Consumption Driven Philippine Economy

[niky]

aside from OFW money flooding the economy consumers also have easy access to credit (credit cards, car loans, personal loans, housing loans)

you'd think everyone's getting rich

many are just piling on debt

The OFW issue masks this problem. As another analyst has pointed out, remittances alone can't explain the increase in consumer spending...

In fact, easy credit is a huge global issue. You'd think 2008 never happened the way banks are handing out low interest loans.

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And there are the big cash inflows from investment money looking for a place to park while the US economy melts down. Investment money that will evaporate once things return to normal.

[uls]

And there are the big cash inflows from investment money looking for a place to park while the US economy melts down. Investment money that will evaporate once things return to normal.

yes and the US economy is already recovering and hot money is flowing out of the Phils.

just look at USDPHP



sell pesos buy dollars

[vinj]

yes and the US economy is already recovering and hot money is flowing out of the Phils.

just look at USDPHP



sell pesos buy dollars

Exactly what was discussed in a briefing i attended over a month ago and again, during a treasury meeting yesterday. Money is going out-out-out.

As for us regular Juans. Money is nowhere to be found so we have no issues on where to invest.

My boss told me na may chinese philisophy din daw na usually, even sa chinese, third gens yung umuubos din nang pera kasi nga spoiled na eh. So even now na they are on top, they are wary of that pitfall. So that bodes well for them because they have learned from history.

My former boss is 3rd gen and sobrang praning on that saying kaya ayan... ang kuripot tuloy. It's not only about saving the money or that they are lazy, but its possibly the business sense is not as good or they are not as hard driven since they have "fall backs". The business environment nowadays is also different from before.

[badkuk]

He probably remembers what happened back in 1997

[jhnkvn]

It is of poor business to actually be kuripot. Since kuripot and simply being efficient are two separate things.

In my case, we're second-generations from the family. The Chinese saying is that "The first, grows the business. The second maintains it and that the Third squanders it away." We simply try to bypass that by simply diversifying -- para lagi first-generation sa business

[niky]

The problem is the number of eggs and the number of baskets. There are just too many baskets to fill come third gen.

Too many bosses. Too many mouths to feed.

Actually, some businesses last past the fourth. Some fold even before the second. (particularly in the US)

It all boils down to how the future generations are raised. If any generation is raised to expect and take prosperity for granted, without the urge to build and foster the business like the first generation did, then they won't be interested in continuing it.

[Ry_Tower]

The problem is the number of eggs and the number of baskets. There are just too many baskets to fill come third gen.

Too many bosses. Too many mouths to feed.

Actually, some businesses last past the fourth. Some fold even before the second. (particularly in the US)

It all boils down to how the future generations are raised. If any generation is raised to expect and take prosperity for granted, without the urge to build and foster the business like the first generation did, then they won't be interested in continuing it.

Add to that is that this is the genaration where most quarrels occur. Mas madami na din sumasawsaw na in-laws.

[A121]

from the article posted by Monseratto



exactly

aside from OFW money flooding the economy consumers also have easy access to credit (credit cards, car loans, personal loans, housing loans)

you'd think everyone's getting rich

many are just piling on debt

debt is really cheap nowadays. kesa ibangko mo na talo ka sa pagkababa ng interest or itayo mo ng negosyo na walang pupuntahan, ibili mo na lang ng Fortuner.

same as real estate - dahil sa baba ng interest rate sa bangko (mas madaling magpreserve ng capital), bili muna ng real estate para mabenta ng mahal in the future.

[dcph172]

yes and the US economy is already recovering and hot money is flowing out of the Phils.

just look at USDPHP



sell pesos buy dollars

Hello. Is this solid advice? Cos if it is, ill definitely exchange some peso tomorrow? Also, do you think it will ever reach 55:1 again? I still have some usd from the 55:1 level of early 2000's.




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[uls]

Hello. Is this solid advice? Cos if it is, ill definitely exchange some peso tomorrow? Also, do you think it will ever reach 55:1 again? I still have some usd from the 55:1 level of early 2000's.



Sent from my iPhone using Tapatalk

ey sorry that isnt advice

i'm just saying foreign funds are selling pesos and buying dollars and heading back home

[uls]

re: 55 to $1

something really bad has to happen to the Phils. for that to happen

[dreamur]

re: 55 to $1

something really bad has to happen to the Phils. for that to happen

Yup, I held on to some dollars I purchased when it was 55 but had to let go at 50. I don't think it will ever reach 50 again.

Sent from my GT-N7100 using Tapatalk

[badkuk]

Well, if all that talk about a PH bubble is true...

