List of Official Philippine Holidays 2014 (Regular, Special Non-working, Special Day for Schools)

To those of who have been eager to know the Official Philippine Holidays 2014, the long wait is finally over as President Benigno S. Aquino III has already signed Proclamation No. 655 s. 2013 which declares the special non-working days, special holidays for all schools, and regular holidays for the year 2014.

The list includes:

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Seat-sales offered by various airline companies used to be lost opportunities due to the uncertainties of when the official holidays would be.  Now, one would be able to plan vacations way ahead of time as the list of holidays is out and there are four long weekends in 2014 including the Holy Week.

Here’s a chronological arrangement:

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Enjoy the holidays!

Source:  http://www.gov.ph/2013/09/25/proclamation-no-655-s-2013/


Pork Barrel Scam: Is There Anything We Could Do?

Are you willing to work 1, 2, 3, or 4 months a year to feed a number of greedy congressmen, senators, and other politicians?

For sure all of you would say not a chance, right? Well, that is what seems to be happening in our country right now. YOU and I are feeding these greedy politicians who pretend to be public servants but are actually after the funds they could get such as PDAF and IRA.

I feel so helpless right now. Around 1/3 of my salary goes to taxes. Taxes whose use is not maximized for the benefit of the citizens but of the greedy (and filthy) politicians who happen to be in the position to steal from the coffers of the government.

Are you happy for the road repairs that were done in your area? The ones where, during the actual repair, signs of “A priority project of Congressman Baboy” or “A project of Governor Buwaya” displayed? Two things you have to remember with projects like those:

(1) the funds for the project came from the TAXES THAT YOU AND I PAID FOR and not from the Congressman/Mayor/Governor;
(2) the Congressman/Mayor/Governor who made that project most probably STOLE AROUND 20% of the project’s gross contract price; and
(3) the road itself is most probably SUBSTANDARD — a few heavy rains here and a couple of storms there would easily wash out or damage it again!

So who voted these politicians last elections? This might draw the ire of some people but unless something drastic happens with the way our voters choose who to vote, I prefer that ONLY INCOME TAX PAYERS SHOULD BE ALLOWED TO VOTE. A significant number of our voters are non-income tax payers. Sadly, they are the ones who are easily swayed by vote buyers so most of the towns, cities, and provinces end up being run by politicians who spent so much during the elections.

What do you expect from a governor, a senator, or a congressman who spent tens (or hundreds) of millions of pesos during the elections? Let’s assume that once elected they earn P50,000 per month as salary.

P50,000 x 13 months x 3 years = P1,950,000 for a 3-year term
P50,000 x 13 months x 6 years = P3,900,000 for a 6-year term

If he spent P50M during the campaign, where and how would he get the money back? Isn’t it going to be through PDAF, IRA, kickback, illegal transactions, jueteng payroll, and other similar illegal activities?

IT IS TIME THAT WE FILIPINOS LET OUR VOICES BE HEARD.
TAKE A STAND.
VOTE WISELY.
REPORT ERRING PUBLIC OFFICIALS.
BE A GOOD EXAMPLE TO PEOPLE AROUND YOU.

That way, we would all be happy knowing that the taxes we pay every payday go to fruitful projects that would ultimately benefit everyone! I can’t wait for that day to come. How long it would take will depend on what we do today!


Ways To Make Paydays More Enjoyable

Are you able to set aside a portion of salary for your savings and/or investments?

Do you have an emergency fund you could use during, well, emergency situations?

Whenever the payday is about one week away, do you still have enough money to sustain your (or your family’s) needs until the payday comes?

Are you able to prepare financially for your family’s future?

If your answer to at least one of the questions above is no, then this article series is for you.

Are you excited because payday is only a couple of days away?  Or are you sad and stressed because you have no more money to settle a bill today?

Most of us feel that we are not earning enough. We believe that our salary should be higher than what we receive.  Well, everyone will agree that our salary should be higher than what we receive right now.  Remember that no employer in his right mind would overpay his employees.

What we should understand is that whether our salary is enough to sustain our needs or not depends on a lot of factors, most of which have something to do with our financial literacy.  A person who is single and earns Php60,000 a month usually ends up with no savings nor investments.  A couple whose combined earnings is at least Php70,000 monthly experiences the same thing.  If they continue with the same lifestyle and financial decisions as they do now, they will eventually end up in debt which is going to be so hard for them to overcome.

