Philippine Economy Talk

[Lew_Alcindor]

Duterte is now threatening facebook. Is spreading fake news now part of our government policy?

Sent from my SM-N910C using Tapatalk

Duterte's leadership style is all about fear and intimidation.

He cant beat someone or something that is not afraid of him. Case in point - COVID19. Kaya tayo nasa ganitong situation sa COVID19 ay dahil akala niya madadaan niya sa usual antics niya yung pagsolve sa virus. Malas natin ang virus ay walang pake sa pagmumura niya.

Now I dont think Facebook is any way threatened by the words of Duterte. Mas kelangan ni Duterte ang Facebook - not the other way around.

[uls]

if there's a reason to borrow it's to use the cheap money for speculation not business

[boybi]

ganito yun

pag mahina ang economy --- mahina ang demand...

kung ikaw may business mag e-expand ka ba?

magpapatayo ka ba ng bagong planta?

magbubukas ka ba ng bagong branches?

kahit mababa interest rate di ka naman mangungutang coz you don't have plans

wait and see mode ka eh

Pero nagbaba interest rate ang BSP for nothing. Binubulsa lang ng mga banks yung savings on interest rates. Gaano na ba kalaki ngayon ang spread ng banks between time deposit and savings deposit interests versus lending rates.

Reason ng mga banks is because of the higher cost of their money, the loan defaults, etc. So sacrifice nila mga good payors ng loans. Lalo mahirapan mga debtors, humina na ang business, mataas pa din interest rates na binabayaran nila, e di lalo dadami mag default ng loans.

[uls]

there's actually a term for the phenomenon where central banks can only do so much

where monetary policy reaches a limit

it's called pushing on a string

Pushing On A String Definition

Pushing on a string is a metaphor for the limits of monetary policy and the impotence of central banks. Monetary policy sometimes only works in one direction because businesses and households cannot be forced to spend if they do not want to. Increasing the monetary base and banks’ reserves will not stimulate an economy if banks think it is too risky to lend and the private sector wants to save more because of economic uncertainty.

kaya i keep saying kailangan ng gov't spending coz i'm aware of that phenomenon

sobra paulit ulit ko na sinasabi yan

put money in people's hands

people will spend the money -- that creates demand

[uls]

re: interest rate on loans before central bank rate cuts

pag fixed rate ang loan kahit binaba ng central bank ang interest rate di naman affected yan diba

[uls]

know where we're seeing direct effect of lower rates?

Philippine treasury bonds

ang baba ang interest ngayon

and since that's the benchmark of corporate bonds ang baba din ng interest rate ngayon ng corporate bonds

i'm sure nakakatanggap kayo ng text/email galing sa bangko nag aalok ng corporate bonds

ang baba ng interest rate ngayon

so why are companies issuing bonds?

mahina ang economy mag e-expand ba sila?

no

they're just taking advantage of the low rate environment

maybe retire older debt with higher interest

buy back shares

[boybi]

re: interest rate on loans before central bank rate cuts

pag fixed rate ang loan kahit binaba ng central bank ang interest rate di naman affected yan diba

Depends on your loan agreement with the bank. Meron kasi credit line na 30 days to 180 days ang maturity and you can renegotiate the rate when you renew the loan.

[boybi]

know where we're seeing direct effect of lower rates?

Philippine treasury bonds

ang baba ang interest ngayon

and since that's the benchmark of corporate bonds ang baba din ng interest rate ngayon ng corporate bonds

i'm sure nakakatanggap kayo ng text/email galing sa bangko nag aalok ng corporate bonds

ang baba ng interest rate ngayon

so why are companies issuing bonds?

mahina ang economy mag e-expand ba sila?

no

they're just taking advantage of the low rate environment

maybe retire older debt with higher interest

buy back shares

Still, big entities pa din nakikinabang, especially the banks. Mga SME kawawa pa din.

[uls]

the problem with the economy now is lack of demand

madami nawalan ng income so wala pang gastos

ung mga may pang gastos either nagtitipid o walang opportunity gumastos coz di lumalabas / di masyado lumalabas / wala mapuntahan (hello local tourism)

(oo may online shopping pero iba parin ung gumastos sa labas madami nakikinabang)

the central bank cannot make people spend

[uls]

Still, big entities pa din nakikinabang, especially the banks. Mga SME kawawa pa din.

sa US nga ang reklamo -- the Federal Reserve's zero rates only drives speculation

people who have access cheap money speculate in the stock market

they don't put up businesses and hire people

that's the problem

hindi lang sa atin nangyayari ung limit ng power ng central bank