Jovanie P.

Cadungog BSA-V
Dr. Evangeline P. Jamili, CPA

Financial Literacy for Filipinos: Understanding for better living

Financial literacy is the ability to use knowledge and skills to manage one's financial
resources effectively for lifetime financial security.

According to NEDA, the Filipino mindset upon receipt of salaries shows that spending
comes in before saving. What is left, is saved. And if there's none, then, there's nothing to save.
From a study conducted by Philam Life, 96 percent of Filipinos are concerned about their own and
their family's health but only 16 percent are prepared to pay for medical costs. The number of
senior-dependents is rising. Financial planning teaches individuals to be responsible when it comes
to their finances, and instills the discipline needed in order to keep track of their financial goals. It
involves educating the Filipinos on the different types of goals that they should set and prepare.
The country has a growing demand for more investments, and in order to address it, it is advised
that Filipinos should save first and spend whatever is left after putting their savings aside.

Financial literacy is very important. However, in the Philippines, it is a problem that affects
not just the day-to-day living of the Filipino people, but also their lives in the long run. A lot are
unprepared for any circumstances that requires huge amount of money to settle. Most retirees are
depending on their children. And this will continue like a cycle from generation to generation if
the Filipino people will continue as a financial illiterate race. If more people are knowledgeable in
handling their finances, it would ease up their living. They will be prepared for any fortuitous
events that could happen. With proper investments, they could earn money even if they are
supporting their children in college. Even the effects of investments to the whole economy is a
news to a lot of Filipino. Investments are very important in the economy. It helps businesses
acquire funds for their projects and in result, the economy of the country will prosper. If there are
projects or expansion of businesses in the country, it could mean more jobs for the people, and
more expenses that could contribute largely in our growing GDP.

In conclusion, the Filipino people should be taught of proper investments, choosing the
right goals and picking the best investment vehicle to meet their goals in the future. And being an
accountant, it should be one of our duty educate the Filipino people even if just to the extent of our
capacity. We accountants should participate for the growth of the nation if we are given a chance
and it could have a positive impact on the current position of the people.
Sources: http://caraga.neda.gov.ph/financial-literacy-for-filipinos-understanding-for-better-living/

https://www.philamlife.com/en/about-philamlife/media-centre/press-releases/2018/press-release-2018-06-27-philam-
saves-on-financial-literacy.html

https://www.amiananbalitangayon.com/philam-brings-financial-literacy-closer-to-filipinos/
Jovanie P. Cadungog BSA-V
Dr. Evangeline P. Jamili, CPA

Why KaPa needs to be shut down

Kabus Padatuon or more commonly known as KaPa is a controversial ponzi scheme
investment proposition. It is believed by the Securities and Exchange Commission that many
Filipino were lured to invest in a fraudulent scheme, which allegedly disguised investment-taking
activities as a religious exercise. Last June 10, 2019 the SEC announced that it would file criminal
complaints against officials of the Kapa Community Ministry International for an alleged
investment scam that reportedly stands to defraud participants over Php50 billion.

Members were encouraged to “donate” at least Php10,000 in exchange for a 30% return on
investment monthly. And in order to pay the said ROI to their 5 million participants, Kapa would
need at least Php15 billion per month.

It is an issue that needs immediate action before any major thing happens to the whole
country. Take Albania for example, in the years 1996-1997, Albania faced the same problem. The
country was convulsed by the dramatic rise and collapse of several huge financial pyramid
schemes. Almost half of the population participated and the country’s liabilities after the collapse
reached to almost half of the country’s GDP. It led to uncontained rioting, government fell and the
country descended into anarchy, and a civil war that killed 2,000 people.

As of today, asset freeze order was issued by the Court of Appeals and the SEC secured
Php100 million in Kapa assets. The SEC obtained the freeze order through anti-money laundering
council. The forfeited assets may then be distributed to affected investors.

One of the important things to remember is that the higher the return on investment, the
higher the risk. Investment pyramid schemes are too good to be true, even all the major investment
institutions cannot provide such a big ROI as what Kapa is promising. Sooner or later, the amount
of cash inflow would never be enough to cover all of its outflows. Or perhaps one of the officials
will run away with the investment money. Both are risks that should be eliminated because it just
not affects the lives of those participants but also to everyone living in the country and who knows
how many generations would pass before it is resolved. The point is, it may be a way to earn easy
money, but it’s demise entails a long-term effect to the whole country. History is one of the best
teachers and Filipino people should consider learning from it.

Sources: https://www.pna.gov.ph/articles/1072358

https://newsinfo.inquirer.net/1130706/sec-secures-p100m-in-kapa-assets

https://news.abs-cbn.com/business/06/16/19/regulators-freeze-p100-m-in-kapa-ministry-assets
Jovanie P. Cadungog BSA-V
Dr. Evangeline P. Jamili, CPA

Hit by “ghost dialysis” scandal, PhilHealth hires fraud investigators

PhilHealth will hire 130 fraud investigators following a “ghost” dialysis scandal that has
rocked the government insurance firm. Aside from the investigators, PhilHealth will also hire 12
more lawyers and 54 doctors to help validate the claims made by a dialysis center in Quezon City.

The fraudulent schemes are allegedly practiced by WellMed Dialysis Center in Quezon
City. The center allegedly files “ghost” claims to PhilHealth as revealed by a former employee,
Edwin Roberto. As a result, PhilHealth continues to pay for dialysis treatments to health providers
even though some of the patients have long been dead.

According to Roberto, the scheme ran from 2016-2018. He noted that PhilHealth allows
90 dialysis sessions for each patient and even if the patient did not avail all 90 sessions, the center
would still file the claims in behalf of the patient without of his or her knowledge.

According to lawyer Harry Roque, it is not new in the Philippines since there are also issues
regarding dead voters. Roque criticized the lack of a “checks and balance” system within the
government health insurance firm to prevent corruption.
In a statement of WellMed’s legal counsel said its client “vehemently denies accusations”
of Roberto and its former PhilHealth officer and cashier Liezel Santos. The firm added that they
will be filing criminal charges against Roberto and Santos. The firmed stated that Roberto and
Santos connived and perpetrated the fraudulent scheme, which they are attributing to the dialysis
center.
The agency is currently investigating 2,000 health providers on possible fraudulent claims.

In conclusion, this is a serious matter that needs a lot of attention. Not only it suggests
corruption but it also shows that even the government itself can be a victim of fraudulent activities.
The fund itself is for the good of the Filipino people and should not be spent by certain people.
The scheme suggests that the internal control of PhilHealth is not sufficient to prevent or detect
any fraudulent claims. Auditors should also be hired in order to prevent this kind of activities to
happen in the future and also to improve the established control system of the government agency.

Sources: https://news.abs-cbn.com/news/06/06/19/hit-by-ghost-dialysis-scandal-philhealth-hires-fraud-investigators

https://news.abs-cbn.com/news/06/14/19/doj-indicts-wellmed-co-owner-2-whistleblowers-over-philhealth-ghost-claims

https://newsinfo.inquirer.net/1130715/ghost-dialysis-court-orders-nbi-to-release-wellmed-owner