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KIDS
saved this bank. No kidding.
And if
the main man of The Real Bank (A Thrift Bank), Jose G.
Araullo, would have his way, all Filipino children below
12 years old should start banking to save the whole
thrift-bank industry.
“In the
long run, that would happen, and the industry would
benefit from these children,” Araullo told
BusinessMirror in a voice as steady and as sure as his
taking rein of The Real Bank from retirement.
Several
floors below from where Araullo sits is one of his
proofs: the sixth of 23 branches that have hit P100
million in capital base in just under a year since he
led the savings program called “Bata…Bata…Mag-impok
at Magsinop.”
“We
don’t expect anything in terms of revenue from this
advocacy. But, of course, the image for the bank
improved and clients started to trust us again; and
trust is very, very important for banks,” Araullo said.
The Real
Bank’s advocacy is the main campaign that Araullo began
when businessman Jose L. Acuzar introduced him as the
leader of a new management team on July 1, 2003.
When
Araullo roused himself from retirement as president of
the Philippine Savings Bank Inc., the country’s
second-largest thrift bank, The Real Bank was posting
minimal growth, according to its web site.
The
reclusive Acuzar, owner of real-estate developer New San
Jose Builders Inc., led a takeover. Acuzar bought
majority stake in 1994 in the then-Real Savings and Loan
Association Inc., an 18-year-old financial institution
headquartered in Cainta, Rizal.
Before
the end of 2003, the bank’s total resources hit P2.39
billion. Acuzar pumped in fresh capital to the bank and
boosted resources to P2.56 billion by end-2004. The
bank’s strategy of trust building paid off a year later
when loans and deposits increased total resources to
P3.27 billion in 2005.
Araullo
said he expects this to hit P5 billion by end of this
year.
“We’re
always liquid, all the time,” he added.
Textbooks
AT the
start of this year’s classes, some children would get to
know “Lolo Pepe” and his stories of frugality and how
saving money could lead to success. They would get to do
that through the book penned by Araullo, whose character
“Lolo Pepe” has more paunch but a similar punch line.
The book
is one of the many elements in The Real Bank’s strategy
to sustain children’s savings consciousness.
Two
years ago, the bank partnered with the Department of
Education (DepEd) to produce textbooks to develop that
attitude.
It also
gave away plastic piggy banks to depositors under 12
years old. Likewise, it doesn’t charge deposits in
coins, as other banks do. Most banks scrape off 10
percent of the total deposits if these are in coins. The
Real Bank even returns the piggy bank.
“How
could we encourage children to save if we take away
something they held dear for several days?” Araullo
said.
The Real
Bank’s encouragement paid off: its savers’ club has some
4,531 members as of April this year. These are children,
the youngest of which is seven years old, who carry
passbooks in their names or above the name of their
guardians holding the account in trust.
Some of
these children, with their mothers in tow, would head to
the bank’s branch in Bulacan—where most of these kiddie
savers live—holding close to each chest their red piggy
banks. Coins would spill on the teller’s marble slab
counter. A piggy bank could hold P500 worth of coins
slipped through its one-inch slot on top. In a month’s
time, which is a conservative estimate of each kid’s
ability to save, this could amount to P2.2655 million in
deposits for The Real Bank.
The bank
gives a 4-percent annual interest on these savings, or
P240 on top of a P6,000 annual savings if each child
saves P500 a month.
Rewards
ON an
unusually warm late afternoon a year after World War II,
a boy stood in front of a soda parlor in
Manila
contemplating whether to spend the 10 centavos in his
pocket for a bottle of chilled Coca-Cola.
A minute
later, the eight-year-old shrugged his shoulders, kept
his hands in his pockets and walked
5 km
to where a bus could take him home. That day, he saved
20 centavos.
“My
father held a contest, rewarding who among his sons had
the most money saved for a year, a week before
Christmas. I won almost every year,” Araullo says of his
motivation for passing off his favorite drink and for
walking from his school, San Beda College in
Manila,
to the bus stop for the fishing village of Navotas.
Araullo
brought that thriftiness with him for 14 years as one of
the top executives of the country’s largest bank,
Metropolitan Bank and Trust Co., and then of PSBank.
“When
you work hard for money, it’s difficult to spend,”
Araullo says.
