1.  Choose a bank that has been stable for decades.

Banco Filipino has been closed before, in 1985, and stayed closed until 1992, so it’s a wonder there were still many who trusted the bank and who still deposited more than 500,000 pesos — the PDIC insurance limit.

2.  Choose a bank that has strong backing — meaning the owners have other big and reliable businesses and have strong standing in the business community.

This is not an endorsement of BDO, but when BDO lost 1.3 billion pesos in the third quarter of 2008 due largely to its investments in failed Lehman Brothers, BDO survived and grew even faster. Why? It had financial strength, both within the firm and in the business sector. The other Lehman-exposed banks, Metrobank and RCBC, also survived because they had financial strength and backing.

We can also see that people, particularly big depositors, trusted these banks as there was no bank run even when the Lehman collapse and its link with local banks was exposed by the media.

3.  Spread out your deposits to different banks.

The PDIC insures deposits for only up to 500,000 pesos, so limit your savings and time deposits in one bank to 500K.

Breaking your savings and time deposits into several accounts under your name in the same bank or in different branches of the same bank will not work.

According to PDIC, in case of a bank closure, it will count savings accounts, checking accounts and time deposits under the same name in the main branch and in the branches as ONE account. If the total of these accounts exceeds 500K, you will be paid only 500K.  You’ll get the rest after a time and only if there is still money left to be distributed.

Of course, if after your own due diligence, you’re 100% sure about the stability of your bank, you can deposit more than the 500K limit.

4.   See balance sheets/financial reports on the Bangko Sentral ng Pilipinas website from time to time.

These reports can give a sign of possible problems. You don’t have to study the balance sheets. I-check mo lang kung nag-submit siya.  You just check if your bank has submitted its financial report for the latest quarter when all other banks have submitted their reports.

Looking at the list of the top savings banks based on number of branches that I posted last January, I saw my note which says that Banco Filipino has no asset report for the quarter ended June 2010.

As I write this, I looked again at the BSP reports and I found out that since the first quarter of 2008 — the oldest report on the BSP page — Banco Filipino has not been submitting a report.

5.   Scan the business pages of newspapers from time to time.  Or Google your bank from time to time.

I googled Banco Filipino, and it’s a revelation that just last December 2010, the Manila Bulletin website mb.com.ph published an article about Banco Filipino expecting a financial relief package of 25 billion pesos.

6.  Lastly, choose a bank that has no fight with the BSP.

Related Articles:

Maximum Bank Deposit Insurance Increased to 500,000 Pesos
List of Banks in the Philippines — Universal Banks, Commercial Banks
BPI, BDO, or Metrobank Fees — Why Keep Paying Them?
Savings Accounts in the Philippines with the Lowest Maintaining Balances
Best Savings Accounts for Students in the Philippines

• Bank-owned remittance services like BDO Remit or BPI Expres Remittance
• Internet banking
• Non-bank remittance services like Western, Xoom, Moneygram
• Bank wire transfer
• Post-dated checks
• Payment processors like Paypal

Typically, you choose a remittance service or method depending on:

• Reliability – Mapagkakatiwalaan ba?
• Speed of remittance – Kailan darating sa pamilya?
• Exchange rate – Magkano sa peso?
• Accessibility of sender to remittance office – Malapit ba ang office kung saan magpapadala?
• Accessibility of receiver to where remittance is given – Malapit ba ang pamilya  sa bangko, service o sa ATM na daratnan ng remittance?
• Remittance fee – Mahal ba ang pagpadala?

One of the ways to send money to the Philippines is through BDO Remit.

BDO Remit is a remittance service available in almost all countries where there are OFWs and  Filipino immigrants. You can load the equivalent of up to 100,00 pesos to the BDO Remit Cash Card of your family.  Where you are, look for:

• BDO Remit subsidiary offices
• BDO Remit representative offices
• BDO Remit remittance agents
• BDO Remit remittance partners

You can choose how your remittance through BDO Remit can reach your family:

• Through a BDO account, such as BDO Remit account, BDO Kabayan Savings account, or a regular savings account (can be withdrawn anywhere there’s a BDO ATM or affiliated ATM)
• Door-to-door delivery
• Deposit of money to family’s account in another local bank
• Cash pick-up at BDO branches, SM department stores,  Savemore, affiliated rural banks

How much is the remittance fee?

The fees vary depending on the country of origin, the type of delivery and whether the money is received in pesos or U.S. dollars.  If in dollars, the fees vary depending on the amount.  Dollar deposits and delivery are offered only in Metro Manila.

