www.moneysense.com.ph
MoneySense
September - October 2008
COVER
Rico Hizon: 42 The Face of Business
The story of how the BBC anchor found his niche and discovered his passion for art
By Elena Torrijos
Easy Money Index
8 66
WEALTH AND PHILANTHROPY Billionaires’ Secrets
46
How do the ultra-rich go from “mere” multi-millionaires to billionaires? A closer analysis of the 40 richest Filipinos provides eight answers
By Carlos Gonzales
Jose E.B. Antonio: Success Built on Failure
The Century Properties founder persevered and hit the big time
By Tina Arceo-Dumlao
Ramon del Rosario Jr.: A Wealthy Mind
After building one of the country’s foremost conglomerates, this business leader and one of Asia’s top altruists is setting his sights on affordable education and housing for the poor
The chairman and chief executive of Plantersbank built one of the most successful banks in the country and a lasting legacy
52
Ask the Experts
54
If you have built your riches and want to leave a legacy, consider putting up a charity under your name
By Tina Arceo-Dumlao September - October 2008
MoneySense
RFP Money Makeover
OFW Dreams
By Joanne T. Sison
Financial Planner 56
By Lynda C. Corpuz
How to Set Up Your Own Foundation
By Tina Arceo-Dumlao
Jesus Tambunting: Banker of SMEs
58
29
5 Tips for When Your Back is Against the Wall
By Efren Cruz
Portfolio
Hate ‘08???
By Francisco Liboro
26
30
Family Finance
31
The Hand That Does the Grocery Rules the Home
By Salve Duplito
www.moneysense.com.ph
The Bottom Line Liability Insurance 101 60
You or your company got sued? Don’t let your personal assets be wiped out. Here’s a quick primer on this much misunderstood type of insurance
By J. Randell Tiongson, RFP®
Advice for the Wealthy 63
If you have the money but not the time or expertise to manage it, turn to a wealth manager
By Tina Arceo-Dumlao
My Money Story Pinay Pathfinder 32
A life coach talks about her job and about life as a professional in the UK
By Dr. Joy Barredo as told to Maan D’Asis Pamaran
A Widow’s Story 34
A heart-breaking loss turns this mother to help other widows like her
By Susan Dimayuga-Javier
My Instant Business 36
Industrious and methodical, this modern mom makes a trouble-free transition from employee to entrepreneur
By Joanne G. Marasigan as told to Regina G. Posadas
The Ka-BOOSH Way 38
This businesswoman talks about the trade in children’s wear
By Trinidad Ramos as told to Excel V. Dyquiangco
Eating It Up! 68
My Virtual Office 40
An online entrepreneur shares his success working at home with the world as his market
By Oliver Kuy as told to Excel V. Dyquiangco
Smart Spender
A field guide to hotel buffets
By Amabella Jimenez
Insider Tips for Business Travelers
Get savvy advice from getting a free upgrade to business class to staying productive
By Heinz Bulos
74
Riding in Style 77
IN EVERY ISSUE
Luxury cars are certainly a status symbol, but for car enthusiasts, it’s all about power, safety, and design
By Tina Arceo-Dumlao
Here’s a Final Tip
Editor’s Note
4
Building the Nation is Our Business 80
Feedback From Readers
6
By Antonio Meloto
www.moneysense.com.ph
MoneySense
September - October 2008
Feedback from readers I bought my first issue of MoneySense magazine this month. I found out that it is a very well-written and informative magazine. It certainly meets the needs of those of us who are taking our first steps in managing our finances – without giving us a nosebleed from reading all the technical financial terms! It is presented in such a way that it doesn’t intimidate us newbies. Congratulations and may your circulation increase and reach out to more Filipinos. I’d like to ask where we can find back issues. I’m particularly looking for your March-April 2008 issue. Many thanks and more power! – Margarita Genato I really enjoy reading MoneySense. I have already read around four issues and have read it from cover to cover. I chanced upon it when one of our past executives, Melvin Esteban, was interviewed. Every time I see a MoneySense lying around the office, I take the time to read. The articles are very interesting and well-written. I would also say that it is very apt for people like me for who are interested in broadening their financial perspective. It would be great if you could have a regular portion on bank rates, loan rates, and also available financial instruments in the market. Something similar to a shopping cart where all instruments would