Monday, April 23, 2018

Work hours

In which industries do employees work the longest hours per week? by BusinessWorld

Business World has this infographic feature based on the  2017 Gender Statistics on Labor and Employment (GSLE) report released by Philippine Statistics Authority which showed the industries in which employees work the longest hours per week

The top 3 spots were Administrative and Support Services, Information and Communication and Transportation and Storage. I'm wondering if the first two implies BPO work, because people I know who work in these industries definitely work more than just 53 hours per week, and does not include the possibility that night/graveyard shifts. I can believe the long hours T&S which may include those driving public transport and those trailer trucks. My father used to drive buses going to the provinces, and we barely saw him, like once a month if we're lucky. 

Meanwhile, the last spots are occupied by Arts, Entertainment and Recreation, Fishing and Real Estate. Again, I'm wondering if AE&R include media production, which is classified as entertainment according to the BIR. People working in media (whether news or TV/movie productions) work far longer hours than 39 included in the survey, and most work on a per project basis. One is not assured of tenure. If lucky, one might get a contract renewable yearly, which features a "retainer's fee" that's more or less the equivalent of the minimum wage or an "allowance" for "brainstorming." Fishing and farming may be seasonal but definitely takes longer hours. 

Included in the bottom half is Education, which supposedly take "only" the traditional 40 hours per week. But it does not take into consideration that teachers and professors do course planning, class output checking, research, consultation with students, meetings and committee work, which together require you to put in more than the 40 hours stated here. If a teacher is tenured, then those hours are paid for by the institution one belongs to. 

Part timers are a different matter. PTs are only paid for classroom hours, or time spent inside the classroom actually teaching. But the real work is what needs to be done before you enter the classroom, and then the output that needs to be checked and graded. One is not paid for consultation hours, or the committee work or the meetings, etc. If one looks at most privately run Higher Education Institutions (HEI), the bulk of their faculty members (or Full Timers) are a mere 25% of the population, and yet whose rates are double those of PTs. The rest (a good 75%) are part timers who sometimes hop from one HEI to another just to make ends meet or make at least as much as the FTs. There is also the possibility that one school term one gets some teaching load or units and the next there's none. It's a precarious job. 

Sometimes it's difficult to look at these surveys, especially when you've worked in the industries mentioned and know the real hours involved aren't just those done at the desk or inside classrooms. 

Tuesday, February 6, 2018

Diving in the gig economy

Cliff diver David Colturi for Hugo Boss

Philippine Star business writer Iris Gonzales writes about the country's freelance economy, or those who live and work on their own terms. 

It's nice not having to do a 9-to-5, dread Mondays, work in your pajamas, or get stuck in rush hour traffic. Or if you really lucked out and a day's work can net you a million. 

Not everything is rosy in the freelance world though. You do all the things that a normal HR office would do for you: take care of your own taxes, get your own healthcare, save for your own retirement. You have to hustle for your next project to make sure you have a more or less steady income flow. 

But that isn't so easy when there's tons of competition out there, made more cutthroat by  the phenomenon apparently known as  diving, or "bringing down rates below industry standards to get more gigs."

I once had an acquiantance link me with a potential client, who wanted a relatively easy write up.  I gave a quote for the work. But then a quarter of an hour later, my acquiantance calls me up. Turns out the client was also talking to other people. Someone else, a single mother, offered to do the job for half the rate I quoted, and with unli-revisions. 

My acquiantance was embarrassed and apologized. But really, there wasn't anything we could do. How can you compete with someone who gave a basement bargain rate with the matching pleading words, "Please, I'll do anything because of my child." 

I understand her situation, but it really harms everyone else working in the industry if you lowball your own fees. Gonzales puts it best: "If nobody accepts low rates, employers hiring freelancers will realize that they need to pay more. Trust me, they can afford your rate because they’ve already saved so much as they don’t need to pay for health and other benefits." 

