Tipid sa panahon ng COVID: Managing your hard-earned money during the pandemic

Published December 24, 2020, 8:00 AM

by Manila Bulletin

The COVID-19 pandemic has brought much uncertainty, especially about one’s finances. Whether you’re a business owner, employee, stay-at-home parent, or student, you may find yourself reassessing your finances and spending priorities in the “new normal.” 

In any crisis, it is crucial to remember that how you manage today will dictate how quickly you can bounce back after it. While the country’s gradual pickup in economic activity point to recovery in the near future, here are a few tips for managing your finances during the pandemic:  

  1. Revisit your family’s spending priorities.

While you cannot control the pandemic or even the economy as a whole, the one thing you have charge over is your expenditure. 

“The first step is to change your lifestyle. One thing that COVID has taught us is the difference between what is essential and non-essential,” financial coach and motivational speaker Chinkee Tan said during a Zoom interview. 

Exciting 2020 plans, such as travels and celebrations, may be put on hold for now, but your family’s immediate needs — food, healthcare, utilities, debt payments, and education — are here to stay. Ensure that your monthly bills are provided for before you consider spending on non-essentials and investments. 

An excellent way to keep your expenses in check is to explore online banking and digital payment schemes. Going cashless allows you to better track and organize your payments, transfer funds remotely, and limit health risks from physical contact when paying in establishments. 

  1. Build your emergency savings.

Now is as good a time as any to start building your family’s emergency fund. It will give you ample headroom when the going gets tough and the right financial security level before moving on to heftier investments. 

Tan’s advice is to set aside at least six to twelve months’ worth of your minimum monthly expenses. It should include your payments for utilities, rent, tuition, mortgage, food, and other essential expenses. 

If you haven’t yet, open a savings account with a trusted bank. It allows you to formally secure your emergency savings while keeping them accessible when you need it the most. Several accredited digital savings accounts offer interest rates well above the usual savings account. Make sure that your bank is in good standing with the Bangko Sentral ng Pilipinas. Deposits are insured with up to P500,000 by the Philippine Deposit Insurance Corporation.

The Philippine Identification System or PhilSys will make opening a bank account easier for millions of unbanked Filipinos. As of November 30, the Philippine Statistics Authority led the pilot PhilSys registration for more than 7 million household heads from low-income families, providing them with formal identification to help them access banking and other government services. For the latest updates on PhilSys, follow the program’s official Facebook page here

  1. Beware of financial scams.

While everyone is just trying to get by in the “new normal,” scammers are lurking both online and in real life.  Malicious fraudsters are successful because they are often believable. 

Protecting your hard-earned money from scammers is as critical as earning and saving it. Seemingly lucrative investment scams will look tempting to the untrained eye, that even knowledgeable investors can fall into their trap if due diligence is not exercised. 

Some of these scams are “cryptocurrency investment” schemes. Because few potential investors understand what cryptocurrency is, false claims are difficult for investors to verify. Over the past several months, advertisements for such schemes have proliferated over social media. Many investment schemes claim to be backed by well-known government personalities, such as Finance Secretary Carlos Dominguez III and former Senate President Manny Villar.

The Securities and Exchange Commission or SEC calls on the public to approach every advertisement with caution, research investment opportunities thoroughly, and report suspicious persons immediately. The SEC’s Investment Scam Checklist outlines the following information that potential investors should verify when an offer is made:

  • Name of the person and the company making the offer
  • Address of both the person and the company
  • Landline number. Do not accept cellular phone numbers only as these cannot be traced. 
  • SEC Registration as an investment taker. Please bear in mind the following:
    • SEC company registration does not grant authority to sell investment instruments, such as securities, bonds, commercial papers, or similar financial instruments. 
    • Only investment houses and financing companies with quasi-banking (QB) license and with SEC-registered securities may offer to sell the same to more than 19 investors. 
    • Only SEC-registered persons may offer or sell SEC-registered securities to the public. 

For reports of potentially fraudulent investment claims, you can contact the Enforcement and Investor Protection Department of the SEC through e-mail at [email protected] or through landline at (02) 8818-6337. 

For malicious messages, lodge reports to the NBI Anti-Fraud Division at (02) 8525-4093 or e-mail at [email protected] You may also send a message through the NBI’s website at www.nbi.gov.ph or their official Facebook account.

You may also contact the PNP Anti-Crime Group (PNP-ACG) through www.pnpacg.ph or hotline number at (02) 8723-0401 local 5313.

Invest safely. 

Investing can yield healthy returns if you approach it wisely, safely, and patiently. Before you invest your hard-earned money, take the time to research and understand the many legitimate investment instruments available in the market.

One safe investment option is government bonds. The Bureau of the Treasury (BTr) offers Retail Treasury Bonds (RTBs) and Premyo Bonds. Government-issued securities are safe, low-risk, and easily accessible through digital channels even for small investors, providing a safe and guaranteed source of extra income that earns on a quarterly basis. More than their attractive interest rates, these bonds are used to raise funds for the government’s projects, particularly the country’s economic recovery program.

You may check out the BTr’s latest bond offerings here

The government is also pursuing reforms to make investing in legitimate opportunities easier and simpler. The Duterte administration’s proposed Passive Income and Financial Intermediaries Taxation Act (PIFITA) will simplify the tax regime for bonds and stocks by reducing the number of tax rates on financial transactions from 80 to 36. Once enacted, PIFITA will make it easier for everyday Filipino investors to put their money in safe and secure investment opportunities.

With the gradual resumption of economic activity in the coming months, the government remains optimistic that the local economy is strong enough to recover in 2021. In the meantime, citizens must learn to manage and protect their hard-earned money — now and beyond the pandemic.