be there and ready buyers will just choose which institutions to invest in. I am also interested in being a contributor, but I haven’t really constructed any portfolio. I’m particularly interested in writing on finances/investment/ savings – the Chinese perspective. – Yvette Michelle Llanos Dee Yao I’ve been reading your magazine just a couple of months back and I would say that I love the concept. Well I’m not a finance guy so it does really help a lot to know that there is a magazine specializing in finance and everything about finance and investments. I’ve heard so many things about mutual funds nowadays and I’m a newbie to the concept so I was wondering if there is a possibility that in your succeeding issues that you will be able to feature everything about mutual funds. It would really help not only me but all the readers as well to gain knowledge on the ins and outs of mutual funds. I’ve heard that only a few mutual fund companies operate here in the Philippines and I want to know who the top companies are. Thanks guys! More power! I love the mag! – John Wilhelm
I have been invited to give a seminar on financial literacy in one of the barangays here in Pateros. Like what I always do, I always endorse your magazine to anyone who is willing to listen. If the seminar is successful, I still have three barangays to visit. This is because I have been endorsed by one of my employees to the barangay captains. I truly believe your magazine can and will change a person’s perspective in life about saving, spending, and investing wisely. – Sam Gaviola I was at UCC-Mall of Asia and read the May-June issue. Could you also send me that issue? I was not able to finish reading it. – Phyllis Sy I’m here in Singapore. Do you have any distributor here where can I buy the August issue? I’m interested since this is an OFW issue. – Joel Reyes I would like to subscribe to your magazine for a one year subscription. I believe you started 2007, can you e-mail me your old issues? I’d like to buy your old issues as well if they interest me as well. –Rhona Vera Cruz I would like to know how I can get back issues. I just recently saw your magazine while waiting for my turn at my suking barbero. I really like the topics. I bought the recent issue (Laxa-Pangilinan), however I can’t find back issues. I wanted to have the JanuaryFebruary 2008 issue. Thank you very much in advance. – Roy Cadongonan
[Thank you to all our readers who wrote or replied via e-mail. It’s nice to know this magazine has been instrumental in your financial goals. We appreciate all your support. Our back issues are available at our office. Just call or e-mail us. ] – Ed.
We love to hear from you! Send an e-mail to info@moneysense.com.ph
IT’S always a delight to hear from our readers.
Send your tips! Our section Easy Money gives short tips
on everything from planning to retirement. We want to know your personal tips about managing your finances.
What’s your money story? We want to feature inspiring stories of ordinary Filipinos who are struggling with money issues or have made great strides in their quest for financial freedom.
September - October 2008
MoneySense
Contribute! We are always on the lookout for excellent writers and artists. Send us your resume and portfolio. Send us feedback! And yes we know, there’s always
room for improvement. So keep those comments and suggestions coming (letters and replies may be edited for space considerations). We want to know what you think about the articles and the layout as well as topics you want us to cover in future issues. www.moneysense.com.ph
Easy Money plan
Finding Your Greener Pasture nowing the hot job markets was the first step we K cited in 10 Steps to OFW Riches (July-August OFW
issue). But while we identified for you the top destinations and current opportunities, there are still other factors to consider in finding your own greener pasture:
Do your research and paperwork. This is stating the
obvious, but you want to make sure your destination of choice actually welcomes foreign workers, particularly for your skills and line of work. Completing papers though is time-consuming, and on occasion, nerve-wracking. Research about the country where you want to work, know if you need either a working permit or visa or residency visa, contact the nearest embassy, and scour the Web to give you an idea of the paperwork you will need to complete.