An article from The Atlantic looked at gig economies around the world, including the Philippines. There's a bit where a contingent worker from the PH is proud of having gigs that allow her to spend on necessities for her family on her own. On the other hand, there is that consistent problem of competition that necessitates lowering your rates--from $8 to $3.50!--just to get gigs. 

Gone is the world of permanence and tenure and unions and job security. What we have now are part time gigs that turn us into "service providers" and "contractors." But hey, we're our own boss, right? 

Friday, January 26, 2018

Part Time Life is the New Normal

A recent article from the Wall Street Journal reveals that the world’s biggest employers no longer sell things but rent workers. What this means really is that in the last two decades—basically my entire working life—the traditional employers and business hand over their tasks to “non-employees,” considered mere “talents” or “service providers” who are given lower pay and receive fewer or no benefits. 

According to the article by Lauren Weber: “For employers, dispatching work to outside companies saves money and lets them access skills they need without adding to their headcount. Workers in jobs that have gone to outsourcers, though, can feel moved around like chess pieces, either displaced entirely or re-badged as employees of a service provider, sometimes with fewer benefits and lower pay. A growing body of economic research suggests that outsourcing is a significant factor fueling the rise of income inequality in the past decade.”

This has happened in both industries I’ve worked in, even in government.

You’re considered lucky if you gain a contract that’s renewable every year, still subject for approval, and instead of a salary you are given what is considered “retainer’s fees.” If the project you’re working on does not make it to the finish line and or is shelved for some reason or another, then you would only get paid for that pilot and a “development fee” for everything else you worked for in the last year and a half. If the project gets aired, then you hope it runs for as long as it can. Otherwise, you get only the minimum of and get paid for 13-16 weeks. 

Then back to development hell. It’s possible that you or your group of creatives don’t get another project, in which case you are floating and hoping to get a slot in another team, which is harder because there are a lot of people who do not have active projects and hoping to get that “extra” revolving, free for all slot. It's feast or famine, boom or bust. This is mainly the reason why I decided to leave and go back to that other industry. 

Where I work now, the practice is that the bulk of the force is comprised of part-timers. Like in my current office, there are less than ten full timers (FTF) and over a dozen or so part-timers (PTF). A PTF carries the same maximum work load as an FTF, but the rates are half of what a full timer gets, no benefits and no healthcare— although you have the option to get it as part of the collective and pay for it yourself as a salary deductible over 3 months or so. 

If circumstances dictate that less part-timers are needed, then we get less load. Current circumstances in this industry dictate that there will be less load in the next 3-4 years or until 2021-22, with this year and 2019 being the hardest hit. In my other previous non-employer (the College of Rich Kids, aka Cork), you don’t even get to know if you’ll get a workload until the very first day of work. So if you’ve been counting on that and get nothing, well good luck. It’s for this reason that a lof of part-timers work at more than one job—sometimes as many as three or four. 

My current non-employer manages things a bit differently. CNE makes sure that all the PTFs will have work, even at a reduced load. Most of the PTFs are farmed off to another area of the industry, which is not what we're trained for, but gives us work that will sustain us through these lean years

You are not an employee, and who you work for is not your employer. Yet you do regular time, you follow their rules. Everywhere in the world, this is the game now. The part time outsourced life is the new normal. 

Wednesday, January 3, 2018

Preparing for retirement with PERA

In a previous post, I looked at how the TRAIN would affect my take home pay. 

TRAIN promises to cut the withholding tax. From my previous effective rate of 32%, it will go down to ~9.2%. That savings will go a long way to fund my retirement. So while it might be tempting to use that "free" money to live the best life now, I'm opting to invest it for my best life in the future. 

Although I contribute to the SSS--it is mandatory, after all--I'm giving it the side eye. For one, there's the talk that the SSS assets would be depleted in 28 years if crucial reforms are not implemented. Which means the SSS is possibly not  around by the time I'm retiring. So I thought I should prepare for that bleak future scenario. At any rate, no one should be counting on just the government pension. I mean, the minimum pension right now is pegged at Php1,200. Who could live with just that money? 

