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PHILIPPINES TREASURY NOTES


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CardiacKid

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...

Easy credit. Buy now, pay later. IF the OFW continues to work in the Middle East. Far too many are now coming home. Many countries are now making it more and more difficult for OFW's to get jobs, and the Saudiazation program in Saudi Arabia is just the beginning. The Nursing boom has gone bust, and with Europe and the U.S. having high unemployment, it is unlikely they will continue to hire foreign workers. Call centers that pay 20 thousand a month are not capable of producing enough jobs to sustain the economy. What is needed is Foreign Direct Investment, but the Constitution forbids foreign ownership. How does a bank recoup a loan when the OFW is back in RP with no job? Who pays the credit card debt? Who pays for the loan on a home when it is foreclosed? Foreigners coming to the Philippines are less likely to buy a house here when by law they cannot own it, and land titles are often spurious. Tourism will never be the success that politicians want it to be. The country is too dirty, too backward, and far more expensive to visit than Malaysia or Thailand. The basic mindset that foreigners are evil and are all rich will have to change. Personal safety is another issue. Why would someone visit here where there is an active MILF and NPA and kidnapping for ransom gangs operating with what appears to be impunity? Why would a multinational corporation send their employees to such a place? Wages are far too high here for anything manufactured here to be competitive in the world markets. Plus you have the labor unions that stage demonstrations and produce very little. Lastly,You have a legal system that cannot move faster than a snail's pace and often reverses itself. Now add corruption to the mix and you have a very unflattering picture of a location to invest stockholders money.
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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

Brucewayne

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.

 

 

 

 

Maybe the little brother of "Legacy" http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20081220-179007/Legacy-owner-accused-of-running-a-scam

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the.lone.gunman

BMO ( Bank of Montreal) TSX , common stock yields 5.10%. CM (Canadian Imperial Bank of Commerce) TSX , common stock yields 5%. Rock solid dividends with some upside to the stock. Canadian Banks are backed by the government of Canada. It's as bullet proof as my financial adviser could make me.

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Stranded Shipscook

I suggest strongly,that if one has 5 or10million php available, he should go"forum shopping" at local banks, that includes international local Branches. ( HSBC for example)

 

Other good banks are Unionbank, RCBC, Metrobank, BDO (that's my personal list in that order )

 

In this matter i share this of me.(i keep it short ):

95 i had 350kphp left froma busted landdeal. Didn't wanted to change it back,so i asked the Manager of Unionbank Colon Branch,what he can suggest for the next 6 months.

He suggested some "short term cash T-Bills" ( don't know the exact term any more), but those are sums lend to Business at higher rates in order to keep their cashflow, as they also have money in long term investments or simply a "short" and need some to pay bills.

 

Time of each contract between 4 weeks to 6 weeks only.

The Manager offered to keep the contracts in the drawer and i sign them later upon my return.

 

So i flew back to Germany and things happened, ( Divorce, new businesses) and i did not return to the Philippines until 1998. Worse, i lost the contact with the Bank Manager.And he also had my fax number wrong.

The 97 currency crisis came and i thought my money is goodbye, at least half of it.

 

Well, 98 i came back and the manager greeted me happy, the pile of"contracts" was half a meter high

 

My invested Money after Tax was 665k php. Could have been more, but the Manager was "conservative" and did not went into the most lucrative contracts without asking me. Interest rates were different each contract, in 95 all about 11- 12 %, 96 between 9-10 %, 97 between 12% and 422% during the height of the Asian Currency Crisis, which explains why no money was lost. 98 back to normal 12 %, but i cashed in.

 

Talking about the risk, Yes, in theory the "borrowers" could go Bankrupt, but in my case ( and as i saw the individual contracts) the borrowers were Companies such as San Miguel Corporation. Union Bank is also very careful.

 

But this is why i say, go Bank shopping and ask the Managers (as many as possible) if they got some "hidden deals" such as the one i got. ( and only got because the manager was a friend)

 

And don't bother to ask if you got no REAL BIG cash to invest. Same back home btw.

 

One word to all"published" and Advertised Programs- they are usually not worth it. Safe- yes, but the interest is a joke. That applies here and abroad as well.

Edited by Guenther Vomberg
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expat08

.......................................................................................

 

How about this...

 

I'll laugh when someone loses out on the increases if inflation and bad economy hits with jacked up Central Bank Rates here. (blessing for those with T Bills and T Bonds)

 

I'll laugh so hard as to cry when the debts of those papers are not honored cause the Philippines tanked and the IMF nor anyone could save you. Or they restructure their currency if potential.

 

What idiot would advise you to invest in 25 year notes from a country like the Philippines? Let's check the history of the past 25 years.

 

Let alone other countries or any country that is 3rd world.

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expat08

You could do better playing with a 30 year consistent holiday seasonal company on the stock market back in the USA..........9%?

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expat08

Some of you make things overly complex and sometimes overly simple.

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Contango

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.

 

Yep i don't think its possible to have a housing bubble with interest rates at around 10% ~ however there is some over building of Condos in Manila...and i can see a time where one or two of the big developers could get into financial trouble.