Fees for remittances from California:

Deposit to a BDO account -  US$8
Deposit to another local bank – US$12 (Metro Manila), US$14 (Province)
Cash Door to Door – US$12 (Metro Manila), US$14 (Province)
Pick-up – US$12 (Metro Manila or Province)

Fees for Remittances from Italy:
Credited to a BDO account: 8 Eur or $8, 10 Eur or $10
Credited to other local banks or door-to-door: 10 Eur or $10
Cash Pick-Up Anywhere:  8.50 Eur or $8.50

Fees for Remittances from Hong Kong:
Credit to a BDO Account:  HK$ 20 for peso account, HK$28 for dollar account
Credit to another other Local Bank:  HK$ 30 for peso and dollar accounts
Cash Door-to-Door: HK$ 30 Metro Manila, HK$ 40 for provinces (peso only in provinces)
Cash Pick-up Anywhere: HK$ 20 for remittance in pesos or in dollars

How fast can the family receive the remittance? (From California, Italy, or Hong Kong)

• For deposits to BDO accounts -  within 1 hour
• Deposits to other local banks – within 1 to 2 days if in pesos, within 3 to 4 days if in dollars
• Door to door – within 1 to 2 days in Metro Manila, within 1 to 3 days in major cities, within 4 to 7 days in other areas
• Cash pick-up – within 1 hour

You can open a BDO Remit account abroad:

1. Go to a BDO Remit subsidiary, partner or agent located in your city.
2. Fill up a BDO Remit Cash Card Application Form.
3. Pay the BDO Remit cash card fee.
4. BDO will deliver the the ATM to your family.

Or a member of your family in the Philippines can open his/her own BDO Remit Cash Card account and then email you the account number.

You can check online the status of your remittance through BDO Remit Status Inquiry.  Just fill in your Reference Number, including any alphabet letter or special character provided by the remittance office, partner or agent.

What is a BDO Rewards Card?

You can also earn points that you can use for shopping through a BDO Rewards Card. You can request for this card at your branch or at any BDO Remit office abroad. Just fill out a BDO Rewards Customer Information Update Form.  The card will be delivered to your mailing address. You’ll earn points as you remit money, make deposits and pay bills using BDO services.

There are BDO Remit Subsidiary Offices in:
Germany
HongKong
Italy
Macau

The addresses of BDO remittance offices, partners, representatives and agents can be seen on the BDO website.

There are BDO Remit Representatives in:
France
Israel
Taiwan

There are BDO Remittance Partners in:
Australia / Bahrain/ Belgium / Brunei / Canada / England (Great Britain or UK) / Greece / Guam / Hongkong / Ireland / Israel / Jordan / Kuwait / Lebanon / New Zealand / Norway / Oman / Malaysia / Mexico / Papua New Guinea / Qatar / Saudi Arabia / Singapore / Spain / Switzerland / Taiwan / United Arab Emirates / U.S.A. /

There are Remittance Agents in:

HongKong
California and other U.S. cities

Related Articles:
BDO Kabayan Savings, BDO Remit Cash Card for OFWs
BPI and BDO Internet Banking — Free and Quick Ways to Send Your Children’s Allowance
BDO Correspondent Banks for Sending Money to the Philippines
Cheap Ways to Send Money to Your Loved Ones Within the Philippines

• you cannot pay the total amount due each month
• you can only pay the minimum due
• and you may have to be late some of the time,

then do not get credit cards that have high late-penalty fees and that are strict on payment dates.

NOT RECOMMENDED:

HSBC — charges 600 pesos for every month that you are late even by just an hour or a day.

If you call them and explain your situation, your 600 may be reversed only once in every 6 months, and that depends on your reasoning and the mood of the bank representative at the time you are calling.

Next month, I’ll be receiving some money  (Thank you, Lord!),  and this HSBC card will be the first I will pay off fully and say goodbye to forever.  Good riddance!  Wow, how nice it would be to cut my HSBC card!

I was late in paying after the Ondoy floods, but the HSBC never heard my explanation.  No soul!  Only business for them.

STANDARD CHARTERED — also charges 600 pesos for every late payment… even by just an hour.  Remember, the date changes at midnight?  Or maybe the cutoff hour is every 6 am?  So, after midnight or after 6 am, and your payment is not there, the 600 pesos is charged, presto!

How do I know?  I have both of them.

HIGHLY RECOMMENDED

Fortunately, there are credit cards in the Philippines that have retained some bits of kindness,
and I’m glad that the local banks  (although they have foreign shareholders) are the leaders.

Aside from forgiving late payments, they also charge lower fees.

BPI EXPRESS CREDIT has been very kind to me in terms of late payments. As long as my payment-due doesn’t remain unpaid until the next statement date, I don’t get charge a late-penalty fee.