Anyway, I was still working in government when the PERA law was approved in 2008, but implementation is another matter. There was buzz in 2016 that it would go live, and it did in December 2016. But the only two approved entities--BDO and BPI--only had mentions of it but no actual product yet. 

Even before the approval of the TRAIN, I was already thinking of seriously saving for retirement. In the international (mostly American) finance blog circles, it's all about ETFs or index funds. So I was looking at index funds. And then I thought of PERA to at least get a 5% tax credit for saving.  

I made inquiries with BPI already. I knew from other posts that one has to go to the head office to open a PERA account. However, when I checked with the BPI website, this FAQ states that starting January 2017, there should be several branches aside the main office that could facilitate opening a PERA account. I went to my local branch to ask if that policy had changed. The girl at the accounts desk called the head office to confirm and to ask for the requirements as well. 

This is how you open a PERA account with BPI: 
  1. Yes, you need to go to BPI's main office in Makati. Go to the 17th floor, Assets Management. 
  2. You need to bring your TIN ID. In the event that you don't have an ID, bring your ITR as it would have details they need to open a PERA account. 
  3. You must have a BPI savings or checking account. 
  4. a valid government ID. 
  5. Fill up their form, which gauges your investment risk profile 
BPI offers 4 kinds of PERA accounts, which are very similar to mutual fund or UITF offerings. They have a money market, government bonds, corporate bonds and an equity fund. 

Of course, there are fees: BPI asks for a 1% administrator fee based on the amount contributed. There are also "transactional and annual fees from the Cash Custodian as well as trust fees from the respective PERA UITFs." The Equity Fund lists a 1.5% per annum trust fee. I wonder if this is the same as or probably on top of the 1% admin fee. 

Meanwhile, BDO's PERA Equity Index Fund lists a 1% p.a. "management fee." Again, will need to clarify if this is on top of or the same as the admin fee. But I still need to inquire with BDO.  

If we go by fees alone, I'm partial to whoever is offering a lower fee. Then there's the matter of who offers an index fund. There's also the ease of transacting. BDO is attached to my payroll account, that would make it easier for me to transact. That matter of only having one administrator for your PERA accounts certainly has to be considered. 

All in all, I still need to check with BDO and then weigh which one between the two banks will get my retirement money. But even then, BSP Deputy Governor Espenilla acknowledges that the slow rollout is because there are only ~100 professionals dealing with PERA.  It would certainly give the investing public more breadth of choices if other entities would come in and offer their own PERA funds. Until that day comes, it's a coin toss between these two candidates. 

Tuesday, January 2, 2018

How to Ride the TRAIN with reservations

The gift that keeps on giving. You do you, Alma. 

The first part of the Tax Reform for Acceleration and Inclusion (TRAIN) was signed into law in December of last year. Its main selling point was that those earning Php250k annually will no longer have to pay the income tax. While a lot of people find this a cause for celebration. 

Like Alma Moreno, I still have my own reservations about this whole exercise. I do recognize that we will have a bigger take home pay, but I also know that we will be taxed in other ways. Like the price of anything that uses oil or sugar will surely go up. Hello, fare hikes and no more unli-softdrinks. (Not that I'm a big fan of soda, anyway.) 

But I want to look at this positively, so I want to focus on how the TRAIN will make our take home pay bigger. Every year around tax time, I just grind my teeth at how much tax the government takes away. I mean, it's fine if you see that social services are efficient or that government officials are competent. Just knowing that your tax money goes to someone else's already deep pockets and yours are butas, that's just a major bummer. 

In the pre-TRAIN tax regime, I get taxed ~25-32% because I am single, have no dependents, and earn from multiple compensation. A part timer is only allowed a maximum of 12 hours a week. So if I work for 4.5 hours a day, I only get 3 hours because the 1.5 is already eaten up by taxes. Your payslip may show that you get a sizeable amount, but the reality of what shows up in your ATM is another matter. A third of your salary is no laughing matter. Because in a year, that amount balloons to more than 6 digits. Monthly, it's enough to pay an amortization for a condo or a house. But in reality, I can't even qualify yet for a housing loan--I'm a part timer, and my salary is under 50k. So yes, a bummer. 

