Philippines needs tougher laws vs invest scams – Salceda

MANILA, Philippines - The country needs to adopt tough measures to protect small employees, retirees and overseas workers from falling prey to investment scammers that rob them of their precious savings, a top local government executive said.

Albay Gov. Joey Salceda said retirees, pensioners and returning overseas Filipino workers (OFW), have become favorite victims of confidence tricksters like pyramid scams and similar schemes because the country’s laws are not tough enough to run after and prosecute scammers.

Salceda said the Philippines has so much idle savings, “even enough to totally wipe out poverty,” but are not properly used due to “structural imbalances” in the economy to the disadvantage of returning OFWs and pensioners who fell victims to scams in their search for investments where to park their savings to boost their interest earnings.

A respected economist and adviser to past Philippine presidents, Salceda refers to the country’s high savings rates which presently runs up to about 42 percent of gross domestic product and its low investment rates at 22 percent which combine to create a huge pool of idle funds estimated at about P3 trillion, as reflected in the 2013 World Bank data on Philippine Investments and Savings.

He said OFW remittances have added to the high savings rates “that feed condominium and housing property investments, and of course local mall consumption, and anecdotal evidences suggest, based on property sales breakdown – housing and condominium investment – that OFWs are actually good savers and investors.”

“They, therefore, must be nurtured to level up towards business formation. More so, because there are also incipient signs that the property markets are also susceptible to scams, especially surrounding their pre-sales,” he said.

As a security measure, Salceda proposes that RA 9710 or the Magna Carta for Women, be amended to become the Magna Carta for Women, Senior Citizens and Retirees, and include policies that will protect them from marketing and financial predators.

“Aside from investor protection, financial literacy should be clearly targeted at the two most vulnerable sectors – the retirees and returning OFWs – which should be more effective than the current helicopter drop or shotgun approach of information dissemination by the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP),” he noted.

Salceda said “financial literacy is a good start but we must really work on supply - or investible instruments so small savers, especially retirees do not fall for Ponzi schemes,” adding that ordinary savers, especially retirees who chose lump sum collection with lower annuities, are most persistently “at-risk” so that they need special attention since they rely mainly on passive investments offered by investment scams. “Retirees are not greedy for returns, they are just simply unprotected,” he stressed.

Salceda suggested that a “hounding dog marketing strategy for financial literacy, should hound these returning OFWs and retirees wherever they are, track them down on a master mailing list to orient them on certain prospects and teach them the techniques of investments.”