Knowledge comes by taking things apart: analysis. But wisdom comes by putting things together.

John A. Morrison

The fear of the LORD is the beginning of wisdom,
and knowledge of the Holy One is understanding.

Proverbs 9:10

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Elijah Offering Video from Elevation Church on Vimeo.

In a few months we will finally say goodbye (hopefully) to the 2nd longest serving President of the Republic. Just how good or bad did GMA perform? Let’s try to look at this on a more objective manner…

The Bad

Corruption has really gone berserk in this administration. While corruption has been ingrained in our society, GMA’s mark for her administration’s record in the area of corruption is, well let me borrow the youth’s language here — ‘Epic Fail’. Her ability to rally the country has always been smeared by allegations of incredible graft and corruption.

The Good

Improvements in the economy. I’m not a GMA fan but we need to give where credit is due.

When GMA took office in 2001, here’s the situation:

Inflation at 7.5 percent; the balance of payments (BOP) was at $2.02billion;the ratio of external debt to gross domestic product (GDP) or how much of the country’s total goods and services annually go into servicing the debt, 72 percent;  unemployment at 20 percent.

As GMA ends her term, here are the marcroeconomic stats:

Inflation at about 3.0% percent; the Balance of Payment stands at $5 billion; external debt to GDP ratio is down to 34 percent; and unemployment level is about 7%.

There are many areas that she still failed in the economics arena such as substantial and sustainable GDP growth; too much dependence on OFW remittances; a fiscal policy that needs to usher real country-side growth, the trickling of economic growth to the masses, etc. But, GMA inherited the country in a really bad shape and the improvement in the economic forefront is definitely a blessing.

GMA would probably come down history as one of the most unpopular Presidents we ever had… but history should be fair to her and us Pinoys should really give credit where credit is due. I am not saying we should forget all the ‘corruption’ attributed to GMA’s administration but we should also remember the good she has done.

I know many people will really disagree with me but I believe that all leaders are anointed and God allowed them to lead to serve His purpose, regardless if they cheated or not or whether they deserve to be in power or not . The Bible is full of stories on how God uses leaders, the good and the bad ones, for His purpose. We just need to see the bigger picture of things, I suppose. Let’s look at Philippine Presidents in this case:

1) Marcos – the country was in chaos, the nation needed to be disciplined. We needed an iron-fist at that time, like a child needed a spanking. Marcos was the perfect guy to do that.

2) Cory – it was time to bring back civil authority to the country and putting an inexperienced widow to thwart a well-entrenched dictator was a strong lesson on humility; further, God honored our being peace-lovers by giving us an unprecedented bloodless revolution.

3) Ramos – the country was already ready to experience growth; we were like a young nation once more and we were ready to spread our wings and try flying again; God put a non-catholic leader in a predominantly catholic nation to tell us that He was God of all and that faith is what is needed, not religion.

4) Erap – with the economic growth came arrogance; the masses were being neglected – people were more concerned about travelling outside the country, condominium units and golf courses. Erap was a big insult to the moneyed elite and the intelligent middle-class; he won by one of history’s biggest margins.

5) GMA – The previous administration left the country in turmoil in a very short period of time; the country needed a hard-working leader who was able to do the tough things that needed to be done and things that men are not willing to do.  With all her faults and criticisms, GMA was probably one of the country’s hardest working leader – her work ethics are unbelievable and her dedication to productivity is something to be admired.

What will the next President’s role be? Not sure, but I know God will use him as He uses all to serve His purpose and according to His will which is good, pleasing and perfect (Romans 12:2).

We expect too much from the government and we expect them to promise too much. Read Pastor Dennis Sy’s enlightening blog on why the government is failing.

CLICK HERE to read the blog.

If you are going through some trials at this moment, I hope this blog can be of some help to you.

People will go through trials — I personally look at trials as tests. When you know that the trial you are going through has a purpose, it makes going through it a little easier.

So why does God allow us to go through difficulties? Here are 3 probable reasons:

1) To accomplish His intentions – God has a bigger plan for us, beyond our comprehension and understanding. We only see things from our own perspective and find it difficult to see what’s in store for us. Read Genesis 45:5-8.

2) To develop our character – Here’s something to really think about: Growth is a painful process. The best teacher is experience and painful experiences either mold us or break us. Read Romans 5:3-4.

3) To discipline His children – if we don’t get the message right and we don’t heed the warnings, we need to learn the hard way. Read Hebrews 12:6.

The next time you go through some trials, smile! God has a plan for you and He loves you!

…con’t.

Aside from its primary function, property and casualty insurance also has other functions.

It stimulates business enterprise—Insurance has made possible and helps maintain the present-day large-scale commercial and industrial organizations. It enables them to use their capital in the development of their business and obtain financial security against risks, instead of freezing business capital just to guard against various contingencies. Because of reduced risks also, capitalists are able to venture into other projects.

It stimulates business efficiency—Since businesses can worry less about losses, they can concentrate more on the prosecution of their business.

Promotes loss prevention—Insurers allow taking risks from well-maintained and quality machineries, equipment or properties.

Investment of funds—Insurers accumulate large funds and these are invested in the economy. Moreover, the funds of business enterprises do not remain static but are used productively, resulting in lesser premiums. Moreover, the process produced by business is reduced, benefiting the public. Although cost of insurance is integrated in the prices of commodities, the amount is significantly lesser than the amount without insurance.

Basis of credit—Credit extension is the most important phase of modern business and is contributed to by virtually all forms of insurance. Thus, in the case of a mortgage upon a real estate, no mortgagee is willing to lend money unless he knows that the value of the property is protected from destruction.

