Insurance

Media

Part of The American Chamber of Commerce Journal

Title: Insurance
Language: English
Source: The American Chamber of Commerce Journal Volume XXIV (No. 12) December 1948
Year: 1948
Rights
Fulltext: Unlisted commercial stock traded during the month included: 12 shares Atlantic Gulf and Pacific Co. at P350; 38 shares Batangas Transportation Co. at P220; 260 shares Jai Alai Corporation at P17 and P16, closing at P16; 1,000 shares Manila Jockey Club at P2.05; 200 shares Philippine American Drug Co. (Bo tica Boie) at P133; 50 shares Philippine Trust Co. at P70; and 505 shares Victorias Milling Co. at P135 exdividend. Credit By W. J. Nichols Treasurer, General Electric (P.I.) Inc. LAST month we commented on the unnecessary use of collectors for picking up checks that could easily be sent through the mails. We have been discussing the matter with several of our associates in other businesses, and everyone seems to be in agree ment that the whole system of presenting bills for payment and effecting collections in the Philippines is outmoded and should be modernized. The present system, aside from being inefficient and expensive, is wide open to abuses. It is frequent ly used as a device for delaying payment as long as possible. Collectors are often required to make several calls at one location before finally obtaining settlement of an account. The usual excuse is that the invoices are being checked or the cashier is out at the moment. Some business firms, for reasons best known to themselves, prefer not to maintain bank accounts but to make all payments in cash. However we see no reason why such establishments should not be re quired to deliver payments when they become due rather than to wait until a collector calls. We believe there are several steps which might be effective in reducing the necessity for collectors. A great deal would be accomplished if each manager reviewed the routines in effect in his own office to determine whether the methods of auditing and pay ing invoices are efficient. The granting of discounts for payments made before due dates, is another device which might be helpful. This practice is rather wide spread in the United States but is used relatively little in the Philippines. The sending of notices to customers and vendors to the effect that all payments are to be made by mail, should also serve to reduce the need for collectors. The Association of Credit Men, Inc. (P.I.) has recently recognized the need to revamp our oldfashioned collection methods and it is hoped that in the near future a campaign will be undertaken to solve the problem. Insurance OPEN LETTER to Members of the Senate and Congress, The Mayor and People of Manila Dear Sirs:—During this year several bills have been submitted to Congress affecting insurance com panies—some were very rightly disregarded, but the arguments against others were not so obvious and therefore received consideration. However, the fact that such bills were drafted points to a lack of un derstanding of the principles of insurance, and there fore companies transacting this class of business feel that these principles should be presented to the public to prevent legislation which would ultimately react to their detriment. The whole function of insurance is to “distribute the losses of a few over many,” and for this purpose the companies act as trustees for their policy holders. It follows therefore that any legislation which is dis criminatory against insurance companies, reacts on the policy holders, and therefore in voicing our pro test, we are endeavoring to protect the interest of the insuring public. The matter of immediate interest is House Bill No. 1350, which was passed by Congress and became Republic Act No. 280, without any opportunity being given for insurance companies or the insuring public to present their case. By this Act the Municipal Board of Manila is empowered to pass an ordinance whereby fire insurance companies will pay to the City a tax of Vi % on premiums derived from policies issued on properties situated in Manila, for the pur pose of providing equipment and upkeep of the Ma nila Fire Department: it will be seen therefore that it is suggested that the “protection of the many should be paid for by the few” whereas in actual fact the uninsured are more interested in fire protection. The proposed ordinance has received considera tion and has been approved in principle by the Mu nicipal Board, but we trust that we will be given a hearing before the ordinance is passed. For this pur pose the following Memorandum of Protest has been drafted:— (1) The Manila City Fire Department operates for the benefit of all residents in Manila, and therefore the entire unkeep of this Department should be borne through taxation by the whole community. There is no justification for the view that part of the cost of the Fire Department service should be met by a contribution from the insurance compa nies. (2) The cost of such a contribution, as proposed in the Act, would necessarily fall on the insuring public and would then lead to a position whereby a service which is available to all is subsidised by one section of the community which is prudent enough to insure, and not by the other and less pru dent section which does not insure—a position which is clearly indefensible. (3) Insurance companies are at present paying a Pre mium Tax of 1% to 3%. A Stamp Tax of l-^%, paid by the insured, is also levied on all policies of insurance. In effect therefore the present proposed tax of would result in an addition to direct taxes already borne by the insuring public and insurance companies. We respectfully submit that in our opinion the present taxes should be more than suf ficient to provide funds for the equipment and upkeep of the Manila Fire Department. (4) We submit that were this ordinance to be enforced it would be descriminatory against fire insurance compa nies, in corroboration of which argument we quote the fol lowing extract from a report by a Royal Commission on Fire Brigades:— * “So far as any question of principle is concerned there appears to be no more reason for the Fire Department of an Insurance company to subsidize Fire Brigades than for the Marine Department of subsidize light houses or the Burg lary Department to subsidize the police.” To illustrate the injustice which such a tax would have on the insuring public we quote the fol lowing figures from the Manila Fire Department’s latest report:— "FIRE LOSSES ON AUTO-TRUCKS. BUILDINGS. AND CONTENTS Auto-Trucks Buildings Contents Total 1. Value of Property Involved ... P373,150.00 P14.172.078.00 P18.449.703.79 P32,994.931.79 2. Value of Insurance thereon .... 