BSP Restricts Foreign Funds in SDA Investments

SDAs or Special Deposit Accounts are a favorite investment choice of relatively risk-averse people, Filipinos and foreigners alike, looking to park their money in safe, highly-liquid, but high interest-earning instruments.
Such benefits made special deposit accounts very attractive products, which paved the way for more than P1.658 trillion being parked in the central bank’s SDA facility as of June 15, 2012. How big is this amount? Well, this is almost the size of the Philippines’ 2012 budget of P1.816 trillion.
Such humongous amount of peso placements have both advantages and disadvantages.



What are SDAs?

SDAs are money instruments employed by the BSP as a tool to mop up excess liquidity in the market. Excess funds can lead to inflation and since the BSP’s primary mandate is to control inflation in the country, the agency utilizes several tools to help achieve this goal. Special Deposit Accounts (SDA) are one of these liquidity management tools.

To motivate retail and institutional investors to invest in SDAs, the BSP offers interest rates relatively higher than the rates offered by regular savings and time deposit accounts. Placements are also backed by the BSP, the agency in charge of printing the country’s currency, so there is very low risk of default.

Volatility in foreign exchange

Deposit terms are usually up to one month, meaning, the investor can already earn interest and pull out the placement after one month. This scenario, however, poses a risk to the Philippine’s foreign exchange market because wild swings in the inflows and outflows of currencies can produce volatility in the Peso-Dollar exchange rate.

The Philippine Peso has emerged as Southeast Asia’s fastest-rising currency during the first half of 2012. Partly to blame is the foreigners’ increased appetite for the Peso, dumping the US Dollar (and other foreign currencies) in the process.
Currency carry trade


Worse, some large, foreign institutional fund companies engage in currency carry trade which puts additional pressure to the Peso against the Dollar. Carry trade occurs when fund managers borrow currencies that pay low interest rate (such as the US Dollar or the Japanese Yen) and converts them into currencies paying high interest rates, as in the case of the Philippine Peso and the SDA offering.
Foreign funds flowing into the country contribute to an appreciating peso which may be good to some sectors but it also creates market instability when these funds turn out to be “hot money,” or funds that flow in and out of the country very quickly. Such erratic movement of funds produce, among others, a fluctuating exchange rate.

Resident vs. Non-resident aliens

This erratic currency flow is the reason why the BSP decided to restrict access to SDA placements only to citizens and residents of the Philippines. Non-resident aliens cannot anymore invest in SDAs. The BSP is now requiring banks and financial institutions to issue a notarized certification stating that ”none of the funds invested in the SDA have been sourced, directly or indirectly, from non-residents.”

A non-resident alien is defined as a person whose residence is not within the Philippines and who is also not a Filipino citizen.

If this person stays in the Philippines for less than 180 days, he or she is considered a non-resident alien not engaged in trade or business.

If he or she shall stay in the country for an aggregate period of more than 180 days during any calendar year, the person shall be deemed a non-resident alien doing business in the Philippines.

The BSP action to restrict access to SDA investments is a commendable move to protect the Philippine peso from disastrous foreign exchange fluctuations. We have seen how a spike in exchange rates can lead to weak competitiveness among our exporters and lost of currency value for our OFWs. Now that the country is becoming a hot spot for foreign investments, we should definitely welcome foreign funds but, at the same time, we must employ rules and restrictions that will ensure that our country is protected and not taken advantaged of.

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Complete List of Philippine Bank Codes for Paypal

If you are withdrawing PayPal to your bank account in the Philippines, you’re probably wondering what the “Bank Code” is.
If this is your first attempt to withdraw PayPal, you need to add a bank account to your PayPal account first. To do this, log in to PayPal, go to My Account > Profile > Add or Edit Bank Account then fill in the Bank Name, Account Number, and Bank Code.

What is the Bank Code? See below for the official list of Bank Codes for PayPal Philippines.



