Financial Crisis: The Philippine Version

[uls]

or a world war

[Galactus]

wala ka naman magagawa eh if people go back to basics. from the looks of it, even if oil drops down to P20/liter here, it will still not encourage spending.

the other option is war/revolution. if this happens, i'm sure everything I mentioned will go down. surely the world banks who has our necks will not be that pushy anymore .... but for a very dear dear price.

yan lang naman ang reason why kinekelangan uptrend lahat: taxes, salaries/benefits, prices of goods/commodities, price of real estate, prices of service, bec. we have to pay a fat share to the world banks.

from the world banks point of view, wala silang pakelam if we go into the brink of war or poverty or recession or depression, as long as we pay what is due.

so my take is on this, if we are too fend for ourselves, deflate everything, identify and maximize areas of efficiency, encourage spending, get rid of that paralyzing fear: "get the most of what i can take home today for tomorrow is uncertain"

now *uls you mentioned, "kung ikaw ang provider ng services, mas ok sayo mas mababa ang presyo ng iyong serbisyo?"

i already did this. i have prepared my business strategy for 2009. actually nag-test run na nga ako ngaun pasko eh hehehe. while other services business are taking advantage of the holiday money by overcharging consumers in however which way they can. i did otherwise. nakagulat nga bec. somehow i found myself with a new target market/clientele.

but this can't be done overnight. talagang research ako last year to identify areas of efficiency. if other businesses will do this, i'm sure deflation is the only strategy to get loyal customers out of their overcharging suki.

Maybe in your Hollow Earth, Oldblue, but not here. Read again your notes on Econ 11, specifically the law on supply and demand.

Hmmph...another crackpot has joined the fray.

[ghosthunter]

High technology is the result of costly investment. Hence, new or latest products made that technology will cost more.

[uls]

kasi hindi lang naman dahil marami tao hindi makabayad kaya nagkakaloloko mundo natin ngaun

that's what is causing the global financial crisis now

overlending by banks, overborrowing by consumers

borrowers can't pay back the loans

banks get badly burned

banks tighten lending

less money goes into the economy, economy slows down

that's it

[uls]

something to back up what i've been saying:

Consumer credit posts record drop in November
Thu Jan 8, 3:48 pm ET
http://news.yahoo.com/s/nm/20090108/...onomy_credit_1

WASHINGTON (Reuters) – Consumer borrowing dropped by a record $7.94 billion in November, a Federal Reserve report showed on Thursday, the latest evidence that households were unwilling or unable to take on more credit.

The November decline represented a drop of 3.7 percent, the largest percentage fall since January 1998, when it was down 4.3 percent.

October's credit tally was revised to a drop of $2.78 billion, from an originally reported fall of $3.54 billion.

less borrowing:

Non-revolving credit, which includes closed-end loans for big-ticket items like cars, boats, college educations and holidays, fell $5.18 billion, or 3.9 percent, to $1.597 trillion.

Revolving credit, made up of credit and charge cards, fell $2.76 billion, or 3.4 percent, to $973.5 billion.

less bank lending, stricter lending standards

Banks have been cutting credit lines, canceling unused credit cards and imposing tougher qualifications for loan approval as they try to limit their exposure to consumer debt.

Less borrowing, less lending, economy slows down, companies lay off workers...

people who lose their jobs can't pay off loans

Soaring unemployment has caused more Americans to fall behind on loan payments than at any time since 1980, and delinquencies are likely to head higher, the American Bankers Association said on Wednesday.

A Labor Department report on Friday is expected to show that 550,000 jobs were lost in December, pushing the unemployment rate to 7 percent from 6.7 percent in November, according to a Reuters survey of economists.

more bad loans, banks tighten lending even more, economy slows down even more, companies lay off more workers...

it's a freaking feedback loop

a vicious circle

[valvura]

Update from DOLE Region IV-A:

http://www.gmanews.tv/htmfiles/WORKE...AL-CRISIS.html

How is our government addressing this situation? Are they more busy preparing for the 2010 elections?

[FWC]

The government? Asa ka pa! They don't care. They are insulated by the wealth they amassed sa pangungurakot.

Several of the countries top economists suggest devaluing the peso and pegging it to around P55 to USD1.

The major advantages:

1. The money remitted by OFWs will increase in value, thus increasing consumer spending.
2. The cost of outsourcing to the country will become cheaper thus enticing more BPOs to set up shop or enlarge their presence here.
3. Traveling to the country will become cheaper thus promoting tourism.
4. Cost of locally produced goods for export will become more competitive.

The major disadvantages:

1. Fuel prices will increase.
2. Prices of imported goods will increase, especially the name brands.
3. Travel outside the country will more expensive.

Nakinig ba sila? Hindi! Kasi hindi pag nag devalue, hindi naman sila mag benefit, eh. Mga OFWs, the BPO employees, mga employees ng export manufacturing firms. etc ang makikinabang. Pero ang tatamaan sila. Kasi sila mahilig gumamit ng mga gas-guzzlers. Kasi sila mahilig bumili ng imported goods, kasama na exotic cars. Sila rin mahilig bumiyahe abroad. Pag may laban nga si Pacquiao, buong tribu nila sa US!

Kaya kesehoda mahirapan ang bayan, basta sila tuloy ang ligaya!

