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PHILIPPINES TREASURY NOTES


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Kreole

I recently spoke with an expat living on Siquijor and he mentioned that he has some money invested in 25 yr.Philippine Treasury Bills @ 9%. He feels that they are a pretty safe investment, which he believes are no different than treasury bill offered in other countries. Moreover, when the economy worsens, the interest rate will actually increase. Do any of you have experience with treasury bills here? And do you believe that they are a safe investment for part of your savings fund?

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well maybe. but if you take out a housing loan in the europe ur gonna pay about 3->4%, dont care what it is in the US, but ur gonna pay maybe 10% in the Philippines. that high rate is going to keep

25 years is a very very long time   I hope im understanding this correctly ?   Given the long long time, the biggest fear is war, revolution and bankruptsy, all of which are quite possible in Phil

Well, there is a huge real estate bubble in the Philippines, with land and homes (especially condominiums) greatly inflated from what they should be, so it may eventually collapse as well. Somehow, to

Martwain

Don't know about T-Bills but I am currently invested in a trust special deposit account with Bangko Sentral ng Philipinas (Central Bank of the Philippines). Like a CD in the US. Matures each month with the option to roll it over. Current interest rate as of today is 3.6875% APR. minimum investment is 1M pesos. The interest rate is recomputed at maturity date. You can withdraw your money without penalty at any time. Compared with interest rates (or lack thereof!) in the US this is a hell of a deal. This interest, as small as it seems, is paying the college tuition for four relatives here. It goes to show you the difference between a strong economy and a very weak and sick (by design) economy. But that's a topic for an entirely different thread :horray:

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BE cautious...Like a LOT of countries the Philippines sometimes bases their investments on US treasury bills, bonds and other products.

 

You need to get a prospectus and read it to find out.

 

Lakan

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25 years is a very very long time

 

I hope im understanding this correctly ?

 

Given the long long time, the biggest fear is war, revolution and bankruptsy, all of which are quite possible in Philippines.

 

Sometimes countries which are categorised as "banana republic" decide one day, not to repay their debts.

 

With ALL investments, and especially any risky investments(ie. banana republic bonds/treasury notes), only invest as much as you can afford to lose.

 

Frankly it would not interest me, given the options available.

 

Personally, with Australian interest rates, I would be looking at investing in Australia instead, as its a more stable economy.

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smokey

i had some tier 2 accts like a CD but not PDIC they paid the interest each year for 5 years.. ( union bank ))the problem i see with government stuff is one time in mexico they devalued their peso to clear out these types of investments .... the peso went from 8 to the dollar to like 150 to the dollar not a good time to have lots of peso in your investments..,,, once i had to buy fuel for a fishing boat while in mexico from pemex it took 5,000 gallons and i used a credit card and when it was converted into peso it was a half of a black trash bag full of bills... took 2 hours just to count,,, point is what if you buy the note at 40 to the dollar today and when you go to cash it in its 100 to the dollar,,, now if you could say invest 20,000 us into a bond and it paid 6 to 8% but payable back into us that would be better i think i read how some south american countries devalued their money and save a huge bundle..

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Kreole
Personally, with Australian interest rates, I would be looking at investing in Australia instead, as its a more stable economy.

 

That is an interesting suggestion. I have never researched interest rates in Australia. Are there Australians on this forum who have any comments or suggestions? I assume you are referring to government treasury notes. Or are you referring to bank interest rates on savings accounts or CD's? As an American, I am not sure how I would be eligible to invest in accounts in Australia. And I do not know much about the stability of the Australian economy. But it has to be better than the US, which sucks big time.

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Martwain

The real estate "bubble" is deflating now in Australia so I wouldn't put too much faith in their banks. Like the rest of the "developed" countries. Especially long term. The commercial real estate will soon follow if history is correct. It's funny that smidsy (I can't use the quote feature while posting a response using my iPad) stated exactly what the typical "western" countries are going to become in short order. That being some sort of "banana republic". And subject to war, revolution and default. I trust my money much more here in the Philippines than I did in any bank back in the US. Don't sell the Philippines economy short. The RP is continuing to be a haven for investors who are looking for relative stability and growth. It amazes me how so many members of these forums are negative about most everything here in the RP. The Philippines has a lot to offer if one does their homework and learns how to integrate into the society here. There is risk in everything but there are also lots of preconceived notions that just aren't accurate.