Identify what you want to and can do. Others go abroad and hop from one casual job to another, like bar tending or shop keeping. Before you jump on that plane, list down all your skills and work experience, and check if your preferred country is looking for foreign workers with your skill set. Right now, the demand is for jobs in cruise lines, hotel and food services, construction, education, and healthcare, according to the book Finding Work Abroad: A step-by-step guide. Click the mouse. It is easier to search for overseas
jobs through the Internet. Job portals like JobsDB. com, Monster.com, and other similar Web sites post job vacancies and accept resumĂŠs. You can also check online editions of newspapers abroad that also post vacancies. However, be cautious of bogus Web sites of illegal recruiters, which victimize people by collecting placement fees for non-existent jobs, warns Carlos Canaberal, Philippine Overseas and Employment Administration (POEA) planning and policy division chief.
www.moneysense.com.ph
September - October 2008
MoneySense
MoneySense
September - October 2008
Easy Money
retire
Retirement Planning, Pinoy-Style wondered how Filipinos view E ver retirement planning? We conducted a short survey with 100 respondents answering 10 questions: 1) Age, Sex 2) Profession 3) Annual Income 4) Desired Retirement Age 5) Do you have a structured retirement program in place? If so, what kind? If not, why not? 6) Do you think you will have enough money to live your retirement age comfortably? 7) In your opinion, when is the best time to start planning for retirement? 8) In your opinion, what is the best investment for retirement? 9) In your opinion, why do you think Filipinos are not too interested in retirement planning? 10) Do you think it is a good idea to talk to a professional to help you with retirement planning? The ages ranged from 21 to about 50 but the average age was between 30 and 35. Interestingly, there were more males who responded than females. Average income was also diverse, from minimum wage earners up to millionaires. For the other questions, the answers were very similar. Most of the respondents prefer to retire earlier that the usual 60 or 65 years old. Average target retirement age was about 50 years old. It seems many do not see themselves working very long and would like to get out of the rat race earlier than most. Here’s a disturbing revelation: while majority wanted to retire early, many of them do not have any retirement program in place. It makes you wonder how serious they are in wanting to retire early – it might just by wishful thinking for most of them. For question 6, most agree that they may not have enough money to retire comfortably. As for when’s the best time to start planning, they were unanimous in stating “the earlier,
September - October 2008
MoneySense
the better” principle applies – from the time one earns income or at least when one hits 30 years old. For the best investment for retirement, the top three answers were real estate, time deposits, and savings. There were very few respondents who mentioned more sophisticated instruments like life insurance, mutual funds, unit investment trust funds, stocks, bonds, or structured notes. Ironically, quite a number of respondents came from the financial services
industry. If our respondents are an indication of the average middle class Filipino, you can surmise that we remain to be largely unsophisticated when it comes to investments. It is no wonder our capital markets are still highly undeveloped with most of the funds invested in short term savings and time deposits. When asked why they think Filipi-
nos do not take retirement planning seriously, respondents talked about immediate gratification, mañana habit, lack of funds, low income, increasing expenses, wrong priorities, short-term thinking, lack of knowledge, etc. Here’s an interesting explanation from one respondent: “Filipinos are not too keen on preparing for their retirement maybe because of what we call the extended family. Further, most parents are too busy preparing for their children’s future and they tend to forget to prepare for their old age. They will simple say, if I can provide a good future for my children they will look after me during my old age.” This has been referred by some as “Filipino retirement planning,” and this mentality is something that needs to be reconsidered. With regard to consulting with a professional, nearly all respondents thought it was a good idea. At least they acknowledge they will need help in this important area. This survey is a good reminder for all of us to take retirement planning more seriously. The Bible actually talks about preparing for the future – many refer to it as the Storehouse Principle. Come to think of it, retirement planning is just like filling our storehouses. Let us be consistent in filling up our storehouses so that when the time comes, we will have enough supply for our needs. Retirement planning is no different – we must be faithful in allocating for our retirement so when we do retire, we will have more than enough. Just as God blesses the storehouses in biblical times, God will bless our financial plans as well. Remember though, if one does not have a storehouse (or a retirement program in this case), what will God bless then? BY J. RANDELL TIONGSON, RFP® www.moneysense.com.ph
Easy Money
invest
Mutual Funds or Individual Stocks? Beth Tan invests her own money
through stocks and mutual funds. When asked whether one should invest in mutual funds or directly in the stock market, she replies, “The stock market is riskier so it depends on your appetite for risk. There are mutual funds that balance stock market investment with fixed income securities.” What about you? Which is a better route for your investments? Here are four factors to consider:
1
Involvement. The decision to invest in mutual funds or go directly in the stock market will depend on how much personal involvement you want in terms of time and effort. If you like to watch the stock market, do research, get high on technical analysis, and you actually have a lot of time in your hands, then turn your passion into an income-generating activity. However, even if you think you know all about the stock market but your day job, leisure activities, and family time won’t allow you to do your own stock picking, you’re better off investing in mutual funds.