There are a number of things we do that we believe are not doing us any harm financially as we only spend a couple of pesos here and there.  The table below shows some of them:

Activity 1 Day 1  Week 1 Month 1 Year 10 Years
Dining Out Php 100 Php 700 Php 3,000 Php 36,500 Php 365,000
Taxi Ride Php 500 Php 2,000 Php 24,000 Php 240,000
Juice Drink/Soda Php 50 Php 350 Php 1,500 Php 18,000 Php 180,000
Smoking (Cigarettes) Php 25 Php 175 Php 750 Php 9,000 Php 90,000
Drinking (Liquor) Php 200 Php 800 Php 9,600 Php 96,000
Junk Food Php 30 Php 210 Php 900 Php 10,800 Php 108,000

The small things that we think do not have any impact on our finances actually adds up to a significant amount — amount big enough it could spell the difference between living a financially comfortable life or a troublesome one.  This can be seen rather clearly from the table above.  The money one could save from the six examples given totals Php8,950 a month, Php107,400 a year, and Php1,074,000 in 10 years. What if we actually spend more than the examples provided above?

If we would argue that “Hey, I don’t do all of those!  I am only guilty of half of them!”  Well, ‘half of them’ still translates to Php 4,475 a month, Php53,700 in a year, and Php537,000 in 10 years!  That’s still  a lot of potential savings that went down the drain.

If we could cut down on our expenses in every possible way without compromising quality, we could all look forward to a better financial situation.  We could use the money we were able to cut from our expenses to save and invest for our future.  Paydays would be more enjoyable because it means we’d again have more money to save and invest.


Credit Card Interest Computation – Learn it Now!

Did you incur an interest/finance charge in your credit card account?
Do the charges seem higher than you expected?

Well, maybe it’s because you were thinking of a different way of computing for the interest! In an ordinary case, we compute the interest as:

Interest = Principal x Rate of Interest

So if the one borrows P10,000 and the interest rate is 3.5%, the interest would be P10000 x 0.035 = P350.

If your amount due last month in your credit card account was P20,000 and you paid a total of P10,000 on or before the due date, do you think you will be charged interest on the P10,000 and thus expect a P350 interest in the next bill?

The answer is a big NO! Interest charges in a credit card account do not work that way. You will be charged interest not in the P10,000 balance but in the average daily balance of all the purchases you made during that month and in the purchases that you make in the next (or succeeding) billing cycle.

To illustrate the point above, refer to the interest charges computation provided to me by my credit card provider which I requested for me to be fully aware of how I am being charged interest in my account) given to below:

Interest Rate: 3.5% per month Statement Period 19-Feb to 18-March

Transaction Amount

(A)

Posting Date

(B)

(A x B)

Transaction Date

Debit

Credit

Balance

From

To

No. of Days

Daily

Balance

17-Jan

1,071.75

1,071.75

17-Jan

27-Jan

10

10,717.50

27-Jan

293.53

1,365.28

27-Jan

28-Jan

1

1,365.28

28-Jan

403.75

1,769.03

28-Jan

2-Feb

5

8,845.15

2-Feb

797.29

2,566.32

2-Feb

6-Feb

4

10,265.28

6-Feb

30,174.00

32,740.32

6-Feb

6-Feb

0

0.00

6-Feb

15,418.00

48,158.32

6-Feb

6-Feb

0

0.00

6-Feb

4,413.00

52,571.32

6-Feb

6-Feb

0

0.00

6-Feb

1,854.08

54,425.40

6-Feb

7-Feb

1

54,425.40

7-Feb

1,258.70

55,684.10

7-Feb

10-Feb

3

167,052.30

10-Feb

236.75

55,920.85

10-Feb

14-Feb

4

223,683.40

14-Feb

2,223.27

58,144.12

14-Feb

14-Feb

0

0.00

14-Feb

710.11

58,854.23

14-Feb

18-Feb

4

235,416.92

18-Feb

1,200.00

60,054.23

18-Feb

18-Feb

0

0.00

18-Feb

600.00

60,654.23

18-Feb

18-Feb

0

0.00

18-Feb

500.00

61,154.23

18-Feb

18-Feb

0

0.00

18-Feb

61,154.23

18-Feb

19-Feb

1

61,154.23

19-Feb

61,154.23

19-Feb

22-Feb

3

183,462.69

22-Feb

672.41

61,826.64

22-Feb

23-Feb

1

61,826.64

23-Feb

650.50

62,477.14

23-Feb

23-Feb

0

0.00

23-Feb

2,331.02

64,808.16

23-Feb

24-Feb

1

64,808.16

24-Feb

498.36

65,306.52

24-Feb

24-Feb

0

0.00

24-Feb

581.00

65,887.52

24-Feb

12-Mar

16

1,054,200.32

12-Mar

35,000

30,887.52

12-Mar

12-Mar

0

0.00

12-Mar

25,000

5,887.52

12-Mar

18-Mar

6

35,325.12

18-Mar

5,887.52

18-Mar

18-Mar

0

0.00

60

2,172,548.39

Average Daily Balance (ADB) = Total of the Daily Balances/No. of Days in the Cycle = 2,172,548.39/60= Php 36,209.14

Notes:

  1.  My previous billing cycle started 1/17 and ended Feb 18.
  2. Amount due me was P61,154.23
  3. I paid a total of P60,000 on the due date of March 12.
  4. My unpaid balance was only  P1,154.23.
  5. I used my card just four times from Feb 19 to March 18, the first of which was on February 22.  The total amount purchased was P672.41 + 650.50 + 2331.03 + 498.36 + 581  = P4,733.29.
  6. Balance from previous bill plus new charges = P1,154.23 + P4,733.29 = P5,887.52 only.

