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PHILIPPINES TREASURY NOTES


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smokey

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?

 

 

 

i said that two years ago and was told i was full of shit... i watched the exchange rate close as i converted thousands every month and i noticed when the us or nato who ever gave the philippines 1/2 billion dollars the rate dropped against the dollar fast... and then again when a 200 million Dollar amount came for some weather damage again right after the peso went strong... so all LOANS if you call them that as a few are 1% payable after 10 years ...so its the next , next presidents problem...

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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

the.lone.gunman

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.

With all due respect to Zero Hedge.......IF Canadian banks get in trouble, the government must bail them out.That's how the system works there. No bank failures. And the 5% dividend income is taxed at half the rate that interest income is taxed at.
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sperry

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.

 

I agree with you

 

And this article http://news.ph.msn.com/regional/new-philippine-maturity-reaping-rewards-analysts says why I agree. Things are changing here, fast!

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Contango

You guys are so conservative..the net is such an enabler, pretty much everything can be traded and yet you guys seem trapped to chase such low returns, everything is a punt (gamble) every currency, every instrument a punt...you guys think your being safe and conservative...and your not.

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Brucewayne

I agree with you

 

And this article http://news.ph.msn.c...ewards-analysts says why I agree. Things are changing here, fast!

 

 

The Philippines does have a certain amount of safeguard against a Real Estate bubble, but they do have a bubble and it is not growing larger.

Condos and properties had spiraled out of control for several years now, but that is slowing down and even reversing.

I am not sure what the implications are, but something is going to give here.

Property prices are only going up in recently developing areas, but a lot of the land is coming down in price.

When I first arrived in Cebu in 2006, one couldn't rent a condo for less than P35,000 but I have seen the prices drop steadily over the last year or two and even saw some advertised at only P12,000 per month.

With the Peso artificially inflated and all of the world financial problems, I think we will see one of two things here.

Either the inflated Peso will catch up with the Philippines and will be forced into a sudden, drastic drop,causing some very wealthy Filipinos to lose their fortunes, or the real estate/condo bubble will burst, leaving tens of thousands of working Filipinos bankrupt.

Too many empty buildings and unused homes are sitting around for the inflation here to continue at the rate it has up until now.

The main thing I would be concerned about is, how will this affect our utility services and other necessary services as I have NO investment here.

The banks are quite well protected for the most part with a few exceptions.

Banks are protected by charging high down payments and set up costs for loans, they are lending out at appx. 23% interest as comapred to 4% on real estate in the U.S.

Also banks here are very picky as to whom they loan money to (that is what has saved them so far), but the PDIC is notorious for not paying off, so a lot of people here don't trust them or the banks they cover.

Many people in the Philippines can't afford a bank account anyway, as the banks are charging 1st world fees (and higher) in a 3rd world country, thereby cutting appx. 1/4 or more of the potential depositors out of the financial picture.

Hard to stay afloat forever if one turns away too many customers and live in a plastic bubble created by an artificially inflated monetary system.

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smokey

The Philippines does have a safeguard against a certain amount of Real Estate bubbles, but they do have a bubble.

Condos and properties had spiraled out of control for several years now, but that is slowing down and even reversing.

I am not sure what the implications are, but something is going to give here.

Property prices are only going up in recently developing areas, but a lot of the land is coming down in price.

When I first arrived in Cebu in 2006, one couldn't rent a condo for less than P35,000 but I have seen the prices drop steadily over the last yera or two and even saw some advertised at only P12,000 per month.

With the Peso artificially inflated and all of the world financial problems, I think we will see one of two things here.

Either the inflated Peso will catch up with the Philippines and will be forced into a sudden, drastic drop, or the real estate/condo bubble will burst, leaving tens of thousands of Filipinos bankrupt.

Too many empty buildings and unused homes are sitting around for the inflation here to continue at the rate it has up until now.

The main thing I would be concerned about is, how will this affect our utility services and other necessary services.

The banks are properly protected for the most part with a few exceptions, but if nobody has money to feed them, how will they possibly be able to feed the rate of interest demanded by the notes?

Banks are protected by charging high down payments and set up costs for loans, they are lending out at appx. 23% interest as comapred to 4% on real estate in the U.S.

Also banks here are very picky as to whom they loan money to (that is what has saved them so far), but the PDIC is notorious for not paying off, so a lot of people here don't trust them or the banks they cover.

Most people in the Philippines can't afford a bank account anyway, as the banks are charging 1st world fees in a 3rd world country, thereby cutting appx. 1/4 of the potential depositors out of the financial picture.

Hard to stay afloat forever if one turns away too many customers.

 

 

 

when i first came in 2002 a small condo was 55 sq meters and now they invented the 12 sq meter condo.... measure it out and that is why the rent is less we have a daughter who rented one by luke for her one year TB treatment it was so small 3 people inside make it crowded 12 sq meters is ONE half of most hotel rooms...

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Brucewayne

when i first came in 2002 a small condo was 55 sq meters and now they invented the 12 sq meter condo.... measure it out and that is why the rent is less we have a daughter who rented one by luke for her one year TB treatment it was so small 3 people inside make it crowded 12 sq meters is ONE half of most hotel rooms...

 

Still not good and lots of units are standing empty, new and old alike.

I don't see how anyone could stand living in what most people would consider a standard sized bedroom, but to each his/her own.

For P12,000 one can find a reasonably nice home further out from the city, but I guess that is not an option for some.

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