2
Investing Experience. If your eyes glaze and you get a headache from reading financial statements and stock charts, better to have a professional do it. Investing your money in a mutual fund is like entrusting your hard earned cash to an expert, that is, if you have done your due diligence in finding the best. For those with limited financial experience, mutual fund investing through a reputable institution could be a safer option than stock market trading.
3
Appetite for Risk. The major draw of mutual funds is that you get instant diversification since they invest in various securities, something that you can’t do easily with individual stocks unless you have a significant amount to invest. If you are more diversified, then you ought to have lower risk, since the ups and downs in stock prices across numerous stocks cancel out. Of course, www.moneysense.com.ph
some say that means lower returns than focusing on a few great stocks, if you really know what you’re doing. Besides, there is no such thing as complete security in mutual fund investing because your investment is not guaranteed and the value can fluctuate widely (remember May 2007?). Then again, if you don’t know stocks well but would like to get into the stock market, mutual funds remain the less risky route.
4
Potential for Return. Some investors choose to go straight to the stock market because the potential returns are greater, especially if you know how to pick the right stocks. With online trading, you get to see the value of your portfolio in real time including the fees involved and other details. Online stock trading has become easier for the average investor. For example, Juanis Barredo, Vice President of Citiseconline.com, takes the time to introduce the concepts of stock mar-
ket trading to the newbie investor by conducting free half-day seminars for interested participants. With a minimum of P25,000, you can trade online and gain access to CitisecOnline’s research tools and resources. And with what seems like discounted stock prices currently selling in the market, there has never been a better time to explore this online investment tool. The downside to stock market trading is that you are your own fund manager and if you do not know what you are doing, you can lose money big time. There are many theories about when is the best time to buy or sell that a new investor can get quite confused with all the technical stuff. Therefore, the best armor to mitigate risk would be to educate yourself about the rules of the game (there are actually many ways to play the game). It is also a good idea to start small so that you can learn from your mistakes without breaking your piggy bank. BY MA. ESTHER SALCEDO-POSADAS MoneySense
September - October 2008
5 Tips for When Your Back is Against the Wall highest the country has experiTenced12.2%in 17p.a.,years.theWith inflation rate that high, conhe inflation rate for July 2008 was reported at
sumers will definitely go through rough times. Even before the inflation number was reported, telltale signs were already present like gasoline pump prices reaching over P60/liter, commercial rice hitting as high as P50/kilo, dressed chicken at the wet market hovering at P150/kilo and many others. But in times like these, is the average consumer already doomed? Is his future already bleak? I am reminded of a quotation lifted liberally from that instant movie classic, “Kung Fu Panda” (and yes I still watch cartoons): “The past is history. The future is mystery. Today is a gift. That’s why they call it the present.” I have always believed that we are not thrown challenges we are not equipped to handle. I myself have gone through some very tough times. And yet, I have managed to survive and come out stronger each and every time. So in the spirit of this optimism, I offer five tips on handling financial situations when your back is seemingly against the wall. Mind you, this is not a comprehensive list of tips.
1. Take a deep breath and smile I have written about this before. Smile, not so much as to deny the existence of a problem, but more to conjure up the strength and resolve to attack it. In medical terms, smile with your zygomatic major (mouth) and orbicularis oculi (eye) muscles. Smiling allows us to calm our emotions and think clearer. And smile with your whole being. This profuse smile, especially when bundled with laughter, will help produce endorphins, the body’s muscle relaxant, and will put you in the proper physical and mental disposition to tackle your financial situation. Not smiling fully has a direct correlation with your emotions. Did you know that Mona Lisa was found by the University of Amsterdam, through their breakthrough emotion recognition software, to have been only 83% happy while being 9% disgusted, 6% fearful and 2% angry? This was because she was not smiling fully! 2. Assess your situation Look at your finances as
an entrepreneur would his business. All you need is a simple income statement. There can only be two major causes for your financial stress: either there is too little income or there are too many expenses. If you need help, there is a new breed of trained financial planners holding the title of RFP (Registered Financial Planner). They can help you assess your financial situation.
