IS THE PHILIPPINES truly a sea of economic calm amid so much pain from the global recession? It’s either that or we are experiencing the calm before the storm. Here are my selected readings for this week for those who want to be in the know, but had little time to read the business pages.
Personal Finance
If there is one thing that we all must truly undersand by now is that economic storms will come and they will go, as I have always said. They are a fact of life, so make sure your personal finances are protected against these storms. Making sure your online financial details are protected from fraudsters were a major theme in INQUIRER.net this week.
Stolen credit cards sold online—I didn’t realize just how pervasive this crime is until this article came out. Beware and guard your credit card details!
Guide to safe online shopping—Find out how to shop online safely.
Food and immune boosters—I love the suggestions here. Losing your health is a sure way to have a personal financial shake-up, so stock up on common local vegetables like ampalaya and malunggay, which are immune boosters. I cook malunggay like I cook laing and my kids love it! Let me know if you want a recipe.
10 most common money mistakes—This has been in INQUIRER.net’s most-read and most-emailed list for one whole week, which tells me just how interested people are in what they might be doing wrong with their personal financial management.
Economic News
This week’s economic news indicate the possible storm clouds in the horizon, but several news still point to a softer landing for the Philippines compared with the rest of the world.
Crisis dampens interest in home loans—BPI and PSBank have reported 15% to 20% drop in mortgage lending especially to Filipinos working or living overseas. That means people are either already losing their jobs and are postponing major purchases or are afraid they will do so. The interest rate scenario looks promising, though, for those who believe they have secure cash flows in the coming years. Look at the next article why.
Inflation eases, rate cut eyed—Inflation is now at 9.9%, already at single-digit levels and better than the overall forecast, as food and oil prices continue to slide. Really good news for the depressed times.
Central bank hints at rate cut—The central bank did indeed say there’s “greater monetary policy space” for the Monetary Board (econo-speak for “yeah, we might lower overnight rates in the next meeting”). Since the government is in “economic expansion” mode and inflation is no longer a problem, every economist in town is expecting rates to get cut. I suspect that banks will only be too eager to reduce their lending rates for mortgages and business loans as they run after those who have the financial capability to make good on their loans.
Oil falls $3 to lowest in nearly 4 years—I don’t care much for the oil cartels so as far as I’m concerned, oil prices can go down all the way to $30 per barrel so that consumers will be happy. I do hope, however, that people will not go back to bad driving habits or companies will lose the urgency to develop better alternatives to oil as a source of power just because the commodity is getting cheap again. Oil is dirty. It pollutes the environment and it is not sustainable.
PCCI: P100-B infra fund ready soon—interesting pieces of news, these two articles. PCCI talking about a P100-billion infrastructure fund? Last I checked, it wasn’t a government agency! But PCCI businessmen do see a weakening in the economy next year to 3% and possible job losses or corporate failures.
BPOs plan to hire more agents—fast and furious are the only two words I use to describe how the business process outsourcing industry has grown in the last decade, and they have become another major source of foreign currency for the country, not to mention jobs. With the global financial upheaval, there has been a lot of talk on whether or not it can weather this storm. Big industry players last week have repeated they will hire more agents, and some are even expanding operations. Cross your fingers!
Construction still a big growth driver—if the government will pump-prime the economy, then construction will push growth up. The only problem with construction is the poor quality of jobs in the industry.
How long, how deep is the US recession?—a question on everyone’s minds—and nobody knows the answer.
Investing News
10-month pre-need plan sales down 21%–no surprise here. First, corporate failures in the industry have turned off customers big-time, and second, the cleaning up you would expect in the industry just isn’t happening!
Peso rallies versus the dollar—great news for expat Filipinos out there, especially with Christmas season coming! Who would have thought it would be at P49.08 against the dollar by now? Sige nga
20-year T-bond rate hits 9.5%–long-term yields of government securities, which you can use as benchmark for loans or debt with the same maturity, slide when the economic outlook is good and rise when the economy appears to be shaky. These rates are set when the government auctions government securities (the schedule is found in the Bureau of Treasury website). 20-year Treasury bond rates used to be at 13.88% back in the 2002 but has gone down through the years. Inflation projection for long-term retirement planning is normally at 8%, so a 9.5% rate offers only 1.5 percentage point difference. Not much, if you ask me, but they also offer a stability of return.
Corporate News
Corporate news also dished out more Meralco boardroom drama as if as a parallel story for the De la hoya and Pacquiao fight. This one, however, is no “dream match”, but as you can see, it has become a highly charged topic for corporate watchers and some shareholders are already trying to take advantage of it by snapping up Meralco shares in anticipation of trading gains. Some good reads below:
Battle for control of Meralco looms
Lopezes strengthen hold on power unit
BPI expects bigger profit in ‘09
Century Properties to invest P15B in ‘09
From the web:
Three new articles from my readings around the web:
How to salvage your retirement from CNNMoney shows Walter Updegrave at his best. Making you realize that the news is bad but somehow turning everything into a doable strategy. One is to scale back the retirement lifestyle which is only logical but hard to do for many folks.
Maybe it’s time to buy that first house illustrates why people who have great credit scores can sail through crises and more.
We’re going to party like it’s 1929 is an article I wish I could have written. It’s fun to read.