Official List of PayPal Philippines Bank Codes

Bank Name	Bank Code
ALLIED BANKING CORP	010320013
AUSTRALIA NEW ZEALAND	010700015
ASIA UNITED BANK	011020011
BANGKO SENTRAL NG PILIPINAS	010030015
BANGKOK BANK	010670019
BANK OF AMERICA	010120019
BANK OF CHINA	011140014
BANK OF TOKYO	010460012
BANCO DE ORO (& EQUITABLE PCI BANK)	010530667
BANK OF COMMERCE	010440016
BANK OF THE PHIL ISLANDS (BPI)	010040018
CHINA BANKING CORP	010100013
CHINA TRUST COMML BANK	010690015
CITIBANK N.A.	010070017
DEVT BANK OF THE PHILS (DBP)	010590018
DEUTSCHE BANK	010650013
EAST WEST BANK	010620014
EXPORT & INDUSTRY BANK	010860010
FUJI BANK	010640010
HONGKONG AND SHANGHAI BANK (HSBC)	010060014
INTL COMML BANK OF CHINA	010560019
INTL EXCHANGE BANK	010680012
JP MORGAN CHASE BANK	010720011
KOREA EXCHANGE BANK	010710018
INTL NEDERLAND BANK	010660016
LANDBANK OF THE PHILS	010350025
MAYBANK OF THE PHILS	010220016
METROPOLITAN BANK & TRUST CO	010269996
PHIL BANK OF COMMUNICATION	010110016
PHIL TRUST COMPANY	010090039
PHIL NATIONAL BANK (PNB)	010080010
PRUDENTIAL BANK	010150018
PHIL VETERANS BANK	010330016
RIZAL COMML BANKING CORP (RCBC)	010280014
SECURITY BANK & TRUST CO	010140015
STANDARD CHARTERED BANK	010050011
UNITED COCONUT PLANTERS BANK	010299995
UNION BANK OF THE PHILS (UBP)	010419995
UNITED OVERSEAS BANK	010270189

Philippine banks with Paypal bank codes: Allied Bank; Asia United Bank; BSP; Banco de Oro (BDO); Equitable PCIBank (same as BDO bank code); Bank of Commerce; Bank of the Philippine Islands (BPI); China Bank; China Trust; Citibank; Development Bank of the Philippines (DBP); Deutsche Bank; East-West Bank; Export Bank; Hong Kong and Shanghai Bank (HSBC); Landbank of the Philippines (Land Bank); Metropolitan Bank and Trust Co. (Metrobank); Philippine Bank of Communications (PBCom); Philtrust; Philippine National Bank (PNB); Prudential Bank; Veterans Bank; Rizal Commercial Banking Corporation (RCBC); Security Bank; Standard Chartered; United Coconut Planters Bank (UCPB); UnionBank of the Philippines (Unionbank); United Overseas Bank.

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Millennium Bank And Rural Bank Closed

Two separate rural banks in Cabanatuan City and Quezon Province were again ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) less than a month after a big commercial bank, ExportBank, declared a bank holiday due to liquidity problems.
On May 24, Millenium Bank of Cabanatuan City was ordered closed and placed under the receivership of the Philippine Deposit Insurance Corporation (PDIC) by virtue of MB Resolution No. 817.
A few days earlier, on May 17, the BSP placed Quezon-based rural bank New Rural Bank of Tagkawayan, Inc. under the receivership of the PDIC by virtue of MB Resolution No. 772.

Millennium Bank is a rural bank with only one branch located at Del Pilar St., Cabanatuan City, Nueva Ecija. Records show the bank had 1,451 accounts with total deposit liabilities of P37.52 million. The bank is owned by Philippine Indi. Commercial Enterprises (40%), Norberto Dela Merced (19.99%), and Ma. Victoria Cristina S. Abraham (18%). The bank’s chairman is Victoria Cristina Abraham and its President is Ma. Cristina Abraham.