111.000.00 5.511.360.00 4.716,500.00 10.33S.SG0.00 from which it is reasonable to assume that approxi mately one-third of the property in Manila is insured, and yet it is suggested that prudent owners thereof should pay for fire protec tion for those less prudent who own the remaining two-thirds. REAL ESTATE SALES IN MANILA, 1940-1948 Prepared by the Bureau of the Census and Statistics Note: A large percentage of 1945 sales and a diminishing percentage of 1946 sales, re present Japanese Occupation transactions not recorded until after liberation. We trust that in view of the thoughts presented in the above paragraphs, that the Municipal Board will give consideration thereto. Manila Fire Insurance Association Manila, November 26, 1948 1940 1941 1945 1946 1947 1948 January . February March . . April . . May . . June . . July . . August . September October . November December P 6,004,145 918,873 1,415,246 883,207 403,866 542,187 1,324,861 1,905,828 1,141,114 993,103 938,416 1,504,004 P 962,970 779,783 1,532,104 988,380 1,129,736 598,431 559,742 1,239,414 815,112 1,182,678 858,235 (?) P 7,943,605 P 4,385,011 1,337,830 2,267,151 (?) 2,622,190 213,262 1,916,293 962,008 3,684,937 1,212,780 3,637,956 1,123,565 4,974,862 699,740 4,438,510 1,870,670 4,698,896 2,096,893 5,545,800 2,555,472 3,340,384 2,874,408 4,025,926 P 6,030,012 7,217,317 7,166,866 8,611,076 4,618,181 3,988,560 4,097,183 5,627,572 7,437,213 6,083,486 P 3,644,734 3,879,633 4,243,719 5,021,093 3,129,799 8,019,246 5,146,529 6,192,876 4,737,581 11,477,138 4,177,054 3,205,584 Total . . P17,974,844 P10,647,285 P22,890,133 P45,537,914 P68,260,104 P55,492,348 Real Estate By C. M. Hoskins C. M. Hoskins & Co., Inc. THE Manila real estate market for November has continued firm. Preliminary figures show total sales for November of P5,386,248, which is about P600,000 over the October figure, but under the pre vious nine months average. Prices continue unchanged at substantially higher than pre-war figures. Buyer demand is active, while sellers who have been holding out for excessive prices are beginning to make listings at figures ap proximating the market values. Assessed values are undergoing revision through out Manila, at substantially higher figures but gen erally far below market values, so that appeals are expected to be few in number. Commercial rental rates have eased slightly, which is attributed in part to the mortality among unsuccessful post-war commercial concerns, and in part to the suspension of business expansion plans in the face of the proposed import control regulations. Mortgage money continues less abundant, espe cially for large amounts. Private capitalists are now entering the mortgage market for 10% mortgages. Institutional mortgages, while funds were available, were generally placed at 6 % and 7 % • Electric Power Production Manila Electric Company System By J. F. Cotton Treasurer, Manila Electric Company 1941 Average — 15,316,000 KWH 1948 1947 January ........................... 27,301,000 17,543,000 K February ......................... 26,021,000 17,503,000 I March .............................. 26,951,000 20,140,000 L April ................................ 26,871,000 19,601,000 O May .................................. 28,294,000 19,241,000 W June ................................. 29,216,000 17,898,000 A July................................... 31,143,000 22,593,000 T August ............................. 31,993,000 23,358,000 T September ....................... 32,012,000 23,122,000 H October ............................. 33,943,000 * 24,755,000 O November ......................... 32,412,000 * * 24,502,000 U December ........................................................ 25,725,000 R Total................................................ 255,981,000 S * Revised ** Partially estimated Output decreased slightly in November largely because of the shorter month. The increase over November, 1947, was 7,910,000 KWH or 32.3%. BUILDING CONSTRUCTION IN MANILA: 1936 TO 1948 Compiled by the Bureau of the Census and Statistics from data supplied by the City Engineer’s Office. MONTH 193P 1937 1938 1 1939 1940 I 1941 I 1945 | 1946 1 1947 1948 (Value) (Value) (Value) | (Value) (Value) | (Value) | (Value) | (Value) | (Value) 1 (Value) January . . P 540,030 P 426,230 P 694,180 P 463,430 Pl,124,550 P 891,140 P _ P 1,662,245 P 3,645,970 P 6,571,660 February . . 720,110 479,810 434,930 1,063,050 1,025,920 467,790 — 2,509,170 3,040,010 3,270,150 6,827,005 March . . . 411,680 396,890 1,300,650 662,840 671,120 641,040 — 3,398,910 7,498,560 April . . . 735,220 659,680 770,130 1,029,310 1,139,560 962,420 408,640 462,020 3,125,180 8,295,640 7,370,292 May . . . . 400,220 670,350 1,063,570 740,510 335,210 1,496,700 3,968,460 3,904,450 5,564,870 8,570,410 June . . . . 827,130 459,360 754,180 809,670 542,730 418,700 2,444,070 5,898,580 10,217,840 July . . . . 302,340 691,190 756,810 495,910 357,680 609,920 1,741,320 3,062,640 9,875,435 7,771,487 August . . . 368,260 827,660 627,790 622,050 661,860 306,680 1,418,360 4,889,640 7,428,260 7,568,950 September . . 393,100 777,690 684,590 554,570 590,380 530,830 1,015,250 7,326,570 7,770,310 7,095,860 October . . . 663,120 971,780 718,190 645,310 738,700 699,040 639,030 4,630,550 6,747,240 5,368,800 November . . 460,720 320,890 972,310 461,580 485,100 315,930 1,364,310 4,373,390 7,088,283 December . . 648,820 849,160 503,230 1,105,910 333,490 67,553 1,605090 5,034,600 4,924,320 Total . . P6,170,750 P7,530,690 P9,280,560 P9,053,250 P8,234,460 P5,692,273 P12,186,150 P47,526,905 P73,907,248 74,860,864 Annual Average 514,229 627,557 773,380 754,438 686,205 474,356 1,015,513 3,960,575 6,158,937 436