3. Cut costs In terms of expenses, see if they are
due to discretionary or non-discretionary spending. If they are due to discretionary spending, then the obvious thing to do is to cut back. If they are due to non-discretionary spending (like loan repayments or children’s tuition), then see if you could restructure such expenses by negotiating to pay off such expenses over a longer period of time. Longer-term refinancing is an option provided the terms are better for you. However, we can never zero out our expenses. This is why you should consider the next tip.
4. Boost income The better way to solve your financial problem is to boost your income by finding a better or second job or going into a sideline business. Just remember not to kill the goose that lays the golden egg, which is your current job. 5. Save Each family should have an emergency fund, the amount of which should be equivalent to anywhere from three to six months of expenses. This is the fund that you will rely on for major emergencies including financial stress. Put the fund in an earning but liquid instrument like a time deposit, money market mutual fund or UITF. And save a fixed amount, come hell or high water. This is why the formula for a balanced budget, as financial planners point out, should be income less fixed savings equals expenses. Savings should be prioritized. As a final word, surround yourself with people who are also keen on keeping their finances balanced. If you can’t join a group physically, you can join an e-group. There are lots of them on the Internet. If you want one that tackles personal finance topics in the Philippine setting, try joining my Web site at www.income-tacts.com.
Efren Ll. Cruz is a registered financial planner with the RFPI USA. He is author of the bestselling books, Pwede Na! The Complete Pinoy Guide to Personal Finance and Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning. He is also Chairman and CEO of his own company, Personal Finance Advisers Philippines Corporation. Questions about the article may be e-mailed to cruise@skydsl.com.ph or efren7962@yahoo.com. Efren may be reached at the same e-mail addresses for the scheduling of consultations and personal finance seminars. This article does not constitute nor forms part of any offer or solicitation of an offer to buy or sell any securities. The opinions expressed in this article are the writer’s own and should not in any way be attributed to Personal Finance Advisers Philippines Corporation.
September - October 2008
MoneySense
www.moneysense.com.ph
My Money Story
My Virtual Office
An online entrepreneur shares his success working at home with the world as his market By Oliver Kuy as told to Excel V. Dyquiangco but when you are involved in a home technolIogylimited set-up, just like I am, the rate of speed and flexibility n a corporate structure, time and effort is actually
is much better since I am working within the confines of a familiar zone. Besides, going virtual allows me not only to respond to the needs of the client much faster but with this type of work, I can also choose the life that I want. When Kuydigital Design Consultancy first started to gain ground more than six years ago, it was actually both a very rewarding and convenient experience for me. It was rewarding in the sense that I had very low overhead expenses and convenient, because I can work anywhere and anytime I want. I actually started my online business with a mission, and that is to provide companies and individuals through effective and innovative multimedia. One of my sterling goals is just to provide clients with the most innovative and pioneering way of expressing their ideas in print (advertising, editorial, or packaging) and interactive media (Web or e-learning). And since I just spend most of my time working at home – the most, I leave the house at least three times a week for meetings with clients – I also need to get as much inspiration as possible. However, that is not likely to happen when you are just in the confines of your home. So what I do is that I also have to travel a lot – be it within the country or outside – and be exposed to several cultures and then come up with new ideas. That is why I need to be mobile and I need to be connected all the time.