[n1kn0k]

How is our government addressing this situation? Are they more busy preparing for the 2010 elections?

They are addressing this by conducting hearings so they can get the much needed exposure for the upcoming elections. Galing talaga ng gobyerno natin!:clap1:

[jpdm]

The government? Asa ka pa! They don't care. They are insulated by the wealth they amassed sa pangungurakot.

Several of the countries top economists suggest devaluing the peso and pegging it to around P55 to USD1.

The major advantages:

1. The money remitted by OFWs will increase in value, thus increasing consumer spending.
2. The cost of outsourcing to the country will become cheaper thus enticing more BPOs to set up shop or enlarge their presence here.
3. Traveling to the country will become cheaper thus promoting tourism.
4. Cost of locally produced goods for export will become more competitive.

The major disadvantages:

1. Fuel prices will increase.
2. Prices of imported goods will increase, especially the name brands.
3. Travel outside the country will more expensive.

Nakinig ba sila? Hindi! Kasi hindi pag nag devalue, hindi naman sila mag benefit, eh. Mga OFWs, the BPO employees, mga employees ng export manufacturing firms. etc ang makikinabang. Pero ang tatamaan sila. Kasi sila mahilig gumamit ng mga gas-guzzlers. Kasi sila mahilig bumili ng imported goods, kasama na exotic cars. Sila rin mahilig bumiyahe abroad. Pag may laban nga si Pacquiao, buong tribu nila sa US!

Kaya kesehoda mahirapan ang bayan, basta sila tuloy ang ligaya!

Amen!!Amen!!

[tidus1203]

MANILA, Philippines - The rural banks belonging to the Legacy Group pulled off the "grandest" banking scam in the country’s history, the central bank said, by luring depositors with "double-your-money schemes" and siphoning deposits into fictitious accounts.

In a briefing late Friday, Nestor A. Espenilla Jr., Bangko Sentral ng Pilipinas deputy governor for bank supervision and examination, said bank examiners discovered a bevy of "ghost" borrowers through which the rural banks diverted funds to themselves and affiliate companies.

Furthermore, these ghost borrowers were paid "commissions" ranging P10,000 to P15,000 by Legacy officials for loans running into the "millions of pesos."

"What we found was that the money was being dissipated through fictitious loans and advances to related companies," Mr. Espenilla said.

The scam, the official also said, was the "most complete criminal banking model" witnessed in the Philippines.

On Friday, the central bank filed charges against 18 officials of four rural banks with the Justice department.

This was the second time it had done so. On Jan. 5 — the first working day of the year — the central bank filed complaints against other officials of other rural banks with the Justice department.

"The cases were filed as BSP’s investigations uncovered massive diversion of funds by said banks using fictitious loans," the BSP said in a statement late last week.

Thirteen rural banks either belonging to or linked with the Legacy Group were shuttered and placed under the receivership of the state deposit insurer in December for insufficient capital, poor liquidity and for practicing unsound and unsafe banking practices.

The Philippine Deposit Insurance Corp. has estimated it needs to shell out a total of P14 billion to the banks’ depositors.

Mr. Espenilla said the Legacy rural banks also lied about the entry of potential investors and manufactured documents to support the fake loans.

These documents included counterfeit mayor’s permits and Department of Trade and Industry registration certificates.

There were no investors, no Bank Mega of Indonesia — as claimed by Celso de los Angeles, former Legacy Group chairman — who could have shored up the banks’ finances.

"They (Bank Mega representatives) showed up, but they never submitted any concrete investment or rehabilitation proposal [for Legacy]," Mr. Espenilla said.

"They (Legacy) said they had injected fresh capital into their companies, but we checked and found out that this was not true," Mr. Espenilla said.

To improve the group’s financial statements, the BSP official said the Legacy banks would sell supposedly repossessed land for about 10 times their real value to affiliate companies.

And to meet liquidity requirements, the Legacy banks "borrowed" capital from affiliate companies.

Finally, to meet their obligations to old depositors, the banks used funds from new depositors.

"They had a mechanism for attracting new investors, a mechanism for cleaning their books and a mechanism for siphoning accounts," Mr. Espenilla said.

He said Mr. de los Angeles had expanded his network by acquiring undercapitalized banks on the verge of being closed by the BSP.

Mr. Espenilla also clarified he never owned a rural bank in Masbate as Mr. de los Angeles had alleged.

"Since its establishment up to the present, I never owned any share of stock in RB San Jacinto nor was I involved in its management. I absolutely have no dealings with the bank, either as a borrower or an investor. I have never been employed by RB San Jacinto," he said.

BSP Governor Amando M. Tetangco Jr. defended the deputy governor, saying that the latter was being subjected to unfair allegations.

"I have known Deputy Governor Nestor Espenilla in the 27 years that he has been a central banker. In all these years, I have known him to be a person of integrity who applies his intellect, professionalism, and dedication in serving the country well as a central banker," Mr. Tetangco said in a statement sent Sunday.

Legacy bank officials were not available for comment.— Paolo Luis G. Montecillo, BusinessWorld

http://www.gmanews.tv/story/147890/L...borrowers--BSP

Our very own Bernard Madoff. Greed kills. Imagine all it took is GREED and they were able to pull off this scam. GREED is such a powerful weapon and it defies logic.