Philippine Economy Talk

[Monseratto]

Metrobank 1.25Y Bond
Final rate is 3% gross
Quarterly coupon payment
Min placement is Php 1M
Issue size up to Php 10B
Short offer only; may close anytime
Tentative settlement date is June 22


CHINABANK 2Y BOND
Indicative rate is between 2.75% to 3% gross (2.2% to 2.4% net)
Quarterly coupon payment
Min placement is Php 5,000,000 (via Chinabank Capital)
Tentative offer period TBD
Tentative settlement date is Oct 20



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[boybi]

in theory it's suppose to

in theory lower rates should encourage borrowing

but the real world doesn't always work according to theory

this is Japan

Their central bank has maintained ultra low rates for more than 20 years and they still can't create inflation*



*you create inflation when you have healthy credit creation

Did their banks pass on the lower rates to borrowers?

[Monseratto]

in theory it's suppose to

in theory lower rates should encourage borrowing

but the real world doesn't always work according to theory

this is Japan

Their central bank has maintained ultra low rates for more than 20 years and they still can't create inflation*



*you create inflation when you have healthy credit creation

Japan's Lost Decade...

The Lost Decade or the Lost 10 Years (失われた十年, Ushinawareta Jūnen) was a period of economic stagnation in Japan from about 1991 to 2001, caused by the Japanese asset price bubble's collapse in late 1991. From 1991 to 2003, the Japanese economy, as measured by GDP, grew only 1.14% annually, well below that of other industrialized nations.

[uls]

Did their banks pass on the lower rates to borrowers?

yes bumaba naman ang lending rate ng commercial banks



take note it was gradual

hindi ung after nag rate cut ang central bank nila nagbaba din agad ang commercial banks nila

[uls]

it's not all bad news out there

pinoy fintech PayMongo gets a 12 million dollar capital injection

Philippines payment processing startup PayMongo lands $12 million Series A led by Stripe – TechCrunch

[Monseratto]

More mouths to feed...


Surprise Pregnancies in Philippines Surge Amid Virus Curbs

[shadow]

New Philippine Tax Adds More Pain to Pandemic-Hit Online Casinos

Tsupi! Kung hinde kaya bayaran bagong tax!


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[uls]

we were talking this about the the other day

Banks' hesitation to lend persists with loan growth at 13-year low | Philstar.com

weak bank lending

not only because of the risky environment, there's no demand for loans

“Bank lending growth continued to moderate as a result of weaker corporate sector performance, declining loan demand, and risk aversion among banks,” the central bank said.

i mentioned that there are limits to what central banks can do

BSP did everything it can

If anything, the August outturn highlights the limits of the BSP’s power to rescue the economy from a pandemic-induced recession. BSP officials are aware of this, but have nonetheless gave everything in their power to prompt banks to lend and consumers to borrow and spend, albeit so far failing.

plans are put on hold

no plans to expand, invest

so no demand for loans

“With job losses mounting and uncertainty on future earnings prospects limited, households and corporates have opted to preserve cash for immediate concerns while shelving expansion or investment plans to a later date,” Mapa explained.

there's lots of money to lend

but no demand

“Unfortunately, as we’ve seen many times before, you cannot simply throw money at the problem as the root cause of anemic bank lending is poor demand and not lack of supply of funds,” Mapa explained.

[boybi]

we were talking this about the the other day

Banks' hesitation to lend persists with loan growth at 13-year low | Philstar.com

weak bank lending

not only because of the risky environment, there's no demand for loans




i mentioned that there are limits to what central banks can do

BSP did everything it can




plans are put on hold

no plans to expand, invest

so no demand for loans




there's lots of money to lend

but no demand

Try lowering their lending rates, baka may kumagat.

[istan]

Try lending to airlines. Kakagat yan. Basta may government guarantee.

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