Credit card companies use weighted average in computing for the Average Daily Balance (ADB) of your account.  How is it done? Let me try my best to explain it to you.

  1. From my first purchase (Jan 17) to my next (Jan 27), there are 10 days.  That is why in the number of days column, you see an entry of 10.
  2. Daily balance for my Jan 17 purchase is computed by multiplying the entries in Columns (A) and (B).   P1071.75 x 10 = P10717.50
  3. Perform steps (1) and (2) to all rows in the table and you will get the Number of Days and Daily Balance values. This applies not only for purchases but also for payments made.
  4. Notice the 2 blank cells in the Debit column dated Feb 18 and Feb 19.  Remember my previous cut-off date was Feb 18, right?  So treat Feb 19 as if I made a purchase (even though I have not), so from Feb 18 to Feb 19 that is one day (that is why the entry in the Number of Days is 1).  And then from Feb 19 to Feb 22 (my first purchase in the next cycle) that’s 3 days.
  5. To solve the ADB, get the SUM of the entries in the Number of Days column (let us call it TOTAL), then get the SUM of the entries on the Daily Balance column (let us call this DAYS).  Divide TOTAL by DAYS.  The result is your ADB.

To compute for the interest, use the formula below:

Interest  =  ADB x Interest Rate x 12 (months) x DAYS / 365
=  36209.14 x 3.5% x 12 x 60 / 365 = P2, 499.92

Therefore the interest I had to pay was P2,499.92.

For failing to pay P1,154.23 of the P61,154.23 bill that was due me, I have to pay P2,499.92 in interest. The interest rate, when computed using the ADB as basis would be: (2499.92/36209.14) x 100% = 6.9041131% or almost 7%. That’s 3.5% interest for 2 MONTHS. However, if based only on the amount I was not able to pay (P1,154.23), that would be a whopping 216.59%!!!

I was lucky enough to have my request for reversal of the interest charge approved. It pays to be a client with a good credit record. I have been paying my bills in full for years so asking for a reversal of the interest charges was not a big issue. Otherwise this would have been one of the worst things that I have done — getting charged P2499.92 in interest just because I failed to pay the P1,154.23 balance on time.

Would you still care not to pay your credit card bill in full on or before the due date?  Your answer is as good as mine! Have a nice day!


Is It a Good Idea to Have My own Credit Card?

Are you asking yourself the same question right now?

Maybe you are wondering if it is advisable for you to have a credit card or not.  You have tried asking your friends for advice and they gave you mixed feedbacks.  Some of your friends tell you that it is perfectly fine to have one and that you would enjoy lots of benefits. Others say that you better stay away from credit cards and don’t even think of applying for one.

So who are telling you the truth?  The answer  is — all of them are!

Having a credit card has its own advantages.  Just like anything though, it has its own disadvantages.  Allow me to discuss both.

Advantages

  1. Security.  You get to buy things even without bringing cash with you.
  2. Margin.  You get to buy even if you don’t have money.
  3. Pay later.  Payment Due Date can be 21 days up to around 56 days after your purchase.
  4. Rebates.  Some credit cards give us much as 5% rebate in some specific type of purchases like groceries.
  5. Points.  Most credit cards offer items that can be redeemed if you accumulate a specific number of points.
  6. Free items.  Most credit card companies offer a free item for newly approved cards.
  7. Promos.   There are promos offered by credit card companies that could save you a lot of money.

Disadvantages

  1. You spend more.  You tend to spend more since you can buy things even if you do not have money.
  2. You are tempted to buy.  You are tempted to buy unnecessary items because of what appears to be “great” deals, or use the card to pay for airline tickets and hotel bookings that are beyond your budget.
  3. Finance Charges.  A number of credit card holders end up getting charged exorbitant fees for failure to pay the total amount due on time.  (There are a lot of credit card holders who pay either only the minimum amount due or a portion of the total amount due.
  4. Risks.  (a)  The risk of losing your card and have other people use your credit card is there.  (b) The risk of indebtedness as a complication of continuous finance and other surcharges is there.

As you can see above, there are great risks as well as great rewards in having a credit card account.