New Rural Bank of Tagkawayan is headquartered in Lagdameo Boulevard, Tagkawayan, Quezon with seven (7) branches in Sariaya, Calauag, Candelaria, and Lucena City, all in Quezon Province and in San Juan and Rosario in Batangas. According to the BSP, the Bank had 14,099 accounts with total deposit liabilities of P363.44 million. The latest General Information Sheet filed by the New RB of Tagkawayan with the Securities and Exchange Commission shows that  bank is owned by Daniel De Gala (39.85%) and Anicia De Gala (39.85%), with the latter being the bank chairman and President.
The PDIC assures all valid deposits will be paid up to a maximum of P500,000 as per the PDIC mandate. Depositors with account balances below P10,000, with no outstanding obligations, and who have updated their addresses with the bank in the past year are not required to file claims. Refund checks will be sent to the depositor’s address starting July 2012. Those with deposit balances more than P10,000 must file deposit insurance claims.
Depositors may attend the Depositors Forum where BSP and PDIC representatives will explain and answer questions regarding deposit claims. The schedule of these forums will be posted in the premises of the closed banks.

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Salary and Compensation of Mark Zuckerberg and Facebook Executives

Facebook is expected to have its initial public offering (IPO) this week. In a matter of days, dozens of Facebook employees and executives will become instant billionaires and millionaires.
Take, for instance, Facebook founder and creator Mark Zuckerberg. Zuckerberg owns 28.1% of the company’s Class B shares, which entitles him to ten (10) voting rights per share as opposed to one (1) voting right for each Class A share. After the IPO, Zuckerberg’s ownership will be worth more than $28 billion. That would easily earn him a spot in the Top 10 list of the World’s Richest Persons.
In terms of compensation, however, Zuckerberg is surprisingly not the highest paid executive in Facebook, based on company documents submitted to the Securities and Exchange Commission in April 2012. That title goes to Chief Operating Officer (COO) Sheryl Sandberg, who received a total of almost $31 million in 2011 alone. That includes a base salary of $295,833 plus bonus of $170,508 and a huge stock award of $30.49 million.
Zuckerberg, in contrast, got a total of around $1.7 million in 2011. He  received a base salary of $483,333 plus bonus of $445,500. He also enjoyed other compensation amounting to $784,000 majority of which represented the cost of his and his friends’ use of the company-chartered aircraft.
Below is a summary of the salary and compensation received by top Facebook executives last year.

1. Mark Zuckerberg


Age: 27
Title: Chairman and Chief Executive Officer (CEO)
Total Compensation (2011): $1,712,362
Salary: $483,333
Bonus: $445,500
Other Compensation: $783,529
According to the SEC filings, Zuckerberg’s total 2011 compensation reflected the impact of his performance in “growing Facebook’s global user base and developing developer and commercial relationships… and the impact of his leadership and product vision, which contributed to the development and launch of new products, including Open Graph and Timeline.”

2. Sheryl Sandberg


Age: 42
Title: Chief Operating Officer (COO)
Total Compensation (2011): $30,957,954
Salary: $295,833
Bonus: $170,508
Stock Awards: $30,491,613
Sandberg is Facebook’s COO since March 2008. She worked at Google from November 2001 until March 2008, most recently as Vice President for Global Online Sales & Operations. Sandberg was also a former Chief of Staff of the U.S. Treasury Department and previously served as a consultant with McKinsey & Company and as an economist with The World Bank. She holds an A.B. in economics from Harvard University and an M.B.A. from Harvard Business School.
Her 2011 compensation “reflected her contribution to growing revenue, building commercial and developer relationships, growing the Facebook team and excellence in execution in all business-related matters… and reflected her leadership in growing revenue year over year and her strategic guidance on key policy issues both domestically and abroad.”

3. David Ebersman

Age: 42
Title: Chief Finance Officer (CFO)
Total Compensation (2011): $18,761,293
Salary: $295,833
Bonus: $170,508
Stock Awards: $18,294,952
Ebersman is Facebook’s CFO since September 2009. From March 2005 until April 2009, he served in various positions at biotechnology company Genentech, including as Chief Financial Officer and Executive Vice President. Ebersman holds an A.B. in economics and international relations from Brown University.
His 2011 compensation reflected “his contributions in completing [Facebook's] private placement financing, managing preparations for the initial public offering… and building a strong financial foundation for the business.”