Surely, the foundation and purpose of property and casualty insurance is really much more complex that what was explained here. One also needs to understand about risks and hazards to be able to have a better appreciation of insurance.

Risk is the chance of loss. If a loss is absolutely certain to happen, no risk is involved. Peril is the contingent or unknown event which may cause a loss. The peril is that which is insured against because without such peril, the risk is absent. Examples of perils are fire, flood, accident, theft, illness, etc. The insurance company can choose what perils it will be willing to except the insured from. This is what is also termed as insurable risk. But risks, to be insurable, must meet certain requirements:

Importance—The loss to be insured against should be grave enough to support a contract of insurance. Not all losses would have to be insured. The object must have some economic value, so that losing it would put the insured in some degree of pecuniary disadvantage.

Calculability—The loss must be possible to estimate as to its probability. This is particularly important in order to determine the amount of premium and the amount to cover, so as to protect the insurance industry.

Definiteness of loss—The losses should be fairly definite as to cause, time and place.

No catastrophic loss—This is against the law of large numbers. When large numbers of people are subject to the same kind of losses at the same time, insurance becomes a risk-accepting business rather than a risk-distributing device. The losses of the few are no longer borne by the many who did not suffer a loss. Only small occasional losses are insurable.

Accidental in nature—Insurance is intended to cover accidental or unexpected losses. If the loss is not accidental, sudden or unexpected, there is definitely no risk. Payment made to a party whose loss is expected is contrary to public policy and morals.

The perils that conform to these requirements are proper for supporting an insurance contract.

Hazard, on the other hand, is the condition or factor, tangible or intangible, which may create or increase the risk from a given peril. Hazards are what create a peril, which, in turn, creates a risk. In the insurance environment, hazards are:

Physical hazards—those relating to location, structure, occupancy, exposure to the surroundings and other similar things like inherent vices that make the thing very susceptible to loss.

Moral hazards—those relating to the mental attitude of the person.

Morale hazard—pertains to the attitude or character of a person.

Whew, this blog has turned out to be a mini-lecture on the fundamentals of insurance. Since we pay good money to get such insurance, isn’t it about time we start understanding what we have been paying for all these years? I think so.

MANY of us have some form of property and casualty insurance, or more commonly referred to as nonlife insurance. We probably have motor-car insurance, fire insurance or personal-accident insurance. However, I dare say that so many of us who do have some form of coverage are not really aware what this form of insurance is all about.

When you compare life insurance and property and casualty insurance, you will notice that the only thing similar with them is the term “insurance.” Let’s try to demystify property and casualty insurance.

So what is property and casualty insurance? Property and casualty insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event. The definition is clear about how property insurance operates. For the insured, it means that the agreement is merely to help him recover what was actually lost due to the unknown or contingent event. A contract of indemnity is therefore exclusive to property insurance.

Why is there a need for this type of insurance? Well, for starters, it really is a risk-distributing device. A person puts money called premium to a common fund and distributes his risk to the group. There is no way for a person to know in advance whether he will receive compensation more than he has contributed or that he will be merely paying for the loss of others.

The primary goal of a person getting insurance coverage is to assure himself that he will not shoulder the loss alone. He may gamble, take his chance that he may be able to steer his property away from a loss and its devastating effect. But putting a minimum amount, and considering that such amount is the only sum he is bound to lose in case a loss actually occurs, is the logic behind getting protection for your property. However, it is unfortunate that most Filipinos still cling to his fatalistic philosophy of bahala na. When the loss happens, it is already too late.

Risk is an everyday reality. This is the reason people make calculations instinctively to avoid risk. They forget that their own negligence (lack of foresight, lack of skill to prevent loss) is the paramount reason why property insurance is there in the first place.

… to be continued.

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… con’t.

2. Gathering client data, including goals.

The financial planner should ask for information about your financial situation. You and the planner should mutually define your personal and financial goals, understand your time frame for results and discuss, if relevant, how you feel about risk. The financial planner should gather all the necessary documents before giving you the advice you need.

3. Analyzing and evaluating your financial status.

The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

4. Developing and presenting financial planning recommendations and/or alternatives.

The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate.

5. Implementing the financial planning recommendations.

You and the planner should agree on how the recommendations will be carried out. The planner may carry out the recommendations or serve as your “coach,” coordinating the whole process with you and other professionals such as attorneys or stockbrokers.

6. Monitoring the financial planning recommendations.

You and the planner should agree on who will monitor your progress towards your goals. If the planner is in charge of the process, she should report to you periodically to review your situation and adjust the recommendations, if needed, as your life changes.

In the Philippines, the leading organization for Financial Planner certification is probably the Registered Financial Planner Institute, a local chapter from Ohio, U.S.A. There are about  400+ individuals who have taken the program since its inception in 2005 in the Philippines. The program boasts of several comprehensive programs on Financial Planning, Investment Planning, Insurance Planning, Estate Planning and more. The local chapter also boasts of several well respected and credentialed moderators who are University Professors, Columnists, Best-Selling Authors, Corporate Executives, etc.

It is always best to check out your financial planner. Is he credible? Does he have the credentials? Does he have the necessary experience? And more importantly, does he have the right character as trust is the most important foundation in a planner-client relationship.

Be careful in choosing a financial planner but don’t dilly-dally in getting one, it really is a wise decision to make.

“The wisdom of the prudent is to give thought to their ways, but the folly of fools is deception.” – Proverbs 14:8, NIV