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Headshot

The real estate "bubble" is deflating now in Australia so I wouldn't put too much faith in their banks. Like the rest of the "developed" countries. Especially long term. The commercial real estate will soon follow if history is correct. It's funny that smidsy (I can't use the quote feature while posting a response using my iPad) stated exactly what the typical "western" countries are going to become in short order. That being some sort of "banana republic". And subject to war, revolution and default. I trust my money much more here in the Philippines than I did in any bank back in the US. Don't sell the Philippines economy short. The RP is continuing to be a haven for investors who are looking for relative stability and growth. It amazes me how so many members of these forums are negative about most everything here in the RP. The Philippines has a lot to offer if one does their homework and learns how to integrate into the society here. There is risk in everything but there are also lots of preconceived notions that just aren't accurate.

 

Well, there is a huge real estate bubble in the Philippines, with land and homes (especially condominiums) greatly inflated from what they should be, so it may eventually collapse as well. Somehow, too many people have forgotten this is a third-world country, but it will eventually catch up with them.

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i had some tier 2 accts like a CD but not PDIC they paid the interest each year for 5 years.. ( union bank ))the problem i see with government stuff is one time in mexico they devalued their peso to clear out these types of investments .... the peso went from 8 to the dollar to like 150 to the dollar not a good time to have lots of peso in your investments..,,, once i had to buy fuel for a fishing boat while in mexico from pemex it took 5,000 gallons and i used a credit card and when it was converted into peso it was a half of a black trash bag full of bills... took 2 hours just to count,,, point is what if you buy the note at 40 to the dollar today and when you go to cash it in its 100 to the dollar,,, now if you could say invest 20,000 us into a bond and it paid 6 to 8% but payable back into us that would be better i think i read how some south american countries devalued their money and save a huge bundle..

I can see the US devaluing the currency, the longer you wait to do this the more it will hurt. China would be really pissed.
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Martwain

With all due respect Headshot, people need to do their research and not give in to the preconceived ideas of the RP being a third world country. The RP suffered from a terrible housing bubble (and commercial real estate as well) that came to a head in 1997 and the Philippines government passed sweeping legislation to help prevent this from happening again. The government "rescued" banks holding loans which were defaulted on by enacting the Special Purpose Vehicle Act of 2002. Republic Act 9182 (amended by Republic Act 9343). This enabled banks here to clear their balance sheets of the non-performing assets they were carrying. And it worked. Why did this work when the economic bailouts of the US and Europe have not? Because the economy here was (and still is) much smaller than that of first world countries. The major difference is that banks here don't like speculators when it comes to either residential or commercial real estate. It's also important to realize that there was quite a lag in real estate prices for years and the market is only catching up with what the market will bear.

 

Bottom line: people who continue to have preconceived ideas that the RP is a backward, third world developing nation are going to lose out on a lot of business oppoutunities. And you can bet your bottom dollar that just like iam states above, the US (and Europe) WILL see their currencies devalued at an alarming rate within the next two years.

 

Ok. I come down off the soap box now :scratch_head:

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smokey

With all due respect Headshot, people need to do their research and not give in to the preconceived ideas of the RP being a third world country. The RP suffered from a terrible housing bubble (and commercial real estate as well) that came to a head in 1997 and the Philippines government passed sweeping legislation to help prevent this from happening again. The government "rescued" banks holding loans which were defaulted on by enacting the Special Purpose Vehicle Act of 2002. Republic Act 9182 (amended by Republic Act 9343). This enabled banks here to clear their balance sheets of the non-performing assets they were carrying. And it worked. Why did this work when the economic bailouts of the US and Europe have not? Because the economy here was (and still is) much smaller than that of first world countries. The major difference is that banks here don't like speculators when it comes to either residential or commercial real estate. It's also important to realize that there was quite a lag in real estate prices for years and the market is only catching up with what the market will bear.

 

Bottom line: people who continue to have preconceived ideas that the RP is a backward, third world developing nation are going to lose out on a lot of business oppoutunities. And you can bet your bottom dollar that just like iam states above, the US (and Europe) WILL see their currencies devalued at an alarming rate within the next two years.