If you have the discipline to: (a) buy only the things that are necessary, (b) buy within your budget, and (c) pay the total amount due on time, then go on and have a credit card.
If you do not have the discipline or you are in doubt if you have it, then i suggest that you should not avail of a credit card.

If you already have a card right now and you are experiencing at least one of the things mentioned in the disadvantages of having a credit card, I recommend that you have your account cancelled and live with cash purchases instead.  Otherwise you’d slowly be buried in debt.

Good luck and I hope you make the right decision!


PAGIBIG (HDMF) MODIFIED PROGRAM: The Great Investment That Could Have Been!

During the middle part of June 2011, representatives from HDMF or PAGIBIG came and presented to us their new program called PAGIBIG Modified Program (or Pagibig 2).  In this program, members are encouraged to save for a minimum of P1000 (each investment/instalment, not necessarily for each month) for a period of 5 years.  Members will then earn a dividend of around 5.5% per year (based on 2010’s dividend rate) which they would get together with all their savings in the program at the end of the 5th year.

The dividend rate of 5.5% per year seems to be small, but the catch was this:

The member’s savings/investments are not only tax-free, but the amount invested was also deductible from the member’s gross taxable income! Sounds great, right?!

I spent a couple of days verifying the information as I thought maybe either we misunderstood what the PAGIBIG personnel said or maybe the personnel made a mistake in her presentation.  I called the PAGIBIG hotline to verify and they confirmed the information.  I searched the internet for the Philippine law that cover HDMF and found a part in the Republic Act that is kind of vague and open for interpretation/s.  I searched for memoranda from BIR that possibly cover my concern and found none.

Finally, after around two to three weeks, I decided to join the program and asked for the form I need to fill out to signify my intent of joining the program.  Around a day or two before I made the decision, I have made computations that would give show me how much I could possibly save from taxes, and here is an example:

If I decided to save PhP4000 a month for just one year, my savings at the end of the 1st year would be

12 x PhP 4000 = PhP48000 total savings in one year

I fall under the 30% tax rate bracket therefore my taxes on my savings should have been

PhP48000 x 0.3 = PhP14400

Which means I should have only PhP48000 minus PhP14400 in taxes = PhP33600.

But since it is deductible from my gross taxable income, I don’t have to pay any taxes.

I should only have PhP33600 but because of the program, I have Php48000 instead.

My 1st year earnings without the dividend yet is:

PhP48000  –   PhP33600 = PhP14400

Rate of return = (14400/33600) x 100% = 42.85714%

Counting in the 5.5% dividend would yield

PhP48000 x 1.055 = PhP50640, which has a 50.71% rate of interest in 1 year.

Assuming dividend rate was 5.5% each year, the value of my investment at the end of the 5th year would have been:

PhP50640 x (1.055)4 = PhP62734.08, which has an 86.70857% interest in 5 years.

An 86.7% return on investment in 5 years is not bad at all!

Unfortunately, during the day I was supposed to submit my form to the HR department I read a new memorandum from the BIR that all contributions (in SSS, GSIS, Philhealth, and PAGIBIG) beyond the compulsory are taxable.

This is a great case of what-could-have-been!

SAYANG!!!


Credit Card Dos and Donts

As I have mentioned in one of my posts, there are a lot of credit card holders who are indebted because of poor financial discipline.  I hope that this post would help them improve.

Some DO’s and DONT’s of credit card use.

You should:

  1. Always pay your bill ON TIME.
  2. Always settle your bill in FULL.
  3. Never avail of cash advance as it automatically merits finance charges.
  4. Know the various fees that the company will charge you in case of late payment, cash advance availment, or instalment payment/s.
  5. Take care of your credit card.  Do not lose it. In case you did, call the hotline ASAP and report the loss to avoid unauthorized use of the card.
  6. Secure your billing statements as they contain valuable information about yourself.  If you plan on throwing them, shred (rip) them first.

Some of these are related to the ones I mentioned above but just the same,  allow me to list them down:

You should NEVER:

  1. Pay annual fees both for the principal and supplementary cards.  Most credit card companies have their own criteria (requirements) that a cardholder has to meet to qualify for waiving (or reversal) of annual fees.  All you have to do is ask.
  2. Provide the security code of your card to anyone.
  3. Forget the due date of your bill.
  4. Pay just the minimum amount due nor pay any partial amount of the total due as it merits finance charges.
  5. Use your card online on websites/merchants you are not familiar with.
  6. Charge anything that is not within your budget.  If you are not sure if you have enough budget for the purchase then don’t buy it.
  7. Buy items that you wouldn’t buy if you didn’t have a credit card.
  8. Charge somebody’s purchase to your card unless the person gives you the payment on the spot.

If you have any comment, question, or you would like to add something to my list, feel free to post it through a comment so I can include it here by updating this entry.  Thanks.


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