September - October 2008 www.moneysense.com.ph
MoneySense
The path to digital design
The road to digital design, especially when it’s your own company, hasn’t been fairly easy at first. I took up industrial design back in college but I never got to practice it in a corporate setting. So, I just decided to put up my own virtual business, so to speak, being the president and creative director for Kuydigital Design Consultancy. I started with just a few equipment – a high-end computer, a printer, and licensed software. My investment for the business was roughly around P60,000. When I first started out, just like any other company or
MoneySense
www.moneysense.com.ph September - October 2008
How do the ultra-rich go from “mere� multi-millionaires to billionaires? A closer analysis of the 40 richest Filipinos provides eight answers 10 September - October 2008 10 September - October 2008
MoneySense MoneySense
www.moneysense.com.ph www.moneysense.com.ph
Wealth By Carlos Gonzales
&
Philanthropy
Let me tell you about the very rich. They are different from you and me. – F. Scott Fitzgerald in “The Rich Boy”
W millions? Having tens of millions is more like it. Hundreds of millions is already mind-boggling. But
hat is a million pesos nowadays? Or even a few
a billion pesos? Let alone P92,000,000,000? Our brains somehow refuse to grasp the possibility. Jaime Zobel de Ayala and his family are worth exactly that. According to Forbes Asia’s “The Philippines 40 Richest” list for 2007, four Filipinos have reached billion dollar status. Aside from the Zobels are Henry Sy, Lucio Tan, and newly minted billionaire Andrew Tan. In Philippine peso terms, all 40 are billionaires. Most of the names on the list are familiar. That’s because they are the same families that have ruled the Philippine economy for decades. However, there are a few new faces that neither belong to the old rich nor are considered political cronies. And somehow, that should put billionaire status within the realm of possibility for those of you who harbor such ambition. So how did these billionaires become so rich? Is it because of race? After all, almost half are pure Chinese, with at least five being first generation Chinese immigrants from Fujian (where most of our taipans coincidentally come from). Around 15% are Spanish (most of them Basque). Sure, many Filipinos are mixed, if you think of it, so it’s hard to pinpoint anyone on the list who is Filipino of pure Malay blood. Is it political connections? A good number of these billionaires are known Marcos cronies, or at least have benefited one way or another from that regime. And many are close to a previous and/or the current administration. Maybe it’s because they were born rich in the first place. At least half of those on the list came from wealthy families and a bigger proportion were already relatively rich when they hit the bigger jackpot. Just seven can be easily identified as true rags-to-riches stories. Perhaps we are being too cynical. Could it be plain hard work and sheer luck? We went through the list, digging into the details of how they struck it rich. A few are actually mysterious, with little information written about them. For the most part, however, we were able to find common threads of how they became billionaires. They are not secrets in the sense of the unknown but in the sense that we mere mortals just don’t apply them. Whether you want to be on the Forbes list someday or just dream of living in Forbes Park (no mean feat after all), you can learn a thing or two from these billionaires. (And may we add, try to pick the better lessons.)
No. 1: They control their business
There is not a single billionaire on the list who is an employed corporate executive or a self-employed professional. Certainly, they do hold executive positions and some are doctors (Dr. Rolando Hortaleza), lawyers (Felipe Gozon, Manuel Zamora), engineers (David Consunji, Magdaleno Albarracin Jr.), and CPAs (Manuel
www.moneysense.com.ph
Villar, Alfonso Yuchengco, Menardo Jimenez). But all own their companies. They became billionaires not by practicing their profession, but by starting their own business. Around 12 inherited the family business (Jaime Zobel de Ayala, Vivian Que Azcona, Iñigo Zobel, Enrique Aboitiz, Alfonso Yuchengco, Gilberto Duavit Jr., Wilfred Steven Uytengsu, Lourdes Montelibano, etc.). But about two-thirds are entirely self-made, including those who, while coming from well-off families, built their empire themselves. It’s the same ratio for the Forbes 400, the list of the richest people in the world. Only a handful of the family holding or flagship companies are private; majority of them are publicly listed (of course, many hold other, usually smaller, companies that remain private). Nevertheless, these billionaires control the majority or at least significant shares of their companies.