Photo courtesy of ABS-CBN reporter Alvin Elchico. 

In the new TRAIN Revised Withholding Tax Table, my income category falls under the 30k + 25% of the excess over 400k. Which means roughly my annual income tax will now fall under 50k, which is a whopping reduction coming from around 3x that amount. From a condo amortization, pambayad na lang ng parking---kung may kotse ako. Eh wala so nganga. Hahaha. 

But seriously, if the tax computation table is indeed true, that is an additional 7k or so to the monthly take home pay. 

What to do with this "free" TRAIN money? 

Not going to spend it on #travelgoals, that's for sure. Will most likely funnel it into a retirement account, aka the long delayed PERA. 

As for which entity and fund, that will come in another post. 

Wednesday, December 27, 2017

Ang Larawan: Can investing in art be a valid retirement plan?

The MMFF entry "Ang Larawan," (Dir. Loy Arcenas, 2017) which was based on the musical, which in turn was based on the play by Nick Joaquin and translated by Rolando Tinio,  poses quite a financial situation still relevant to a lot of Filipino families. How does one prepare for retirement and old age, particularly if one is (a) an artist and (b) a single and unmarried female dependent on other family members. Of course, there is also the question of how Pinoy society values art. But at the moment, I'm interested in how can art be a vehicle for retirement. 

The painting in contention was created by Don Lorenzo El Magnifico, supposedly a contemporary of Juan Luna. He crafted an obra maestra in his old age, and mostly everyone observed that The Portrait of the Artist as Filipino did not appear to be Pinoy at all in terms of imagery. It showed a scene from Virgil’s Aeneid: Aeneas carrying his aged father Anchises away from the burning city of Troy. The painting was said to be a self-portrait: it was effectively a young Don Lorenzo carrying his old self away from destruction.

After painting this obra, he suffered an accident—fell from a second storey window and down into the courtyard. He was checked by all the doctors and nothing was wrong with him, and yet he refused to leave his room. 

The painting got people interested in an old master that they thought was already dead. A Frenchman raved about it; an endless stream of students, journalists, photographers and critics trooped to the Marasigan house to view the painting—much to the consternation of his two old maid daughters Candida and Paula, to whom he has bequeathed this masterpiece. 

Similar subject by Italian painter Pietro Testa. 

The daughters face a difficult situation: they are dependent on padala of their two elder siblings Manolo and Pepang for their expenses and the house’s upkeep. Candida and Paula have even taken in a boarder whom they despise: Tony Javier was a vaudeville piano player. Unschooled but ambitious, rakish and brings home rowdy women, drinks chocolate lecherously from someone else’s cup. But his rent brings them money, so they tolerate him. 

But even that doesn’t seem to be enough as Candida and Paula do not have enough to pay the bills from the kuryente, the tubig. The sisters have a plan: Candida considered a newspaper ad where one would get paid to catch and kill rats just so they could pay bills. Paula could put up a signs outside the house announcing that she could tutor females how to play the piano, and males on how to speak Spanish—frankly a skill that was disappearing in 1941, on the edge of a war and a Philippines that has been under American rule for decades. Manolo and Pepang didn’t like this plan: they asked the sisters to take down the signages outside the house (Nakakahiya!). They planned to sell the house, take the furniture for their own children who are about to get married and start families of their own. What’s worse is they planned to separate the women, take one each to care for their own households. Such is the fate of dependent elder unmarried women at the time. 

The one thing that could save Candida and Paula from financial ruin was The Painting which their father told them to do as they pleased. Tony Javier has a ready buyer, an American willing to pay $10,000 plus his commission for convincing the sisters to sell. The sisters are unwilling, but Tony lists all the things even he could do with his own commission: go wherever he wanted, to go to Europe, to South America, finally formally study the piano, breathe in some culture. It would buy him decency away from his very precarious situation. 

