August Roundup: Heartbreak and Money Pit

 August Highlight


Pic from my tatay's 70th birthday two years ago. No birthday pic with him this year :(


Try as I might, I can't seem to think of anything that got me excited or hopeful in August. On the contrary, "disappointment" seemed to be last month's theme as Metro Manila reverted to ECQ status for two weeks so we couldn't go home for my dad's birthday. But August then leveled up to "heartbreak" level  when Chadwick Boseman succumbed to colon cancer.

Enough already 2020! Sumosobra ka na :(

August Expenses

As part and parcel of the disappointment/ heartbreak streak in August, I also had sky-high expenses which led to some artful rearranging of my funds.

My Sunlife quarterly premium payments were due, so I made room for that in our budget (about Php16,500 for two insurance plans). But I was caught flat-footed by my Pag-ibig statement of account which charged four months worth of mortgage payments. Take note that I'm paying for two condo units so I had to pay eight months worth of mortgage payments (about Php39,000). Aray!

Pag-ibig initiated a payment moratorium because of the pandemic and did not send a statement of account for three months. Silly me thought that it would move the payment schedule accordingly, so I was shocked when I saw that Pag-ibig charged the whole three month period covered by the moratorium, together with the current month, in one statement of account. Again, aray!

It's a good thing I've been setting aside money for extra payments towards my Pag-ibig principal for one condo unit, so I used that cash to settle those mortgage bills. Ipon-ipon na lang ulit for my planned extra payments towards the principal since I really want to wipe out one mortgage payment ASAP. Then when that's fully paid, I intend to turn my full attention towards the second mortgage so that I'll be mortgage-free sooner rather than later.

The third major expense was caused by my expectation that my Philippine Airlines reimbursement for our cancelled flights to New Zealand last April to visit my sister and her family, would finally appear in my BPI credit card for the August billing cycle. Because PAL said that the reimbursement would be made in 2-3 billing cycles, I charged all our grocery, gas and non-essential expenses (about Php25,000) to my BPI credit card, since August was the third billing cycle from the time my request for refund was made in May. We may have gone a little crazy with groceries and may have logged into Lazada and other online stores a tad bit more than usual because I thought my PAL credits would come in to cover those expenses, but alas, the expected windfall did not arrive.

I thought of complaining to PAL about my now delayed refund, but when I hopped over to the PAL Facebook page, I found it bursting at the seams with other people experiencing the same problem and expressing their dismay in very colorful language. So I'm sure PAL is very much aware of the public clamor for refund and is doing its best to expedite the reimbursements. Thinking otherwise will only cause unnecessary stress on my part, and stress leads to an increase in free radicals and cellular damage which paves the way to premature aging. I don't want to look older beyond my years, so I'll just wait for my refund quietly and will stop myself from charging silly purchases to my credit card, at least until my refund actually comes. 

August Numbers

I spent 95.63% of my August income and my savings/investment rate was a dismal 25%. Emergency funds increased slightly to 28% of my target amount of Php250,000 from July's 25.2%. 

As of August 2020, my mortgage principal for the two condo units are: Php342,394.53 and Php587,932.85. I expect the principal for both condo units to go down considerably in the upcoming billing cycle because the August charges will purportedly go towards the principal. 

Speaking again of Pag-ibig, I posted my "bill shock" on my Facebook page and a Pag-ibig representative reached out to me to clarify some things. I made that post public and got a few comments and questions from other people going through the same thing, so I'll post my status message verbatim here too, in case it might also help some of my readers:


Pag-ibig didn't send a statement of account for 3 months because of the automatic grace period provided in the Bayanihan Heal as One law. But the current statement includes the past 3 months WITH ACCRUED INTEREST for the 3 unpaid months.

Luh?! Wala ngang statement of account so paano magbabayad? Kalurks kayo.

I'm expecting a very public retraction/ explanation ala Meralco soon.

----

UPDATE! (as of 8/12/20)

A Pag-ibig representative reached out to me to explain that the accrued interest written in the billing statement was not a penalty for the unpaid 3 months, but it was the interest payment "baked into" the mortgage payment due every month. She wrote:

"The "accrued interest" isn't a penalty for non-payment. It's the interest portion of monthly amortization that you already regularly pay. We only say "accrued" because we didn't collect it during the ECQ. So no additional charges or penalty have been imposed."

In my case, I pay around 5.3k/mo. as mortgage payment for our condo unit. About half of my payment goes towards the outstanding balance of my loan, while the other half goes towards interest payment.

I checked out the math to confirm what the representative said and it fits.

My current billing statement was for 3 months unpaid and the current month, so 4 months in total. I was charged Php19,369.24 as immediately due and Php1,997.30 as accrued interest or a total of Php21,366.54. This more or less corresponds to the Php21,200 (Php5,300 x 4) that I was expecting to pay for 4 months of mortgage payment.

Case closed. The accrued interest was not a penalty for non-payment. Whew!

BUT I was charged Php201.06 as a penalty, so I'll ask the Pag-ibig rep about that and will update this again soon.


So that's that for August. Here's hoping that we finally flatten the Covid-19 curve in September, as some University of the Philippines experts predict, and that the power of Christmas will ward off 2020's curse.


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Comments

  1. I am very confused with the BAHO act and the press release from my bank (re: my home loan). I didn't read the BAHO act, but my bank said the maturity date would be moved for as long as the grace period is enforced.

    The bank's exact words were: "Consequently, your original maturity date will also be extended" -- when you say maturity date, it means the whole loan itself, right? Not just the due date for the amortization.

    That gave me the impression that there would be a gap period (?) of sorts, but I experienced 'bill shock' when I got the statement (4 months of amortization). Good thing I also set aside the money because I was also planning to pay off the mortgage sooner. Times like this, a good corporate communications team is necessary.

    ReplyDelete
    Replies
    1. "The maturity date represents the due date of the final installment of principal on a loan." (https://finance.zacks.com/loan-maturity-date-mortgage-5608.html#:~:text=The%20maturity%20date%20represents%20the,entire%20term%20of%20the%20loan.)

      I had to google what maturity date meant vis-a-vis a loan paid on installment basis, because I'm only familiar with maturity date as to single payment instruments. But, it looks like your interpretation was correct so your bank's corporate communications team has some explaining to do.

      Delete
    2. Decided not to call them to clarify para di na madagdagan ang stress :( But I feel for everyone who might have had the same interpretation and reallocated the money to more pressing matters.

      Delete

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