No. 2: They have a core cash cow
One distinct strategy of billionaires is they look for that one core cash cow (or two). That’s the kind of money that will fill their coffers come hell or high water. For some, it’s commodities like sugar (Antonio Roxas), nickel (the Zamoras), or cement (the group of Ramon del Rosario). For others, it’s key infrastructure like power (Oscar Lopez), ports (Enrique Razon Jr.), transportation (Enrique Aboitiz), and telecommunications (Manuel Pangilinan). Then there are those cash cows from consumer goods, like food (Tony Tan Caktiong, John Gokongwei Jr., Betty Ang), milk (Wilfred Steven Uytengsu), medicines (Vivian Que Azcona, Beatrice Campos, Mariano Tan), personal care (Dr. Rolando Hortaleza), and socalled sin products (Lucio Tan, Eduardo Cojuangco Jr.) The rest are heavy on financial services (George Ty, Alfonso Yuchengco, Frederick Dy, Jesus Tambunting), real estate (Jaime Zobel de Ayala, Henry Sy, Andrew Tan, Manuel Villar, Andrew Gotianun, David Consunji), and media (Emilio Yap, Gilberto Duavit Jr., Menardo Jimenez, Felipe Gozon, Marixi Prieto). It’s this core cash cow that fuels their growth and diversification into other industries. This also allows them to take riskier bets, knowing that they can afford a loser here and there as long as the money keeps coming from their cash cow. Why are these cash cows? They generate a lot of money for different reasons. Some are basic goods that everyone consumes like electricity, water, transportation, and telecommunications. Others are purchased by masses of people, like sugar, milk, medicines, and noodles or in bulk by industries, such as cement, nickel, and shipping. In other words, households and companies buy more commodities than other types of products. Burgers and skin-whitening lotions are more of the exception than the rule. Banks, insurance companies, and real estate are
MoneySense
September - October 2008
11
Te
The Bottom Line widely used insurance is also one of the most misunderstood, if not unknown. Tort, although civil in nature, can become very costly for a business or an individual.
What’s liability insurance?
Just what exactly is liability insurance? Is liability insurance created for the protection of the business or created for the protection of the public? What sort of liabilities does this insurance cover? Is it compulsory or not? These are some of the basic questions we have to answer to understand the concept of liability insurance. It is unfortunate that we often disregard things, items, and persons that are utterly important to us, e.g. (in the order of most forgotten or neglected), God, prayers, spouse, and our insurance policy. We remember them only when the situation calls for it. When we talk about liability, we talk about legal claims of third persons for bodily injuries and or property damage. The most common and familiar probably is TPL (third party liability) for car insurance. Does this sum up about everything we need to know about liability insurance? Well, I hope not. CTPL for car insurance has its own specific provisions under the insurance code.
Liability Insurance 101 You or your company got sued? Don’t let your personal assets be wiped out. Here’s a quick primer on this much misunderstood type of insurance By J. Randell Tiongson, RFP® companies get sued all the time. Take the case B igof Sulpicio Lines with the MV Princess of the Stars
disaster. Imagine the cost of paying all the claims filed against that company. Without liability insurance, can you imagine how Sulpicio can ever recover from this unfortunate mishap? If you think you or your small business is immune from legal claims, think again. Common folks are often confused or worse, disinterested in understanding the different kinds of insurance products. One of the most 12 September--October October 2008 2008 MoneySense 12 12 September September - October 2008 MoneySense MoneySense
www.moneysense.com.ph www.moneysense.com.ph www.moneysense.com.ph
Wealth Management
The Bottom Line
Advice for the Wealthy If you have the money but not the time or expertise to manage it, turn to a wealth manager By Tina Arceo-Dumlao
O money, thanks to access to all kinds of information and advice to guide
ne reason why the rich get richer is that they know what to do with their
their financial decisions. They pick the brains of consultants, exchange notes with colleagues, surf the Internet or watch business news to keep abreast of the volatile movements in the financial markets.
www.moneysense.com.ph www.moneysense.com.ph www.moneysense.com.ph
MoneySense September--October October 2008 2008 13 13 MoneySense MoneySense September September - October 2008 13
Smart Spender
Eating It Up! A field guide to hotel buffets By Amabella Jimenez can forgo traveling or watching movD ies. But Filipinos can never forgo their uring an economic crunch, people
love for eating. And when the game is on, there’s no other arena to play but hotel buffets! But why would you want to spend top peso for a lunch you didn’t enjoy? In this consumer guide, we reviewed six hotel buffets in terms of selection, taste, and value for money. It’s a tough job but someone’s got to do it.