[uls]

dollar outflow will be offset by OFW remittances

Filipino Remittances to Buoy Peso After Typhoon: Market Reversal - Bloomberg

[ghosthunter]

re: 55 to $1

something really bad has to happen to the Phils. for that to happen

a political revolution would make it head that way quickly...

[Helios]

re: 55 to $1

something really bad has to happen to the Phils. for that to happen

how about a real head-on war with china

re the consumption economy issue, well there's the lack of skills and expertise, lack of volume demand, cheap outsourcing, tax penalties among others. obvious reasons why we have yet to establish a manufacturing industry in the country. ideally fix the system of governance first before a sturdy infrastructure for manufacturing is to be built upon. we can't expect to see a big leap from this trend of consumerism to building something local until we can 'manage' the red tape and political dynasties. to think we can wipe it out completely would be like cutting off hydra's head. the hydra is the oligarchy's pet. the taipans keep hydra on a tight leash which explains why they keep building malls we love going to. ang gulo ano?

don't we have a handful of small to micro businesses in the marketplace already geared towards manufacturing? i know there's innovation in the country however little but not insignificant which is how they keep the prices competitively low

[badkuk]

don't we have a handful of small to micro businesses in the marketplace already geared towards manufacturing? i know there's innovation in the country however little but not insignificant which is how they keep the prices competitively low

i think our exports of ICs, semiconductors, etc have been doing pretty well, riding the mobile devices upsurge...no thanks to power rate hikes.

imho we really need to stabilize our infra first(roads, utilities, electricity, etc) before manufacturing(well, actually, everything) can take off.

[Monseratto]

There was already a manufacturing base economy but they all left when the government and labor unions screwed them up. That is why the philippines is not in any investor's radar. Also our export of labor is not exclusive and may not be sustainable. Other countries are now doing the same thing. Just look at the number of Indonesian DH in HK...

[niky]

So many tens of thousands here in the south screwed out of high paying jobs for multinationals due to labor unrest instigated by the KMU...

Guys with housing, medical and educational benefits... now relegated back to the life of the barely-above-poverty-level blue collar worker. :grumpy:

[jpdm]

This might help revive manufacturing in the country...

PCCI seeks to lift constraints to inclusive growth


by Bernie Magkilat
December 12, 2013

(edited)

Atty. Miguel Varela, President of the Philippine Chamber of Commerce and Industry, said that while the economy is riding high with more than 7% in GDP growth over the last three quarters and industry sector experiencing gradual revival, decisive action is needed to keep the momentum going.


Varela also mentioned that the issue of rising cost of fuel and electricity was an annoying issue, but the core issue to be resolved was to ensure the adequacy, reliability and reasonable pricing of energy.

“It may be high time that government aggressively promote exploration for indigenous sources of fuel and in the process address how to make it attractive to bring in investors, mainly with the issue of business permitting and licensing taking from more than a hundred to a thousand,” he said.

The rate increase by Meralco, he said, would hurt consumers, and, particularly in the emergency meeting of PCCI on the Meralco rate increase issue, the exporters were among the most vocal about the impact on their competitiveness in the global market.

“Open access, which has earlier been touted as something that could help large users, will not be much help as there is not enough power supply, a situation that has come to the fore with the latest increase in rates,” he said.

The coming year, he said, is critical year for action that requires decisive movement on a variety of issues.

First is the sense of urgency to rebuild the cities and towns in the Visayas where damage to infrastructure and livelihood, not to mention loss of lives caused by an earthquake and a super typhoon has run up to the billions.

He mentioned a huge investment that signified the increased confidence by foreign investors.

“We are excited about the incoming $5B investment of the Dubai-based Kampac Group headed by Mr. Charles Ampofo,” he said.

Kampac will be building an “Energy City” in South Luzon, which is estimated to employ between 8,000 and 10,000. It is a strategic project that should be able to help build fuel reserves.

He also noted the renewed interest especially among the Japanese in Philippine manufacturing.

“ This was made possible because the Japanese wants to have a more diversified production base and given the high tension between Japan and China and the high rising cost of living in China, Indonesia and Thailand,”

As an aid to inviting more big ticket investments, Varela cited the launching of industry roadmaps which envisions globally competitive manufacturing industry with strong forward and backward linkages.

The resulting globally-competitive manufacturing industries would increase industry contribution to 30 percent of total value added and 15 percent of total employment.

“Supported by a strong parts and components sector and inputs from productive agriculture sector as well as well managed supply chains, our country is expected to play a vital role in the regional and international production networks of companies engaged in automotive, electronics, garments and good,” he said.

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