 

Ok. I come down off the soap box now :biggrin_01:

 

 

 

 

except for tier 2 bank paper i dont have the courage to invest in the philippines direct... Governments in the west are weak and its hard to change things but in most asian countries change comes fast and swift and often not to the beneift of the average guy,, the only investment we now have is farm land and its like winning the lotto buy cheap and if your lucky it will get titled some day and you will win big... millions were make and still are in a simple term called zoning.... farm land to building sites is a easy 1000% score if you can make it happen

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sperry

Don't know about T-Bills but I am currently invested in a trust special deposit account with Bangko Sentral ng Philipinas (Central Bank of the Philippines). Like a CD in the US. Matures each month with the option to roll it over. Current interest rate as of today is 3.6875% APR. minimum investment is 1M pesos. The interest rate is recomputed at maturity date. You can withdraw your money without penalty at any time. Compared with interest rates (or lack thereof!) in the US this is a hell of a deal. This interest, as small as it seems, is paying the college tuition for four relatives here. It goes to show you the difference between a strong economy and a very weak and sick (by design) economy. But that's a topic for an entirely different thread :)

 

very interesting

 

did you have a look at Philippine government bonds by any chnace? I saw on the web that 5 year currently yield 4.8%. Ylour friend did senstaionally well to get 9% over 25 years.

 

On a general note, I would be grateful if people who have invested in pesos over a say five year window could recount their experience.

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ellenbrook2001

WELL i do have money invested in AUSTRALIA one year investment renew every November in a 5.2% i only live on the interest fine for me would never put my hard money in the PHILIPPINES every month your heard scandal.or bankrupt???????????????

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smokey

With all due respect Headshot, people need to do their research and not give in to the preconceived ideas of the RP being a third world country. The RP suffered from a terrible housing bubble (and commercial real estate as well) that came to a head in 1997 and the Philippines government passed sweeping legislation to help prevent this from happening again. The government "rescued" banks holding loans which were defaulted on by enacting the Special Purpose Vehicle Act of 2002. Republic Act 9182 (amended by Republic Act 9343). This enabled banks here to clear their balance sheets of the non-performing assets they were carrying. And it worked. Why did this work when the economic bailouts of the US and Europe have not? Because the economy here was (and still is) much smaller than that of first world countries. The major difference is that banks here don't like speculators when it comes to either residential or commercial real estate. It's also important to realize that there was quite a lag in real estate prices for years and the market is only catching up with what the market will bear.

 

Bottom line: people who continue to have preconceived ideas that the RP is a backward, third world developing nation are going to lose out on a lot of business oppoutunities. And you can bet your bottom dollar that just like iam states above, the US (and Europe) WILL see their currencies devalued at an alarming rate within the next two years.

 

Ok. I come down off the soap box now :D

 

 

dont fall that is a very tall soap box your standing on.... And all this strength is based on what exports ???? real estate is being held up with new tools like bank loans especially on condo units as well as the 10% of the people who work over seas and the huge surge in foreigners coming to the Philippines if you look at most foreigners who live on a pension of say 2,000 a month us that is the same as how many locals working at 300 peso a day walk in the malls and a huge quantity of the shoppers are foreigners and their GF ? wives.. and i dont mean just western foreigners... in the subdivision i live in of the 65 houses built i would say 40 belong to fil am / OFW or foreigners that is a large percentage

 

 

i think what has caused so many problems in the west is CREDIT ,,, cards.. homes ,,, cars... and in the last 8 years i have seen in the philippines these same things growing very fast...

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sperry

dont fall that is a very tall soap box your standing on.... And all this strength is based on what exports ???? real estate is being held up with new tools like bank loans especially on condo units as well as the 10% of the people who work over seas and the huge surge in foreigners coming to the Philippines if you look at most foreigners who live on a pension of say 2,000 a month us that is the same as how many locals working at 300 peso a day walk in the malls and a huge quantity of the shoppers are foreigners and their GF ? wives.. and i dont mean just western foreigners... in the subdivision i live in of the 65 houses built i would say 40 belong to fil am / OFW or foreigners that is a large percentage

 

 

i think what has caused so many problems in the west is CREDIT ,,, cards.. homes ,,, cars... and in the last 8 years i have seen in the philippines these same things growing very fast...

 

well maybe. but if you take out a housing loan in the europe ur gonna pay about 3->4%, dont care what it is in the US, but ur gonna pay maybe 10% in the Philippines. that high rate is going to keep any housing bubble firmly under control.

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