Seafarers learn about benefits,
simplicity of saving
by JEREMAIAH M. OPINIANO
OFW Journalism Consortium, Inc.

MANILA – CRUNCHING numbers sounds like an odd way to spend a holiday, but a handful of vacationing seafarers who did so recently might have found it worth their while after all.
In a pre-departure orientation seminar (PDOS), seafarers and some of their dependents learned not just about the benefits of saving, but also how simple it might be for them to save as much as P500,000 (approximately $9,230) in ten months.

"I sensed that my $200 monthly allotments were not being managed well. That's why I brought my mother to this seminar, so that we both could learn how to save and spend wisely," one of the participants said. Sitting beside him, his mother could only smile in sheepish recognition of their shared shortcomings.

Similar recognition among other seafarers and their accompanying dependents pervaded the PDOS organized by private group Resource Catalysts Inc. (RCI), nongovernment Atikha Inc., and manning agency Internship Navigation Training Center (ISNTC).

The three groups have been staging PDOS for re-deployed and would-be deployed seafarers, focusing on the economic and psycho-social dimensions of overseas work. Forced saving is among the topics of this monthly PDOS for seafarers and their family members.

"Seafarers can easily save more of their earnings than land-based contract workers can, because they are working on ships," says Eugene Gonzales of RCI, a private firm that provides financial management advice to overseas Filipino workers (OFWs).

Answering a questionnaire titled "Financial Needs Analysis for Seafarers," 11 pairs of seafarers and dependents computed cumulative monthly expenses for both the seafarer at sea and his dependents at home.

Planning together to save a lot
The sharing of answers that followed revealed that if they plan together, seafarers and their families can really stretch their income through the simplicity of saving.
From his and his mother's computation, 24-year-old wiper "Ces" (not his real name) discovered he and his family can have a gross savings of P30,875 a month or P308,750 in ten months. A wiper is part of the ship's engine crew, helping in the cleaning, painting, and the maintenance and repair of the engine.

Subtracting P43,500 as expenses for his vacation between contracts, Ces and his family can get a net annual savings of about P265,250.

"Ron", another wiper, chewed on the end of his pen as he computed his projected expenses and savings, and those from the US$600 he sends to his family every month. By his calculations, Ron could save P183,700 over his 10-month contract, and be left with P123,700 after deducting P60,000 for his vacation between contracts. The father of four steals a glance at his wife sitting beside him, as she crunches numbers that covering their family’s household expenses.

Savings, naturally, can be higher if both the seafarer and the family member left behind earn a living. Since his wife is a housewife who takes care of four kids, but who has no outside income to add to the family resources, "Ron’s" net savings amount of P123,700 will dip it because it will have to cover the family’s household expenses.

For his part, 24-year-old "Joe" earns US$936 monthly, while his wife, an office employee, earns P25,000 a month. Adding the wife's salary to "Joe's US$400 monthly allotment, the couple can save a gross amount of P572,740 for ten months, and save a net amount of P387,440. The couple has no children at present.

"Family members or wives of seafarers, or of the land-based OFWs, for that matter, have no reason to stop working or not to earn any income here and be almost totally dependent on their dependents working abroad," Gonzales said.

If Filipino seafarers –who, according to government figures, remitted US$1.461 billion last year from their eight-to-ten month work contracts– learn to save and spend wisely, they can save thousands of dollars, enroll in pension plans, and make investments for their future, financial advisors told participants.

Plan spending and saving
The essence of spending and saving wisely, RCI chief executive Gonzales said, is planning. "Therefore, plan your spending and saving," said the development finance specialist. "Plan to save, and save before you spend."

Things that must be foreseen and budgeted for, advised Gonzales, include education for the seafarer and family members, house and lot acquisition, health/medical expenses, business investments, retirement, and even discretionary expenses such as treating family members or friends out to eat, and the seafarer’s onboard discretionary expenses.

"I think US$700 for our pleasure on board is not enough," another seafarer "Jun" remarked jokingly during the open forum of the financial needs analysis workshop. But Gonzales advised seafarers to plan even their blow-outs or other discretionary expenditures "if they don't want to see their money put to waste".

Control needed over spending and saving
Gonzales also told seafarers and their direct relatives to "control" their spending and saving, especially when the seafarer sends the money to the family. "When the monthly allotment is transferred to the recipient, the seafarer has no more control over it," he added.

"With due respect to our wives and parents who are here," Gonzales said, "open an 'allotee' account that will have two signatories, or one account for the recipient and a joint account for both the seaman and the family".

"I hope your wives and parents are not sensitive to this," Gonzales warned participants.
Seafarers were also advised to put their earnings into different financial instruments that can yield long-term benefits.

If seafarers put their money in a dollar-denominated time deposit here that offers four percent interest, and save US$5 or US$10 a day for five, ten and 20 years, Gonzales said the savings can range from a minimum of US16,248.97 (or P1.299 million) to a maximum of US$53,315.91 (or P11.779 million).

For a health insurance plan, all seafarers need to do is save a dollar a day "and they need not worry anymore," Gonzales adds.

Des Roseus, another financial advisor, whose husband once worked in Saudi Arabia, also advised participants to enroll in dollar-denominated pension plans.

"All you need to save is US$56.70 monthly," she says, for seafarers to avail of insurance plans worth US$2,000 to 4,000 at maturity, but which one can borrow against in the third year, at lower interest rates than those offered by commercial banks.

The earlier that a person gets an insurance plan, the higher will be the amount he can get, Roseus said. If one starts availing of an insurance plan at age 22, he can get US$10,483 at age 60, and US$12,754 at age 65. If the person starts availing of an insurance plan at age 35, he will get comparatively less, US$6,296 at age 60, and US$7,660 at age 65.

The most important factor for seafarers availing of these savings and investment instruments is the peso-dollar exchange rate, Gonzales said. The volatility of the peso against the dollar, current trends notwithstanding, affects the amount saved, and its peso value.

"All things taken equal, lamang ka pa rin pag dolyar (you still come out ahead betting on the dollar)," he added, in justifying the need to consider dollar-denominated plans.

Capt. Teodoro Moro of ISNTC, which deploys some 1,000 ratings and officers annually, said the seminar teaches seafarers proper financial management and saving. Since this seminar for seafarers and family members began in 2004, seafarers' cash-advance requests and loans from ISNTC have lessened, as well as their "problems with the wives", Moro asserted, without giving precise figures.

"We also hope to correct the myth that seafarers have a lot of money. Seafarers cannot even allocate money to take advanced courses for their career development," Moro added.

Saving nation
In a March 4 press release, the labor department said the Philippines deployed 229,002 seafarers last year (from 216,031 in 2003). They remitted US$1.461 billion in 2004, an increase of US$167 million from 2003.

Despite this, the Asian Development Bank (ADB) said the Philippines' savings rate still lags behind its Southeast Asian neighbors. "Its steep drop to 19.4 percent of gross national product (GNP) in 2003 reflects the weak public sector budget position and the current account surplus decline," the ADB said in its 2004 Philippines Country Economic Review.

This is where the expansion of savings in the domestic economy, says the Philippine Deposit
Insurance Company (PDIC) in its website, "should be enhanced as a necessary condition to boost capital formation and achieve sustained economic growth".

Participants think these all rest on making saving and investing a habit, such as what Bulacan native "Eman" did. From his ten seafaring contracts, Eman is currently reaping the benefits of his saving habits.

This electrician, who saved an estimated P242,000 from his contracts, now owns a house and lot, and has life insurance coverage, investments in pension and educational plans, and savings in bank accounts. end