Twenty
percent of what he earns while working for Metrobank and
PSBank, he says, he saves.
After
putting on again his hat as a banker in The Real Bank,
he carried again these values. He also brought the
rewards element in the bank’s tack to shore up
children’s savings: giving free insurance to depositors
aged 13 to 19.
This
product would be launched this month, alongside the
textbooks that The Real Bank is giving in coordination
with the DepEd.
Other
products that the bank would launch are aimed at
attracting children and families of overseas Filipino
workers (OFWs). The Real Bank currently has a paluwagan
type of savings for OFWs, wherein families would pool
the peso equivalent of a month’s salary and withdraw it
upon maturity.
“We
worked so hard to reach this point of gaining public
trust, there’s no way but strengthening that trust,”
Araullo said.
Part of
that strengthening is the renovation of the bank’s
headquarters in Quezon City and its branches spread out
in Metro Manila and five provinces.
Low
savings rate
THE Real
Bank is not the only one concerned with shoring up the
country’s domestic savings rate that has been lagging
other Asian countries.
In 1996,
when the Philippines was showing some improvement in
gross domestic savings (GDS), then-President Fidel V.
Ramos issued Executive Order 364, creating the National
Commission on Savings (NCS) under the supervision of the
Department of Finance.
However,
more than a decade later, the same sad story slaps the
state to strive to shore up savings.
The
Philippine Deposit Insurance Corp. (PDIC) cited data
from the Asian Development Bank’s Key Performance
Indicators that reveal the country’s GDS at 20.1 percent
in 2005 lagged behind most of its Southeast Asian
neighbors.
It is
not even half of
Singapore’s
48.6 percent and outpaced by Vietnam’s 30.2-percent GDS
rate, the PDIC said.
Likewise, a check with the DOF web site reveals the NCS
was nowhere on its list of attached bureaus or agencies.
The only reference to the commission was the press
statement announcing the EO and its formation.
This was
despite the launching of the Thrift Incentives for
Progress through Industry and Discipline (Tipid)
movement, “designed to instill in students the virtue of
thrift and importance of saving in banks,” as ordered by
Ramos, to have been continued and carried out on a
nationwide scale.
Araullo
blames the sagging savings rate in part to a
consumption-centric generation.
“What is
happening now is that some of us use our credit cards,
for example, as if we are just working for the
credit-card company,” he says.
Araullo
recommends paying credit cards on time. This comes from
one of those who pioneered the credit-card industry in
the country.
Likewise, he adds that most Filipinos fail to appreciate
the value of maintaining the status of their incomes.
“Goals
in life should be clear,” he says, citing that if OFWs
aspire for a house, they should also consider buying one
for investment.
“There
are other ways of spending money; especially now that
the industry is booming, it’s good to look at real
estate as investment,” he adds.
Savings
week
FOR the
13th year, the country would celebrate again at the end
of the month a “Savings Consciousness Week.”
The week
comes at a time when so much money is circulating in the
system and consumption is at its highest.
According to the government numbers, increased consumer
spending at 5.9 percent in the first quarter of 2007
from 5.3 percent a year ago is fueled by OFW
remittances.
Such is
the challenge laid out before savings advocates like
Araullo.
A
recently released paper by the United Nations Children’s
Education Fund cited an ADB study which noted that OFW
families reserve only 9 percent of the remittances they
receive in savings and investments.
“In the
Philippines 36 percent of remittances of a household are
used to repay debts incurred by the costs associated
with the TOWs/IOW’s [temporary overseas workers and
irregular or undocumented overseas workers] applying for
work abroad,” the paper said.
The
108-page report noted that “household expenditures
account for 32 percent and, when added together with
appliances/furniture [13 percent], account for nearly
half.”
Titled
“Towards a Greater Impact of Remittances on Children’s
Rights Realization,” the report added that only 10
percent of the remittances have gone to the education of
children.
Nonetheless, Araullo remains optimistic: he points to a
child in khaki shorts and white polo sauntering to the
teller, carrying a red plastic piggy bank, his mother at
his heels. He rests his chin on the marble slab, deftly
opens the slit in its belly, and gently allows coins to
spill.
“He’s
our future,” Araullo says.
He’s
also the present, at least, for The Real Bank. |