4. Mike Schroepfer


Age: 37
Title: Vice President of Engineering
Total Compensation (2011): $24,804,472
Salary: $270,833
Bonus: $140,344
Stock Awards: $24,393,295
Schroepfer is Facebook’s Vice President of Engineering since September 2008. Prior to joining Facebook, he worked as Vice President of Engineering at Mozilla Corporation, an Internet company, from December 2005 to August 2008. He also served in various positions at Sun Microsystems, Inc. He co-founded CenterRun, Inc., a developer of application provisioning software, which was acquired by Sun Microsystems. Schroepfer got his B.S. and M.S. in computer science from Stanford University.
His 2011 compensation reflected his “contribution in developing and overseeing [Facebook's] engineering team, software development efforts, and engineering infrastructure… and his strong leadership of the engineering team, resulting in development of new products for users, developers, and advertisers.”

5. Theodore Ullyot


Age: 44
Title: Vice President, General Counsel and Secretary
Total Compensation (2011): $7,082,294
Salary: $270,833
Bonus: $602,500
Stock Awards: $6,098,317
Other Compensation: $110,644
Ullyot is Facebook’s Vice President, General Counsel, and Secretary since October 2008. He was a partner at law firm Kirkland & Ellis, LLP from May 2008 until October 2008. He also served as Executive Vice President and General Counsel of ESL Investments, Inc., a private investment firm, and worked as an associate general counsel at AOL Time Warner, Inc. and as a law clerk for U.S. Supreme Court Justice Antonin Scalia and for Judge Michael Luttig of the U.S. Court of Appeals for the Fourth Circuit. Ullyot completed his A.B. in History from Harvard University and a J.D. from the University of Chicago.
His 2011 compensation reflected “his role in certain key litigation and regulatory matters involving [Facebook].”

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Top 10 World’s Richest Persons – 2012

According to the 2012 list of the World’s Richest Persons published by Forbes Magazine, there are now 1,226 billionaires worlwide with a total net worth amounting to $4.6 trillion.
The monetary power of these billionaires is as large as the total Gross Domestic Product (GDP) of India, the world’s 2nd most populous nation which registered a 2011 GDP of $4.47 trillion. The combined net worth of the 1,226 billionaires is also way more than the combined GDPs of 127 poorest countries in the world.
The Forbes list is dominated by the same people, with three new ones entering the Top 10 this year.
Carlos Slim Helu of Mexico’s largest telecommunications company Telmex remains as the world’s richest man for the third straight year, despite a $5 billion drop in net worth from last year.
Microsoft’s Bill Gates is still No. 2 while Berkshire Hathaway’s Warren Buffet is unchanged at No. 3.
Stefan Persson of Sweden is this year’s 8th richest person, up five notches from No. 13 last year, thanks to continued expansion of apparel brand H&M which he heads.
Re-entering the Top 10 for the first time since 2004 is Asia’s richest person Li Ka-Shing, Chairman of Hutchison Whampoa, a Hong Kong-based conglomerate that runs Watson’s, the world’s largest chain of beauty and health stores, and operates a number of container terminals globally.
Wrapping up the Top 10 is Karl Albrecht of Germany, owner of Aldi Supermarkets, who was also No. 10 in 2010 but fell to No. 12 in the 2011 richest people list.

Top 10 World’s Richest Persons – 2012


#1. Carlos Slim Helu

Net Worth: $69 billion (down from $74 billion in 2010)
2010 Rank: #1
Age: 72
Fortune: Self made
Source: Telecom
Country of Citizenship: Mexico
Residence: Mexico City, Mexico
Industry: Communications
Marital Status: widowed, 6 children
Education: BA/BS, Universidad Nacional Autonoma de Mexico
Carlos Slim Helu retains the title of world’s richest man for the third year in a row despite a fortune that’s $5 billion smaller than a year ago-primarily ­because of a lower share price for telecom giant America Movil, which accounts for more than half his net worth. In April the company was fined $1 billion by Mexican regulators for monopolistic practices, but is appealing the decision. Slim is spending more time working with his Carlos Slim Foundation and the Telmex Foundation than he has in the past.