BASIX
Dusit Thani Manila If you haven’t dropped by the new and improved Dusit Thani Manila, you’re missing quite a lot. The renovated interiors of the former Dusit Hotel Nikko are impressive. The main restaurant, located at the lobby, is called Basix, positioned as an all-day dining restaurant. If you’re looking for variety but don’t want to be overwhelmed with a dizzying array of choices, this is a good choice. You can find the regular comfort buffet offerings such as smoked salmon, sushi, and meat carvings (we love the rib-eye!), but turn a corner and you’ll be delighted with small surprises such as tom yum, pineapple bread, among others. The best surprise – the roast duck is served a la peking duck style (skin and meat sliced thinly, then wrapped in crepe along with spring onions and hoisin). There’s nothing basic about Basix. True to being an international buffet, it serves Western and Asian dishes. But there is also the addition of Arabic dishes (taboulle, tatsiki) as well as halal food. The dishes are tasty and flavorful. If you like spice, Basix doesn’t disappoint, as it offered a good number of hottasting dishes (the chili for the dimsum can set your tongue on fire!). The experience is further heightened with its modern interiors. The price is actually quite reasonable. And on weekends, for just P300 more, it’s all-you-can-eat at all their five specialty restaurants (you have to check out the beautifully designed Umu). It is definitely a steal! HITS • Lots of live stations • Offers great, spicy dishes • Wide selection of raw food (lamb, beef, pork, chicken, prawns, oysters, mussels, squid, salmon, and tuna) for grilling • Wide variety of pastries from the different mousses, panna cota to native fare such as bibingka, halo-halo. Plus yummy homemade ice cream • Very reasonable price • Hotel-wide, all-inclusive weekend buffets
14
14 September - October MoneySense September - October 2008 2008 MoneySense
MISSES • Live cooking was not consistent. Lamb was cooked perfectly the first time but not the second time around; mussels were baked with too much garlic • The tom yum soup was a little bit sweet than expected, considering this is a Thai-owned hotel BEST: Spicy dishes PRICE: P1,150 nett weekdays/P1,450 nett weekends inclusive of buffet at their Japanese, Thai, and Italian restaurants) CONTACT: Lobby Level, Dusit Thani, Ayala Center, Makati City | 8673333 ext. 3346 | www.dusit.com/en/hotels/philippines/ manila/dusit_thani/restaurants/basix.html www.moneysense.com.ph www.moneysense.com.ph
Smart Spender
business travel
Insider Tips for Business Travelers Get savvy advice from getting a free upgrade to business class to staying productive By Heinz Bulos
F when it comes to travel. Whether you’re a newbie or even
requent business flyers are some of the savviest bunch
just an occasional tourist, you can learn a thing or two to save money and get the most out of your trip:
BOOKING FLIGHTS
1. Get cheap fares Never pay full fare for your airline ticket. Airlines practice dynamic pricing – fares change depending on many factors such as number of empty seats, day of the week, time of day, when you book, etc. And of course, different airlines charge different rates. WHERE You need to do two things. One is to compare fares online by checking out the Web sites of airlines that have routes to your destination. You will surely find wide discrepancies across competing airlines. Of course, low-cost carriers offer better deals but may not fly to your destination. But the Internet is not always the cheapest place to buy a ticket. So the second thing to do is call a travel agent – whether it’s your company’s accredited agency or, if you’re booking your trip yourself, one of the handful that you should shortlist. Often, the bigger players get access to special deals and volume discounts not available online. “I usually call travel agents but I also search the Web,” shares Karen Batungbacal. www.moneysense.com.ph
As president of the Philippine operations of the global BPO firm ICT Group, Karen is a veteran business traveler who already knows a lot of the ins and outs of traveling. WHEN Fares vary also depending on the day and time. Jojo Uligan, executive director of the Contact Center Association of the Philippines, travels worldwide for trade missions and conferences. He says, “Check several travel agents and dates of your travel. Sometimes depending on your travel dates, tickets are a bit cheaper. Better to have a flexible date of travel to save some dollars unless you need to leave on a certain day. You may want to check online as well for some promos of several airlines.” Don’t book a flight on a weekend, which is the day favored by business travelers and tourists alike. Experts say for the best fares, book your flight on a Wednesday, though no one can explain thoroughly why. As for the time, the earliest and latest flights are often the cheapest, since they’re the most inconvenient and therefore least preferred. However, try not to get the last flight as you might end up spending the night in the airport if your flight is cancelled (get the earliest or second to the last flight instead). The other time factor is how advanced or late you should book. Some say book as far in advance as possible. Many airlines offer lower fares for flights if you book 21 days in advance. Other experts believe book at the last minute and take advantage of empty seats during an unpopular day, MoneySense September - October MoneySense September - October 2008 2008 15
15