Tony Javier enticed the sisters with this possibility of financial freedom, of no longer worrying about the bills, what the neighbors would say, doing whatever he wanted without fear. All this for ten thousand dolares in exchange for a painting done by their dear old dad. So a question: How much was Don Lorenzo El Magnifico's painting worth? Can art be a valid nest egg for retirement and financial freedom? 

In the movie, the price of the painting was $10,000 in 1941, which was something like Php20,000 at the time. So there was a 1:2 ratio in the exchange rate. I tried to find out what the painting could cost now. computes for inflation using US CPI data. I plugged in $10k in 1941 and that amounts to $172,216.04 in 2017. At the current exchange rate of Php49.94:US1, it means that $172,216.04 (49.94) = Php8,600,469.04. 

Ronald Ventura's "Grayground" was sold for nearly Php47M.

Php8Million for the work of an old Philippine master seems like peanuts. It should cost more, specially taking into account that even relatively young Philippine artists are topping out at USD1Million per work. There’s Ronald Ventura’s “Grayground” for Php46.9M or Geraldine Javier’s “For She Loved Fiercely” which sold for HKD 1.46M or Php8.8M. A Fernando Amorsolo painting done in his prime sold for Php20M at an auction. National Artist BenCab’s “Sabel” fetched Php20M. The biggest “Sabel” was priced at Php46.7M.

For comparison, I looked up the price of a Juan Luna painting in the market. That same article which sold the “Sabel” mentioned an “untitled Luna” featuring a lady dressed in the fashion of the time sold for Php14M. Perhaps the most controversial Luna piece in recent memory was “Parisian Life,” which was purchased by the GSIS at an auction in 2002 for Php40M. It caused an uproar at the time, and for which the GSIS caught flak for “wasting the public’s money” for an artwork. But the painting is now valued at Php300M, which was 650% higher. 

Juan Luna's "Parisian Life," bought by GSIS for Php40M in 2002.

In the film, Manolo and Pepang brought in the women’s godfather, a senator of the republic, to convince them to sell the painting to the government. It seemed like an echo of the government trying to buy the painting to preserve culture and memory, and at the same time, the sisters could have funds to care for themselves.

Juan Luna's "Espana y Filipinas" was worth Php156M. 

Don Lorenzo’s self-portrait was smaller than Luna’s “Spolarium" but bigger than “Parisian Life.” It should be priced similar to a rare Luna "¿A Do...Va la Nave?” that sold also at a bidding for Php46.7M or to a version of "Espana y Filipinas," which was auctioned off for HK$25.88 million or Php156.52 million. 

At its bare minimum, the work of an old master who was Luna’s contemporary should be priced in the vicinity of a “rare Luna” at Php8M minimum, to an intermediate price of USD1M similar to a young contemporary auction star. Or if we follow the auction for old masters, a major work should fetch anywhere from Php46M maximum or Php156M.

So anywhere from Php8M, 46M or 156M. 

Even if “devalue” it by saying Don Marasigan was *not* Luna and slash the price by half, that would still be a decent Php4 to 20M, that should buy Paula and Candida a modest but secure retirement in their old age. But at 46M or 156M or even “Parisian Life” levels at 300M could buy them and their family financial security for generations. 


So is art a valuable and valid piece of investment for retirement? If it’s the work of an established master, yes. Just going by the appreciation of Luna’s “Parisian Life” from Php40M to 300M in 15 years is proof of that. Even a minor and rare Luna that sells for Php8 million is a godsend. But how many obras of old masters do we have lying around? 

If you are young and can go “speculative,” I would probably get a major work by a relatively young and upcoming artist and hope he does well in the future so that the value of my purchase could appreciate in the decades ahead. Better if he becomes a National Artist. 