#2. William Gates III

Net Worth: $61 billion (up from $56 billion in 2010)
2010 Rank: #2
Age: 56
Fortune: Self made
Source: Microsoft
Country of Citizenship: United States
Residence: Medina, Washington, USA
Industry: Software
Marital Status: Married, 3 children
Education: Dropout, Harvard University
First part of mission accomplished: Bill Gates, the most generous person on the planet (he’s given away $28 billion already), has helped ­eradicate polio in India. In January the country announced its first polio-free year. Gates will continue to chip in $200 million a year to rid the world of a disease that is still endemic in Pakistan, Afghanistan and Nigeria. His Bill & Melinda Gates Foundation is also spearheading a malaria vaccine that is showing promise in ­clinical trials. Meanwhile the vaccine-spreading organization he founded, called GAVI, raised $4.3 billion in pledges aimed at distributing drugs to thwart the deadly infections that cause meningitis, pneumonia, and diarrhea in developing countries. He also has a new endeavor in the works: fixing agriculture. His foundation has committed more than $2 billion to small farmers. Less than one-fourth of his net worth is still held in Microsoft, whose shares are trading higher than they have been in 10 years; the rest is in private equity, bonds and stocks such as Ecolab and Mexican broadcaster Televisa.

#3. Warren Buffett

Net Worth: $44 billion (down from $50 billion in 2010)
2010 Rank: #3
Age: 81
Fortune: Self made
Source: Berkshire Hathaway
Country Of Citizenship: United States
Residence: Omaha, Nebraska, USA
Industry: Investments
Marital Status: widowed, remarried, 3 children
Education: MS, Columbia University; BA/BS, University of Nebraska Lincoln
Warren Buffett announced in February he’d finally made the decision about who will replace him, but he wouldn’t give a name. In December, he chose his farmer son, Howard, as the future non-executive chairman and “guardian of the firm’s values.” New Senate legislation requiring the rich to pay at least a 30% tax rate has been dubbed the “Buffett Rule” in homage to the billionaire’s frequent public statements that the wealthiest should pay more than the average Joe. His net worth is down $6 billion year on year because of a 7% slump in Berkshire’s stock. In his latest annual letter he confessed to some mistakes, including being “dead wrong” about a housing comeback.

#4. Bernard Arnault

Net Worth: $41 billion (no change from last year)
2010 Rank: #4
Age: 63
Fortune: Inherited and growing
Source: Louis Vuitton Moet Hennessy (LVMH)
Country of Citizenship: France
Residence:Paris, France
Marital Status: Married; five children
Education: BA/BS, Ecole Polytechnique de Lausanne
Bernard Arnault orchestrated another stellar year for his luxury-goods empire, LVMH. Profits jumped 22%, thanks to record sales at Louis Vuitton and the successful integration of Bulgari. The group formed a joint venture with one of the world’s leading tanneries of crocodile leather, Heng Long. Arnault hasn’t done as well with his more pedestrian investment in supermarket chain Carrefour, which is worth $1 billion less than it was a year ago. Among his personal high-end collection: He owns Indigo Island in the Bahamas (rent: $300,000 a week) and ski chalet Cheval Blanc in Courchevel.

#5. Amancio Ortega

Net Worth: $37.5 billion (up from $31 billion in 2010)
2010 Rank: #7
Age: 75
Fortune: Self-made
Source: Zara
Country of Citizenship: Spain
Residence: La Coruna, Spain
Marital Status: Married; three children
Ortega stepped down as chairman of his global fashion firm, Inditex, in July 2011. The company hasn’t missed a beat. Shares are up one-fourth in the past year, helping boost his fortune by $6.5 billion and pushing him into the global top 5 ranks for the first time. Ortega paid $536 million to billionaire Esther Koplowitz in December for Torre Picasso, a 43-story skyscraper in Madrid. He also owns Epic Residences & Hotel, a luxury 54-story waterfront condo and hotel development in Miami. Other personal holdings include a stake in a soccer league and a horse-jumping circuit. A railway worker’s son, he started as a gofer in a shirt store.

