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  1. Join Date
    Apr 2014
    Posts
    5,246
    #731
    How do banks get their investment back when you default? Sa bahay medyo clear pa since nag aapreciate ang value. Sa kotse, lugi na sa depreciation at naka park lang sa initan. Di naman ganon kalaki ang difference ng bidding sa banks at current market value.

    Sent from my BLL-L22 using Tapatalk

  2. Join Date
    Nov 2005
    Posts
    34,818
    #732
    usually people think of inflation as prices going up

    don't forget loan creation/credit creation is inflationary

    more new money goes into circulation goes to chase limited supply of goods = inflation

    so a central bank that wants to tame inflation should discourage borrowing by raising interest rates

    which our central bank is doing in tiny steps (only two 25 bps rates hikes recently)

    and that's why i keep raising the issue about BSP cutting RRR which is the opposite of trying to discourage bank lending

  3. Join Date
    Jan 2003
    Posts
    2,407
    #733
    Quote Originally Posted by uls View Post
    usually people think of inflation as prices going up

    don't forget loan creation/credit creation is inflationary

    more new money goes into circulation goes to chase limited supply of goods = inflation

    so a central bank that wants to tame inflation should discourage borrowing by raising interest rates

    which our central bank is doing in tiny steps (only two 25 bps rates hikes recently)

    and that's why i keep raising the issue about BSP cutting RRR which is the opposite of trying to discourage bank lending
    *uls, dyan papasok yung pauso ni Basel na liquidity ratios. Gusto ni bsp compliant tayo dyan.

  4. Join Date
    Sep 2014
    Posts
    8,481
    #734
    Quote Originally Posted by uls View Post
    usually people think of inflation as prices going up

    don't forget loan creation/credit creation is inflationary

    more new money goes into circulation goes to chase limited supply of goods = inflation

    so a central bank that wants to tame inflation should discourage borrowing by raising interest rates

    which our central bank is doing in tiny steps (only two 25 bps rates hikes recently)

    and that's why i keep raising the issue about BSP cutting RRR which is the opposite of trying to discourage bank lending

    Bec its not about the money, some 10 years ago, most Pinoys have less access to money, pero nun nagkarin ng pagkakataon, some or mostof these people contributed or became productive for the economy.

    Its not money that makes the world move, its still the people, honest to goodness manual labor.

    look at what happened in 2008, if the world froze coz of the possibility of default, mas apocalyptic.

    Right now, we are just talking about percentages, interest hikes and inflation increase.
    What is that really? Kahit ano pa sabihin ng mga analytics, talo yan ng isang grupo ng tao na nagtatrabaho manually coz labor can multiply a loaned money tenfold or twentyfold. Sa finance world , malabo na kumita ng even 10% sa invested money ngaun.

    One component of The build build program is hard manial labor of most Pinoys na kung wala yan tambay lang.

    I think you all missed this part kaya may fear of doomand gloom kayo sa economy.

  5. Join Date
    Sep 2003
    Posts
    21,866
    #735
    A public announcement from the Philsbury Boy/ Ambulance Chaser...


  6. Join Date
    Jul 2008
    Posts
    5,993
    #736
    Quote Originally Posted by chronicle View Post
    How do banks get their investment back when you default? Sa bahay medyo clear pa since nag aapreciate ang value. Sa kotse, lugi na sa depreciation at naka park lang sa initan. Di naman ganon kalaki ang difference ng bidding sa banks at current market value.

    Sent from my BLL-L22 using Tapatalk
    Malaki lugi nila sa cars. But at some point they still have to get rid of them, even if they have to sell at a loss. Bumababa kasi value over time. Pero yung isang bank manager dito sabi sa kin kahit property loan, kung non performing di pa rin maganda for them.

  7. Join Date
    Nov 2005
    Posts
    34,818
    #737
    Quote Originally Posted by minicarph View Post
    Its not money that makes the world move, its still the people, honest to goodness manual labor.
    if nobody deployed capital to build something or put up a business manual labor will be sitting around playing tong-its



    --



    there's too much money in circulation

    one contributor you cannot ignore is the large salary increase in PNP and AFP (which started in January this year)

    suddenly hundreds of thousands of households have more money to spend
    Last edited by uls; July 6th, 2018 at 01:56 PM.

  8. Join Date
    Nov 2005
    Posts
    34,818
    #738
    Quote Originally Posted by A121 View Post
    *uls, dyan papasok yung pauso ni Basel na liquidity ratios. Gusto ni bsp compliant tayo dyan.


    but we're overcompliant...

    so BSP has to lower RRR

    bad timing

  9. Join Date
    Feb 2008
    Posts
    10,760
    #739
    ImHO increasing interest rates will translate to borrowers defaulting on their existing loans or lowering of appetite for investing in real estate or buying new cars. The banks will end up owning a huge chunk of properties which will bring market prices down. Then the bubble will burst.


    Sent from my SM-N950F using Tapatalk

  10. Join Date
    Jun 2018
    Posts
    1,475
    #740
    Regarding default on loans, we're still a long way off from our neighbor, India. Single digit vs double digit.

    "However, the foundation of any economy is its banking sector, and India is in crisis. The most recent figures show that India has the second highest—behind Italy—bank nonperforming loan rate in the world at 11.6 percent. Philippine banks have a 1.8 percent NPL as of March 2018."


    Reference - Banking in the Philippines | BusinessMirror

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Philippine Economy Talk