When people owed something and couldn't pay, they become slaves to their creditor. Their creditor could sell or even kill them. Today, this still happens. Creditors could make your life miserable.

“Debt is a slavery of the free” Publilius Syrus

Today, many are still slaves to their creditors. They have allowed themselves to purchase items on credit hoping that when their paycheck comes, they can settle the debt. People buy appliances, cars, personal items and even groceries on credit. Unfortunately, the more they buy on credit, the more they wallow in debt until they can no longer free themselves from the slavery of debt and the tyranny of the creditor!
“The only man who sticks closer to you in adversity than a friend is a creditor.”

“Live within your means; never be in debt, and by husbanding your money you can always lay it out well. But when you get in debt you become a slave. Therefore I say to you never involve yourself in debt, and become no man's surety. If your friend is in distress, aid him if you have the means to spare. If he fails to be able to return it, it is only so much lost.” Andrew Jackson

There it is! Many times we miss the answer. We complicate things in life. The first step towards living a debt-free life is to follow the advice of Andrew Jackson, “live within your means”! I suggest that you take stock of all your debts and choose today to stop buying things on credit. Do not spend more than you earn. Live within your means.

P.S. There is a way out of this predicament. One thing you need to do is educate yourself and learn from those who have been there and have overcome their debt problems.

As they say, don’t go to a drowning man for swimming lessons. Never again will I be a slave to my credit card. I have learned my lesson, the hard way. Today, I am privileged to help people put their financial house in order. You too, will be set free from debt. Decide today to be debt-free. You can!

To your debt-free life,

Tuesday, April 05, 2011

#1 Reason Why I blog

I am a Pastor and a businessman. After working for Fujitsu Philippines for 17 years, I retired in 2000 and went into the ministry.  In 2008, I went back to the marketplace to manage a recruitment agency, UNO Overseas Placement, Inc. We send Filipino skilled workers to Japan under the Technical Intern Training System of the Japan International Training Cooperation Organization (JITCO). Part of the training we give to our Interns is the “Work Ethics and Values Seminar”.
The Work Ethics and Values Seminar was designed to help our Filipino Interns cope with life in Japan and equip them to face their future with both emotional and spiritual substance. The most important aspect of this 3-day seminar is changing the way these interns think. Most of them come from the province and urban areas. As such, ingrained in them is the poverty-mentality.

Seeing them wallow in poverty and in debt even before they leave for Japan, I made it my goal to help them be set free from this evil bondage. To break a bad habit of living in debt is not easy. The initial step towards freedom is to teach them to change the way they think and then increase their literacy about finances. So far, we have made progress. We believe money is not the answer to living a debt-free life. When they learn to manage their finances properly as good stewards of what God has given them and then take on an “investor mentality” as opposed to a “consumer mentality”, the interns begins to see that they can prosper!

I love helping our interns or OFWs change the way they think!

Last week, one of our interns came home after a 3-year contract in Japan. He is now a millionaire! What is his secret? He followed our advise by diligently saving 30,000 Yen a month! Now, his plan is to invest part of it in a food franchise.  Indeed, there is hope for our OFWs.

Last year, I became a member of Truly Rich Club. I am now incorporating the principles that I’ve learned and tested from Truly Rich Club to our interns. It is easy for them to understand financial literacy when they see how it works!

To your debt-free life,

P.S. I became more passionate to see our OFWs set free from poverty-mentality. Late last year, I decided to do online marketing and took Bo’s recommendation to enroll in Jomar Hilario’s Online Mentoring Club. I am now in my 4th month as a student of Jomar Hilario. I am making progress and one day, I will be sharing with them what I’ve learned.
This blog is part of our lesson. Honestly, it was the monetary returns that motivated me to do blogging. Today, I found the real reason for my blogging: to help my “Kababayans” specially our interns and OFWs, be set free from wallowing in debt.  If I can show them how to be free through my blogs, I would have done a good job. That’s why, now I love blogging!