Wednesday, March 10, 2010

“Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)” plus 2 more

“Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)” plus 2 more

Banks’ consumer loans reach P413B in 4Q 2009 (Malaya)

Posted: 10 Mar 2010 06:53 AM PST

More consumer loans sourced from universal, commercial and thrift banks were recorded in the fourth quarter of last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

As of end-December 2009, the consumer loans (CLs) of universal/commercial banks (U/KBs) and thrift banks (TBs) reached P413.1 billion, higher by 3.2 percent than last quarter's P400.1 billion and by 8.7 percent than last year's P380.0 billion.

Meantime, the proportion of total CLs to total loan portfolio (TLP), exclusive of interbank loans dropped to 15.2 percent from last quarter's 16.0 percent but went up from last year's 14.8 percent ratio.

By type of CLs, Residential Real Estate Loans accounted for the bulk of total CLs at 39.4 percent or P162.6 billion.

Credit Card Receivables came second with a share of 27.9 percent or P115.5 billion.

Auto Loans and Other Consumer Loans followed with shares of 22.9 percent or P94.5 billion and 9.8 percent or P40.5 billion, respectively.

By industry, U/KBs held the majority of the banking industry's total CLs at 60.3 percent or P249.2 billion.

TBs accounted for the remaining share of 39.7 percent or P163.9 billion.

Loan quality improved as the ratio of non-performing CLs to total CLs of U/KBs and TBs dropped to 9.0 percent from last quarter's 9.2 percent but rose from last year's 8.6 percent ratio.

BSP said that the easing of the ratio from last quarter occurred as the growth in non-performing CLs was outweighed by the larger expansion in total CLs.

Non-performing CLs settled at P37.3 billion, up by 0.7 percent or P0.3 billion from last quarter.

Meantime, the non-performing CLs to total non-performing loans (NPL) ratio stood at 29.2 percent, up from 28.0 percent last quarter and 25.3 percent last year.

Meanwhile, non-performing CLs to TLP ratio settled at 1.4 percent, easing from 1.5 percent last quarter but up from 1.3 percent last year.

As of end-December 2009, other consumer loans (Other CLs) of U/KBs and TBs amounted to P40.5 billion, up by 10.4 percent from last quarter and by 9.4 percent from last year.

The proportion of Other CLs to TLP, exclusive of interbank loans stood at 1.5 percent, same as last quarter but slightly up from last year's 1.4 percent ratio.

Other CLs refer to loans granted to individuals to finance other personal and household needs such as purchase of household appliances, furniture and fixtures and/or to pay taxes, hospital and educational bills.

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Coles County Board paves way for local businesses to apply for low-interest loans (Journal Gazette & Times-Courier)

Posted: 09 Mar 2010 10:38 PM PST

Tuesday, March 9, 2010 10:03 PM CST
Coles County Board paves way for local
businesses to apply for low-interest loans

By DAVE FOPAY, Staff Writer
dfopay@jg-tc.com

CHARLESTON — The Coles County Board on Tuesday approved guidelines for private companies to apply for low-interest loans through a federally funded program.

There was little discussion on the proposal on the guidelines for private sector "recovery zone" applications, which passed on an 11-0 vote; member Jan Eads didn't attend Tuesday's meeting. There is now a March 23 deadline in place for the first applications, though other applications can be submitted as long as bonds that fund the program are issued by the end of the year.

Member Mike Weaver told the board that the guidelines are based on those from other counties that have "gone down this road."

In December, the board adopted an ordinance declaring the county a "recovery zone," meaning the area has been affected by the national recession. The designation meant the county can take part in a program in which the U.S.Treasury Department underwrites portions of loans that will come through bond issues; the applicant, not the county, would will responsible for repaying the bonds.

Doug McDermand, executive director of the county Regional Planning and Development Commission, told the board Tuesday that a qualifying project will probably need an estimated cost of at least $2 million to make the bond issue worthwhile. Other guideline requirements include an applicant's ability to repay the bonds, readiness to proceed and job creation or retention.

The program also provided money for government projects, but McDermand said there probably won't be any pending projects that would be ready in time to apply.

There's just more than $8 million available for private sector projects, which McDermand said could be used for construction or equipment but not inventory acquisition. The planning commission will review applications and then forward them to the county board for a vote on approval.