#6. Larry Ellison

Net Worth: $36 (down from $39.5 billion in 2010)
2010 Rank: #5
Age: 67
Fortune: Self-made
Source: Oracle
Country of Citizenship: United States
Residence: Woodside, California, USA
Marital Status: Thrice divorced, remarried; two children
Education: Dropout, University of Chicago; Dropout, University of Illinois at Urbana
Oracle’s stock has been oscillating for months. It’s rebounded since its August low but is still off 15% year on year due to a slowdown in the software and hardware giant’s sales, enough to knock $3.5 billion off Ellison’s fortune. Seeking to profit from cloud computing, Oracle acquired Taleo in February for $1.9 billion and RightNow in October for $1.5 billion. Ellison has been tagged as one of the clutch of billionaires interested in buying the Los Angeles Dodgers baseball team. His big sport is yachting: he won the America’s Cup in 2010 and is bringing the 34th edition of the America’s Cup Finals to the San Francisco Bay in 2013.

#7. Eike Batista

Net Worth: $30 billion (no change from last year)
2010 Rank: #8
Age: 55
Fortune: Self-made
Source: Mining, Oil
Country of Citizenship: Brazil
Residence: Rio de Janeiro, Brazil
Marital Status: Divorced, two children
Education: Dropout, RWTH Aachen University
Eike Batista, Brazil’s richest man, is riding high on oil fever. His oil and gas driller, OGX Petroleo e Gas, produced its first oil in a test well offshore in late January; his 61% stake in the company is worth $19.8 billion, two-thirds of his net worth. The bombastic entrepreneur is also betting on his former passion, gold: In February 2011 he spent $1.5 billion to take private Canadian-listed Ventana Gold, which owns what he says is an incredibly promising mine in Colombia.

#8. Stefan Persson

Net Worth: $26 billion (down from $24.5 billion in 2010)
2010 Rank: #13
Age: 64
Fortune: Inherited and growing
Source: H&M
Country of Citizenship: Sweden
Residence: Stockholm, Sweden
Marital Status: Married, three children
Education: Associate in Arts / Science, University of Stockholm
Stefan Persson’s cheap-chic ­apparel chain H&M added Versace and Marni to its stable of designers last year and opened its first stores in Croatia, Singapore and Romania. It now has 2,500 shops in 43 countries. Persson, who is chairman, bought 5 million additional shares of the company and then gifted 4 million, worth $150 million, to a new employee ­incentive program. Persson’s father, Erling, founded H&M in 1947; Stefan took over in 1982, he gave up the chief executive position in 1998; promoted son, Karl-Johan, 35, to chief executive in July 2009. Persson acquired the 21-cottage village of Linkenholt in Hampshire, England in 2009.

#9. Li Ka-shing

Net Worth: $25.5 billion (up from $22 billion in 2010)
2010 Rank: #11
Age: 83
Fortune: Diversified, self-made
Source: Hutchison Whampoa Limited
Country of Citizenship: Hong Kong
Residence: Hong Kong
Marital Status: Widow, two children
Education: Drop Out, High School
Li Ka-shing moves back into the top 10 for the first time since 2007. He is Asia’s richest person for the first time since 2004, despite a $500 million drop in net worth. One of the great empire builders, Li’s businesses employ 270,000 ­people around the world in 53 countries; he built one out of every 7 residences in Hong Kong, his ­Hutchison Port ­Holdings handles about 13% of the world’s container traffic, and his recently acquired Northumbrian Water supplies clean drinking water to 4.5 million people in England and sewerage services to ­another 2.7 million. Li also has personal investments in tech startups like Facebook and Spotify.

#10. Karl Albrecht

Net Worth: $25.4 billion (down from $25.5 billion in 2010)
2010 Rank: #12
Age: 92
Fortune: Self-made
Source: Aldi Supermarkets
Country of Citizenship: Germany
Residence: Mulheim an der Ruhr,
Marital Status: Married, two children
Karl Albrecht’s $39 billion (estimated sales) discount supermarket giant, Aldi Sud, has some 4,500 stores, including 1,200 across 32 U.S. states. It opened its first New York City locations in 2011, one in Queens and another in the Bronx. To keep costs low, Aldi stores do not accept credit cards. He and his late brother Theo got their start at their mother’s corner grocery store after World War II and turned it into a large retail chain based on low prices in a no-frills setting. They split ownership in 1961; Karl took the more profitable stores in southern Germany, plus the rights to the brand in the U.K., Australia and the U.S.

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