 

---------------

 

I'm constantly surprised by the financial conservatism displayed by member of this forum....i would think it would be wise to have at least a couple of million pesos in a combination of T-Bills and PSE listed Stocks to provide a low risk peso income stream to supplement your other (back home) investments.

Edited by Contango
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smokey

Maybe the little brother of "Legacy" http://newsinfo.inqu...-running-a-scam

 

 

 

i think the problem in investment of long term bonds is the exchange rate i was very lucky to buy a bond when the rate was 53 to the dollar and cash it in at 44 to he dollar... but what if it went the other way

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smokey

Yep i don't think its possible to have a housing bubble with interest rates at around 10% ~ however there is some over building of Condos in Manila...and i can see a time where one or two of the big developers could get into financial trouble.

 

---------------

 

I'm constantly surprised by the financial conservatism displayed by member of this forum....i would think it would be wise to have at least a couple of million pesos in a combination of T-Bills and PSE listed Stocks to provide a low risk peso income stream to supplement your other (back home) investments.

 

 

 

Lots of the developers have been in that spot and did very well as most condo units are sold before they are even built so its the little people who get burned then the developer comes back as another company,, great for them not so great for the sap that not only paid in advance for the condo but borrowed the money to do so

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Brucewayne

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.

 

 

 

You may not care about the U.S., but if you are trying to follow investments, try to remember that the rest of the world follows the USD first.

It is the #1 leading currency in the world market.

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Brucewayne

i think the problem in investment of long term bonds is the exchange rate i was very lucky to buy a bond when the rate was 53 to the dollar and cash it in at 44 to he dollar... but what if it went the other way

 

 

 

You did luck out.

Thanks to the Arroyo administration artificially inflating the value of the Peso, any long term investments here are very risky at best.

What her advisors did was pretty ingenious, but only helped the wealthy, but the bubble will pop and even though it may not happen this year, it is catching up with the Philippines.

I am thinking it WILL be this year, but things also looked bad last year when it was disclosed that the Philippines was afraid that they couldn't repay some of the large loans that The Arroyo administration made.

A little hocus-pocus, smoke and mirrors, throw in some bull and do a little financial rearranging and Wallah!, all is fixed.....for now.

All monetary markets are tied in with the USD, no question about that.

The Philippines lost a lot of money in the way of grants when all started going south for Europe, but not a wimper out of the Philippines about that, because they knew they could count on the good old USA to bail them out with a fresh shipment every month.

What Arroyo's people did was to change and/or borrow all of it's loans into USD accounts.

With the flood of USD flowing into this country, it was a simple matter to artificially inflate the value of their Peso (opposite of China artificially deflating the value of their Yen) and now the Philippines can not only invest in S&P stocks, but with their higher credit rating they are also into Dow Jones, which I feel is a big mistake.

If at any time the market takes a nosedive, or the U.S. stops aid in a major way, the Philippines will be in the pot.

I have no doubt whatsoever, even with all of the propaganda here, the Peso will hit the upper 40s to 50 by Christmas again this year.

We don't want a complete crash here no matter what anyone says, as a lot of things can be stopped, electricity, gas supplies, imported food, etc.

All we and the poor of the Philippines really need are honesty in financial dealings and a fair exchange for our money, which most Filipinos also depend on one way or another.

Can't expect that to happen if the government is not honest though, can we?

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sandwindstars

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?

 

Good question Kreole. I have to agree with the expat in Siquijor, although 25 years is too long for me. I bought 5 year RTB's, 4 years ago, at 7% (net 5.5%). Why? Government bonds have sovereign guarantee lower risks than stocks and mutual funds and guaranteed returns. Phil RTB's have quarterly returns automatically deposited.

 

As for the long term, your contact maybe on the right track with 25 years at 9% judging from the forecasts of like Goldman Sachs which sees the country as the next 11. The Philippines worst situation was in the early 80's (Marcos era). If I'm not mistaken, unlike its Latin Am counterparts (Argentina, Brazil) the country has not declared moratorium on their debt nor gone bankrupt (like what may be happening to some Euro countries.) It has paid their Marcos years debt (much of it belonged then) since Corry Aquino's term. Ex pres Arroyo fast traced payment of the country's debt, including the Asian Crisis bailout (did not even use all of that I read) and the country has become a creditor nation.

 

In short is the country's sovereign guarantee good enough? Based on track record and forecasts, way better than stocks and mutual funds or condominium (I own a condotel unit, and it's not pretty). But the interest rate is going down now, you won't get 9% nor even 7%. Interest rate of some of the European countries are going up, deemed higher risk.

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sperry

BMO ( Bank of Montreal) TSX , common stock yields 5.10%. CM (Canadian Imperial Bank of Commerce) TSX , common stock yields 5%. Rock solid dividends with some upside to the stock. Canadian Banks are backed by the government of Canada. It's as bullet proof as my financial adviser could make me.

 

Thanks for tip.

 

Yes I like Canada, indeed it is my safe currency play, even if zerohedge does reckon the solidity of the banks is a myth and it might be overly dependent on China.

But I don't want currency risk. I'm going to royally screwed when the Euro bites the dust; once is enough.

 

Since the 7 years I've been coming to to the Philippines the GBP is down from 103 to 67, and the euro is already down from 70 to 54, and that's despite higher inflation here.

Those lamps won't be lit again in my lifetime.

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