JULY 5, 2009
(STAR)  By Sheila Crisostomo - Governments worldwide are losing some $40.5 billion in revenues annually due to tobacco smuggling, a report by the International Union Against Tuberculosis and Lung Disease showed.

Based in Paris, the union’s effort has been recognized by the World Health Organization (WHO) as part of internationally-recommended Stop TB Strategy that has been used to treat 32 million people in 202 countries.

In its report, the union said some “11.6 percent of the global cigarette market is illicit and this is equivalent to $40.5 billion in lost revenues.”

“Higher income countries, where cigarettes are more expensive, have lower levels of cigarette smuggling than lower income countries, contrary to the tobacco industry claim that the overall level of smuggling is dependent on cigarette price,” the report stated.

Majority of the world’s smokers live in low and middle-income nations.

“If this illicit trade was eliminated, governments would gain, in principle immediately, at least $33 billion, and from 2030 onwards save over 160,000 lives a year, resulting from an overall increase in cigarette price of 3.9 percent and a consequent fall in consumption of two percent,” it showed.

This means that in just six years, more than a million lives from low and middle-income nations would be saved.

The report was released during the opening of the third inter-governmental negotiating body on the Protocol on the Illicit Trade in Tobacco Products in Geneva, Switzerland recently.

The protocol is the first agreement to be negotiated under the World Health Organization-led Framework Convention on Tobacco Control, the world’s first global health treaty.


After Legacy: Changing the image of rural banks TAKIN' CARE OF BUSINESS By Babe Romualdez Updated July 07, 2009 12:00 AM

The filing of a large-scale estafa case against Celso delos Angeles and the former officials of the Pilipino Rural Bank is just the latest episode in the sorry saga of the Legacy group, whose questionable transactions and practices have placed the future of so many people in jeopardy. What’s even more unfortunate about the whole thing is that many of the victims are poor and hardworking fishermen, farmers, market vendors and ordinary people who entrusted their hard-earned money in the coffers of the Legacy-affiliated rural banks.

While the smoke seems to be clearing now with the intervention of the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp., it remains to be seen if all the depositors will be able to get their money back – and how soon. No doubt the scandal has also tainted the rural banking industry, especially with depositors going into a panic and withdrawing deposits when news broke about the sudden closure of the Legacy banks in various parts of the country in December last year.

Fortunately, people have since made the distinction between honest-to-goodness rural banks (whose real intention is to be catalysts for countryside development) from institutions whose real motivation is to dupe people out of their hard-earned money. Today, the public is being extra careful about choosing the kind of banks where they plan to deposit their savings.

Not many people know that rural banks came into being via Republic Act 720, better known as the Rural Banking Act of 1952 authored by the late Senate President Eulogio “Amang” Rodriguez. RA 720 paved the way for the creation of rural banks that would serve the credit needs of poor people in the rural areas. In the past, ordinary folks had no recourse but to turn to usurers and loan sharks for credit to buy farming implements and seeds, to buy or repair bancas, and other needs.

Amang Rodriguez set the example by putting up the first rural bank in the country, with others following his lead by setting up other rural banks in various locations. By 1956, the number of rural banks rose to 26, and in 1957, the Rural Bankers Association of the Philippines (RBAP) was officially founded. The only trade organization for rural banks in the Philippines, RBAP has certainly been instrumental in bringing progress in the countryside, partnering with government for the implementation of policies and legislation supportive of rural economic development.

To date, RBAP has 650 member banks with over 2,000 branches spread all over the country and over the years, has been working to serve the “unserved and underserved” communities. In fact, in many areas, there are no other forms of financial institutions other than these rural banks, such as Alabat in Quezon, Lagawe in Ifugao and Jordan in Guimaras.

Outgoing RBAP president Tomas Gomez and Vicente “Enteng” Mendoza told me over lunch that rural banks have been extending crucial financial assistance in many provinces, particularly among farmers, fishermen and even sari-sari store owners who want to expand into mini-groceries. (Enteng Mendoza is the grandson of Amang Rodriguez so it doesn’t come as a surprise that he’s now at the forefront of the rural banking industry.)

These rural folk need small capital to sustain or grow their trade, and this is what rural banks can provide, Gomez says, particularly since they have more access to the smallest-income individuals or business enterprises mostly in the agriculture and agrarian sectors. Even before the word “microfinance” was coined, the rural banks have already been serving this market segment composed of people engaged in traditional backyard businesses like basket weaving, handicraft making or manufacture of sweets and delicacies.

Of course, the public has to be careful in choosing the bank they want to borrow from or invest in. RBAP advises depositors to dig the history of the bank and its owners’ reputation. It would also help to find out how the bank has helped the community it serves, where the money is invested and why the interest rates (on deposits, for instance) are priced that way. It can be recalled that Legacy used “gimmicks” to inveigle depositors like offering cellphones, laptops and promising fantastic double-your-money schemes within three to five years. The BSP has already warned about “copycat banks” attempting to repeat the tactics used by the Legacy group, and some of these are not small fry.

While the RBAP cannot police its own ranks as of yet (we understand the Legacy-affiliated rural banks are not RBAP members), part of its plans is to take on a policing function among its members to prevent the occurrence of “misguided banking practices.” RBAP has a strong set of standards by which members have to live by, such as adherence to the Code of Ethics, compliance with BSP regulatory standards as well as transparency and governance. By being able to police its own ranks, RBAP will be able to help depositors by ensuring that the rural bank where they are investing their money is legitimate and has the capacity to protect their investment.

* * *

We were informed that the SSS is undertaking a project called the Unified Multipurpose Identification (UMID) Card Project and that the bidding is going to be held soon. The project has an initial price tag of P3 billion and as usual, people are suspicious when government undertakes a project especially one of this magnitude. Several sectors have expressed apprehension about the bidding process, with concerns that certain parties might be getting an undue edge over the other bidders.

The project will affect a lot of SSS members, which is why the bidding should be conducted in an open and transparent manner to douse any suspicion of bid-rigging and prevent a repeat of the scandals that happened in the past.

Chief News Editor: Sol Jose Vanzi

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