The Losing Power of the Pinoy Peso-- Again!

[uls]

pero as a consumer, you don't get zero rates

the zero rate is for the banks

the Fed lowered rates to encourage banks to lend,

since zero ang interest ng Fed loans para sa mga banks, the banks are supposed to pass the low rates to borrowers

kung dati 7% charge nila sa borrower, and the Fed charges the commercial banks 2%

5% kita ng mga commercial banks

Ngayon zero, the banks can lend at 5% to the borrower and still make the same profit

But in the real world, it's not working

banks are not passing the low rates to borrowers

banks are not lending... not much

[tidus1203]

In the UK they are forcing banks to pass it to the consumers, I suspect in the US gagawa ang mga lawmakers ng batas to pass it if not they will be violating a law... Alam mo naman ang mga pols they need to show that they are doing something even if it some of it is absurd...

[uls]

kaya abnormal ang financial system ngayon

ang mga bangko ayaw magpautang

the Fed became the lender of last resort

actually, lender of only resort

the financial system is being kept alive by the Fed's alphabet soup lending facilities (TAF, PDCF, TSLF, MMIFF, CPFF, AMLF ETC)

---

but the commercial banks have a reason for not lending

dami na nila bad loans

the last thing they need is more bad loans

consumers and businesses are in trouble

the banks are not very enthusiastic to anyone

tapos the governments wanna force the banks to lend

excellent

[tidus1203]

That's the problem of forcing banks to lend. The banks are smart enough to know which loans are potential bad loans so they don't wanna pass it for the most case or at least if they do want to lend they will lend at a higher rate to offset the potential risk. But by forcing the banks to lend (even to undesirables) with low rates could make it worse for the banks who are already hurting from previous sour loans. The pols of course again have to show off to their constituents they are trying to do something.

[uls]

kaya sa crisis na ito, there's no easy solution

if they do nothing, bad things happen

if they do something, there are unintended consequences

[jpdm]

The Philippine peso is expected to be weaker against the US dollar by end-2009 on the back of a slower economic growth, a bank executive said. Jonathan Ravelas, Banco de Oro Unibank (BDO) chief market strategist, said the peso is likely to end at P48.50 against the greenback this year compared with the closing level of P47.52 during the last trading day last year. He added that currency would remain volatile as it may swing between the P45.00 and P52.00 level.

Manila Times
January 2, 2009

Let us see...

[CVT]

^^^ Slower economic growth because there are fewer OFWs that are earning the oh-so-precious $$$ for the country. They're the ones who are keeping the economy afloat. Parang mga ampaw ang mga industriyang nandito sa Pilipinas....

7202:bruce_lee:

[jpdm]

^^^ Slower economic growth because there are fewer OFWs that are earning the oh-so-precious $$$ for the country. They're the ones who are keeping the economy afloat. Parang mga ampaw ang mga industriyang nandito sa Pilipinas....

7202:bruce_lee:

True primarily because they are import dependent.

So vulnerable to external (overseas)shocks.

Our industries should start re-tooling and use more local materials to be a little bit sturdier from international fluctuation of world commodities.

Sayang ang remittances of OFws and export earnings natin-- most (all of them pala due to our massive trade deficits)of them go out to pay for our massive (most of them can be produced here and non-essential imports)importation of goods and services.

No wonder we have the lowest GIR in Asia and paltry compared with China, Japan and Little Taiwan with almost a Trillion dollar GIR.