Kahit ma-late ako ng 5 days or 10 days! But, of course, I don’t abuse it. I oftentimes pay very early too. An I’ve been using this BPI credit card since March 2000.

And when a late-penalty is deserved — because the next statement date has passed and my due remained unpaid — eto yong times na may mga unexpected major expenses –
the penalty fee was only 6% of the total amount due.

One time I was late in paying 1,715.40 by 13 days (almost 2 weeks!).
And you know what?  My late payment was only 102.93!  Compare that to HSBC and Standard Chartered which charge cardholders 600 pesos for being late for only an hour or a day!

EASTWEST is also kind.  It forgives a few days of delinquency.  And the charge is only 200 pesos — when the next statement date has already passed.

BDO SHOP MORE charges 300 pesos or 5% of amount due, whichever is higher.

METROBANK charges 600 pesos or 7.5% of amount due, whichever is higher. This is one local bank that charges high, although this bank offers an annual-fee-free card and a low-interest Cash2Go loan.

Update as of March 2011:  Metrobank M Free Mastercard now charges 700 pesos for late payments.

BPI EXPRESS CREDIT charges 6% of the amount due for the month — no fixed fee, no whichever.

This rule considers the poorer ones like me — 6 percent of 1,000 is only 60 pesos, but when a rich credit card holder is late, the 6-percent fee for 100,000 is 6,000 pesos.  But, oh well, I’m not a gold cardholder; the late-penalty rules for gold credit cards could be different.

When charged a late penalty fee, call the bank.  Give a valid reason.  Oftentimes, they forgive, as long as you are not late often.

Related Articles:

Free from Credit Cards, At Last!

BPI, BDO, or Metrobank Fees — Why Keep Paying Them?

Paypal is an online payment system. It’s free for personal users and offered for a fee to businesses.

Three Kinds of Accounts

• Personal Account — for individuals who pay online
• Premier Account — for individuals who buy and sell online
• Business Account — for companies and organizations

Opening an account is free and easy.

Sending Money

Sending money through Paypal is free. You use your Mastercard, Visa and American Express cards or your US bank account.

Withdrawing Money

There is a fee of 50 pesos for withdrawing less than 7,000 pesos. If it’s 7,000 pesos or more, it’s free.

Your withdrawal is done using your account with your Philippine bank and it takes about 2 to 5 working days. So, before you make your withdrawal, you must first add your bank account details to your Paypal account. Just click Withdraw and then Withdraw funds to your bank account. You will be requested to enter your name, bank name, bank account number, and a 9-digit bank code. You can copy your bank code from the Philippine PayPal bank code list compiled by James of pinoymoneytalk.com.

Additional tips

1. Make sure the name in your Paypal account is exactly the same as the name on your bank account. There is a return fee of 250 pesos, if the transaction fails due to this error.
2. To make sure you are really on PayPal site, check 3 things:

• your URL has s on the https://www.paypal.com
• your URL has the PayPal icon, a blue-colored P, and the name Paypal, Inc. (US)
• at the right bottom corner, there should be www.paypal.com and an image of a lock
  

Company Background

PayPal, based on San Jose, California, was founded in 1998 and was bought by eBay in 2002. Currently, it has more than 153 million accounts in 190 countries and in 18 currencies around the world.

PayPal has also received numerous Internet industry awards, including the 2006 Webby People’s Voice Award for Best Financial Services Site and the 2006 Webby Award for Best Financial Services Site.

EastWest Bank is a subsidiary of Filinvest Development Corp. (FDC), one of the country’s top conglomerates. FDC owns Filinvest Alabang Inc. which is developing the 244-hectare Filinvest Corporate City in Alabang and Filinvest Land which operates the wildly succesful Festival SuperMall, Cyberzone Properties and Filinvest Asia. FDC also owns Pacific Sugar Holdings Corp. which runs three sugar companies.

The letter says that the acquisition will be completed in the second quarter of 2009 after the completion of regulatory approval.  EastWest has 80 branches across the country.

The letter also assures holders of AIG credit cards that the transition will be orderly and will not affect AIG credit card transactions.

EastWest Bank also announced this acquisition on its web site. It said that the purchase will increase EastWest’s number of branches to 89 units, 54 in Metro Manila and 35 in other cities. EastWest will  become the 6th credit card issuer in terms of number of credit cards in force and amount of card receivables.

How will this acquisition affect cardholders like me? I am curious about how they will handle AIG credit cards, which have higher interest rates. EastWest credit cards charge only 2.25% for gasoline, supermarket and drugstore purchases and 2.75% for others while AIG cards charge 3.5% for all kinds of purchases. Will EastWest leave AIG cards as a separate card brand or convert them to EastWest cards?