Also Tuesday, the board:

n Approved a contract with Johnson Controls of Toulon to help in bidding electricity and gas purchases.

The five-year contract has fees to the company ranging from $3,275 for the first year to $3,831 for the fifth year. Estimated savings by bidding for the utilities is just more than $19,000, compared to what the county paid for the last year, though there's no savings guarantee with the agreement with Johnson Controls.

n Entered into an agreement with the Embarras Area Water District to pay for water line relocation needed for work on the road accessing the county's newest Interstate 57 interchange. The county will pay the district about $114,000 to move the lines on County Highway 18 in the area closest to Illinois Route 130.

n Increased a fee charged for filing civil cases from $4 to $8 to fund the courthouse's law library. The increase will go into effect on April 1 and would be the first for the library since 1991.

n Entered into an agreement with North Okaw Township to replace a culvert northwest of Cooks Mills. The county and township will split the $12,000 cost.

n Heard a report from Chairman John Bell that the county 911 system received a $300,000 grant for equipment replacement.

Contact Dave Fopay at dfopay@jg-tc.com or 238-6858.


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'Your Money Milestones' refutes mainstream financial rules (USA Today)

Posted: 10 Mar 2010 01:56 PM PST

•Not enough people borrow from their 401(k) retirement plans.

•Parents should think of their kids as financial assets, not liabilities.

•You're wasting money on insurance.

Before you dismiss Milevsky's views as nutty, think about this: How well did following the conventional wisdom work for you in 2008 and early 2009?

Milevsky confesses that mainstream financial planning rules caused half of his family's net worth to disappear between November 2007 and mid-March 2009. He bought and held onto an ultralow-cost, globally diversified portfolio that included stocks of solid companies.

"I lost hundreds of thousands of dollars by doing everything exactly right," he says.

The experience caused Milevsky to rethink everything about money.

In the past, he thought about markets as a kind of roulette wheel. With enough data about historical behavior and outcomes, the argument went, you could predict the odds of success and make money with reasonable confidence.

Today, he takes the nuclear approach. You can't predict a nuclear accident using history or statistics, and you can't predict the next market meltdown. What you should do, Milevsky says, is concede that the future is unpredictable and then manage your most important financial decisions with clearheaded math.

For example, you should spring for a costly top-flight education when you're young, so the investment can pay off handsomely over the long term.

When investing, take more risks if you have a job with flexible hours and an income that's relatively immune to a recession. If your financial capital takes a hit, you can fall back on your human capital. Conversely, if your job is tied to the economy or the stock market, invest conservatively.

Milevsky gets a little too cute trying to turn his approach into principles of addition, subtraction, multiplication and division. And the book isn't really about money milestones. It's about the best way to think about money.

The author's theoretical principles make the most sense when he brings them into the real world. Take borrowing. Milevsky says we're thinking about debt all wrong.

Too often, he notes, we err by diversifying our debts the way we diversify our investments. We have credit cards, car loans, mortgages and home equity lines, paying off debt at different rates. Instead, you should use your low-rate debt to pay off your high-rate debt and stop incurring high-rate debt.

Americans could save billions yearly if they borrowed from their 401(k)s and used that cash to pay off their high-interest debt, Milevsky says. You won't owe interest or tax penalties, so you'd likely "earn" more by erasing the 18% credit card interest than you'd make keeping the money invested in your 401(k).

Parents should also rethink the way they perceive their kids economically. Milevsky says children are actually hidden assets. "Your kids can function like pensions," he claims. In most families with an above-average number of kids, Milevsky argues, odds are at least one child will help the parents financially in their advanced age.

Milevsky's best advice concerns insurance. Don't buy extended warranties or trip cancellation insurance. Similarly, don't choose low deductibles for your auto and homeowners policies (which raise your premiums).

Instead, buy insurance to protect against huge expenses that could cause financial hardship and self-insure ones you could truly handle. Keep some just-in-case money in the bank to tap for these minor emergencies.

Milevsky calls his account the family's Personal Insurance Reserve Fund and recently used the cash to repair a basement leak and a fender bender. "But the Reserve Fund is still showing a large surplus," he writes.

Richard Eisenberg is a freelance writer based in New Jersey.

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Posted by Rakhma at 4:16 PM

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