ABUC Survey on Sales of Financial Products and Services in ASEAN

1
ABUC Survey on Sales of Financial Products and
Services in ASEAN

• Philippines

Presented by Jose P. Umali, Jr. National
President, National Union of Bank Employees
(NUBE-PH)
2
Responsible lending selling

• Importance of the Issue Topic is important in
  the light of the 1997-98 Asian financial crisis
  and todays global financial crisis
• Union Campaign on the Issue UNI-PLC, NUBE in
  particular, has been campaigning against
  unbridled financial deregulation especially
  GATS-type liberalization
• Deregulation/liberalization at the root of
  unproductive and risky behaviors that lead to
  bubbles and crises
• Campaign done through position papers, seminars
  and social dialogue with appropriate government
  agencies (thru the Banking Industry Tripartite
  Council) and, often, in alliance with civil
  society organizations like the Fair Trade
  Alliance

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Conditions of employment

• Many banks pushing for performance-based or
  productivity-based pay
• But with no or little consultation with unions
• Issue has become a long-running irritant between
  the banks and the unions
• Clearly beneficial for banks but not for
  employees
• Unions prepared to support productivity programs
  but under fair and consultative conditions
• Employees training to enable them to give
  qualified and professional advise. Senior bank
  officers and account executives get training but
  the quality of the training is difficult to assess

4
Legislative framework

• Existence of legislative framework or CoC on
  responsible sale of financial products. Central
  Bank requires bank managers to go thru CSR and
  Code of Conduct seminars
• There are existing law restricting transactions
  among director-members of banks
• Observance of the law and the CSR/CoC is another
  matter
• Codes of Conduct are voluntary
• There is no clear mechanism in place to ensure
  implementation of CoC

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Legislative framework

• There is no consumer or banking ombudsman. But
  some banks have so-called independent directors
• Assessment of legal provisions on responsible
  sale of financial products. Selling of financial
  products is supposed to be well regulated because
  the Philippines experienced a series of financial
  crises (early 1970s, early 1880s, late 1990s)
  but
• Some non-banking financial institutions have
  escaped regulation and scrutiny and have caused
  widespread havoc in the lives of some investors
  and clients (e.g. pre-need products like
  education plans)
• Some rural banks oversold their assets to
  different institutional and individual
  buyers-investors

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Best Practices

• Companies exhibiting best practices. Banks where
  NUBE has unions or where the bank has good union
  relations are also responsible banks (e.g. Banco
  de Oro, Metrobank)
• Companies showing poor practice. Some rural and
  smaller banks have escaped the scrutiny of
  Central Bank and got away with questionable and
  shady financial transactions.
• A number of insurance and pre-need companies
  encountered bankruptcies or liquidity problems
• No union member has been question by customers or
  the authorities on sale/promotion of questionable
  financial products.
• There are discussions among monetary authority
  regarding the strengthening of regulation
  concerning financial products. However, NUBE
  still has to be given copies if there are formal
  guidelines on this