All the hypothetical pricing seems wasted as Paula decided to destroy the painting so they could be “free.” As in start from scratch.  I could imagine Paulo Avelino's Tony Javier quaking in desolation as his future was destroyed just like that. But it wasn't his painting.  

Wednesday, December 20, 2017

How Wealthy Are You?

Here’s a stealth wealth/net worth revealing challenge if ever there is one: 

If you were to lose your job tomorrow, how long can you survive? 

I came across this from J. Money of BudgetsAreSexy, who picked it up from LifeAndMyFinances

This is a question that will be recognizable to those who work part time or are on perpetual “casual” employment contracts that get renewed on a term-to-term basis. I realize that I’ve been in this situation almost my entire working life: from the media job that subsists on getting projects lined up one after the other, to the government job that needs you to write a “renewal” letter at the end of each year, to the part time or adjunct academy circuit where people juggle at least two jobs at a time. 

Two words that are the source of unspeakable horrors: Lean years. This is something we all have to live with for the next 3 years at least. Where I’m at, there’s nothing that makes you more aware of your precarious work situation when the end of the term comes and you have not yet received your assignment or “load” for the next and will only learn about it on the day before you start. And even then, it’ll be a surprise as to how much load you’ll be carrying. In some places it’s not so bad, where planning starts in the middle of the term and you more or less know if you have to take on more gigs.

I think if you throw this question at most part timers, there’s going to be much agony and much scrambling to apply in other places. 

As for me, if I got called to the boss’ office and got told that there’s nothing for me come January, I don’t think I’ll panic. 


There are several things working to my advantage: 
  • I’m single and have no kids. 
  • I don’t pay rent. But I pay for household bills and expenses. 
  • I’m relatively healthy. 
  • I live frugally. 
  • I’ve built an emergency fund.
This last item I owe to a series of lucky breaks: 

Some years back, when all the talk about K-12 came up, the Posh School designed a plan where they will “front load” all the part timers—meaning give every one of their contractuals the full allowable work load as a way to save up for the lean years. That meant I had a few terms where I was getting double the usual work I had. 

Then I discovered that they’ve been computing my pay rate wrong. The accounting office used the entry level rate where I should be at another rate. So I received wage adjustments for a full year’s work. The bad part was that accounting gave it at one go so that’s a whopping 30%++ in taxes. That’s when I put that money in a brokerage account. 

Then I started at the Big School which allowed me to rack up some more savings. Then this year I let go of that original Posh School. 

But I recognize how lucky I was about those “front loading” terms and the miscalculation of wages which lead to me accidentally building an emergency fund. 

Plus, my entire work life I’ve been used to this boom and bust cycle. After getting paid for a project, I tend to hoard it because I know that the next pay cycle is going to be a long ways down the road. Setting up a new project or getting a new gig takes time, and one must allocate her resources a bit more sparingly. 

To answer the question, just how long will I last if I lost my job tomorrow? 

From Budgets Are Sexy

Provided that I maintain my frugal ways and don’t have to pay rent, then I can live 6-9 months on emergency funds. 

If it’s really really tough and I have to rely on my entire net worth, then it could be upwards of three years. 

It's not much. As someone who knows what it's like to be really poor, it is a whole lot better. 

I suppose my only regret is that no one told me that money shouldn't really be sitting in a savings account. Otherwise, maybe I have a shot at joining the super elite ultra-wealthy category. But as they say, there's no better time to start investing than today. 

From those other blogs, that qualifies me under the “wealthy” category, although I can assure me that I don’t really feel wealthy. I don’t really own a lot of material things, save for a few gadgets like a laptop, a tablet and a phone—things I need to work. Other than that, I don’t really “own” anything.  If a thief broke into my house, I think they’ll be very disappointed to see boxes of books, some clothes, a ton of paper and not much else. 

Doing this exercise somehow reassures me that I don’t have to run and pimp myself out as the world's worst hooker, or sell a kidney or two. But still, in these highly precarious times, we all need to have a Plan C. I’m already on my Plan B so I need a back up on my back up plan.