Philippine Banking Culture Shock: Unsolicited Ready-to-Activate Credit Cards

After coming back home to the Philippines, I decided to open a bank account with Banco de Oro (BDO). I chose BDO because it has several branches and, in fact, there is one five minutes away from where I live. I first opened a Peso (PHP) account followed by a US dollar account a few months later. Since opening those accounts, my average combined balance did not exceed the equivalent of $3,000.

About 10 months after I opened the account, I was surprised to receive a ready-to-activate BDO credit card by courier. I did not apply for any such credit card. I had no intention of applying for any credit card since I am not currently working and these credit card applications require some form of employment certificate. I also still have active US credit cards that I can use.

In the US, it is common to receive offers for pre-approved credit cards in the mail, but one still has to complete an application and provide the required financial information. Receiving a pre-approved credit card offer does not guarantee approval.

The BDO credit card I received was ready to use after activation. It has a credit limit of PHP100,000. After a quick Google search, I read that this practice of sending unsolicited cards by Philippine banks has been explicitly banned by the Bangko Sentral ng Pilipinas (BSP):

BSP Clarifies Existing Regulations Prohibiting the Issuance of Pre-Approved Credit Cards

08.27.2014

The Bangko Sentral ng Pilipinas (BSP), in its Resolution No. 1055 dated 02 July 2014, approved the issuance of a Circular to clarify existing regulations prohibiting the issuance of pre-approved credit cards, pursuant to BSP Circular No. 702, Series of 2010.

The Circular seeks to clarify what constitutes pre-approved credit cards. A pre-approved credit card is an unsolicited credit card issued by credit card issuers to consumers who have not applied for such credit card. “Application” has likewise been defined as a documented request of the credit card applicant to a credit card issuer for the availment of a credit card. The intention and consent for the availment of the credit card must be clear and explicit.

The Circular enumerates the acts tantamount to the act of issuing pre-approved credit cards. These include unsolicited calls by the bank to its depositors informing that they already have a credit card from its Credit Card Department due to good standing as a depositor or sending of unsolicited supplementary cards and other cards with added features which are not in replacement or substitute to an existing cardholder’s initial credit card. Moreover, some credit card issuers sought to legitimize the issuance of pre-approved credit cards by contract stipulations on the issuance of additional cards depending on the credit consumption and the payment history of the user. This practice shall be discontinued by having the provisions of the Circular prevail over any contrary stipulations in the contract.

Again, I never applied for any credit card so BDO sending me this card appears to be a clear violation of BSP policy. I nevertheless decided to activate the card because the first-year annual fee is waived. I’ll cancel the card if BDO would refuse to waive the annual fee of PHP2, 400 for succeeding years.

I am of two minds about this incident. On the one hand, it is nice to get a credit card without going through the hassle of applying for one. On the other hand, it is disappointing to see that the biggest bank in the country is actively flouting BSP rules with seeming impunity. I know I can handle my credit properly. There are those who cannot and may quickly find themselves with piling debt.

My experience ordering from Newegg Global Philippines

I decided to purchase a monitor — the LG 27UD58P-B 27″ IPS 4K UHD monitor — from Newegg.com. It’s US list price at the time of purchase was $279.99. The PH price was PHP 15,053.99 for an effective 53.76:1 exchange rate. This exchange rate isn’t too bad and it appears that Newegg still forces the converted price to end with .99, at least for items they sell directly (non-Marketplace items).

After adding the item to the cart, the estimated VAT was PHP 1806.48. This is exactly 12% of the unit price. The shipping cost was PHP 2586.50 for World EggSaver Express (2-3 Business Days). The next lower shipping level, World EggSaver Standard (3-5 Business Days), was priced about PHP 50 lower.

During checkout, the quoted tax changed to PHP 2,298.34 (~15.3%)  and is now labeled as Est. Duty & VAT. I still haven’t figured out what formula Newegg uses to calculate duty and VAT. I tried checking out other monitors and the effective tax ranged from 23% to 35%. All-in, my total order cost was PHP 19938.83 or about $375.

I found the shipping cost to be quite reasonable. The monitor shipping weight is about 22 lbs. If I had used ShippingCart, the shipping cost alone would have been at least $154. Even though I wouldn’t have had to pay the VAT with ShippingCart, I think my over-all cost was still lower ordering from Newegg directly.

I placed the order on 10/29 and it shipped the same day. It was originally scheduled to be delivered on 11/05. It arrived in Manila on 11/01 but did not get cleared by customs until 11/06.

I read some people complain about FedEx charging some clearance and warehouse storage fees upon delivery. Fortunately I did not have to pay any additional fees to FedEx or to the Bureau of Customs. All in all, I think I would directly order from Newegg again if I find the total price, with duty, VAT and shipping to be competitive with using services like ShippingCart.

Netflix, Amazon Prime Video, and DirecTV Now from the Philippines with Smart DNS Proxy

Having recently moved from the US back to the Philippines, I still have a few active online video streaming accounts. I have a Netflix subscription paid up for the next six months or so, an Amazon Prime account, and a grandfathered, discounted “Go Big” DirecTV Now account. Although Netflix is already available locally in the Philippines, there’s a big difference in content selection due to regional licensing contracts. In some cases, it’s better like in the case of Better Call Saul whose episodes are made available weekly after their US airing. In most cases, the US content still trumps the local selection. For Amazon Prime Video, it seems I can only access the Amazon original content. I have not yet seen what would have been available at PrimeVideo.com. As for DirecTV Now, it is absolutely blocked outside the US.

At first I thought that I would need a VPN to access these services. That was before I found out about Smart DNS Proxy which allowed access to all three video services. There’s a two week trial available with no credit card required. To set it up, you need to change your DNS server to one of their DNS servers. Using a tool like QuickSetDNS makes it easy to switch the DNS server on Windows PCs. I’ve also set up Smart DNS Proxy on my Fire TV Stick and it worked flawlessly. After the two week trial, I’ve decided to subscribe for 1 year.