Philippine economy dives into recession in worst slump on record

[GeoffH]

I suspected it would be bad but this is worse than I thought it would be 

https://www.channelnewsasia.com/news/asia/philippine-economy-dives-into-recession-in-worst-slump-on-record-12994870

Edited August 6, 2020 by GeoffH

[graham59]

Exactly I had anticipated...and of course with worse to come.

Now I'm no international finance expert, but if you close a country down and put most of its inhabitants out of work for several months. 

No rocket science involved.

 

 

[Jollygoodfellow]

My gf work fired over 300 people this week. I can see things getting worse.

[peterfe]

Keep your money in USD or EUR, folks. I remember a bloke with a Thai wife who thought he was clever putting his money in a Thai bank in Thai baht where he got a much higher interest rate than in Europe. Then suddenly one day the baht was devalued by a much larger percentage than his interest rate, so he didn't feel so clever any more 

[GeoffH]

10 hours ago, graham59 said:

Now I'm no international finance expert, but if you close a country down and put most of its inhabitants out of work for several months. 

 

It will vary by country and will depend upon which country to a degree.  A country with a highly automated workforce or a workforce that can to a large degree work remotely and maintain productivity is going to suffer less harm than one that relys to a high degree on individual labor.

The Philippines however is going to be very badly hit because labor is so cheap here that businesses hire extra people to do a job instead of buying machinery.

 

 

[GeoffH]

3 minutes ago, peterfe said:

KThen suddenly one day the baht was devalued by a much larger percentage than his interest rate, so he didn't feel so clever any more 

There is also the issue that 'government bank guarantees' in third world countries tend to cover much smaller amounts.

Two examples I'm familiar with; the Philippines 'guarantees' up to 250,000 peso in your bank accounts where as the Aussie government guarantees up to $250,000 per bank (so I could have for example 2 banks each with $250,000 and if both failed then I'm supposed to get my money back).

 

[RBM]

33 minutes ago, peterfe said:

Keep your money in USD or EUR, folks. I remember a bloke with a Thai wife who thought he was clever putting his money in a Thai bank in Thai baht where he got a much higher interest rate than in Europe. Then suddenly one day the baht was devalued by a much larger percentage than his interest rate, so he didn't feel so clever any more 

Different story now, suspect that was a long time ago.

[RBM]

28 minutes ago, GeoffH said:

There is also the issue that 'government bank guarantees' in third world countries tend to cover much smaller amounts.

Two examples I'm familiar with; the Philippines 'guarantees' up to 250,000 peso in your bank accounts where as the Aussie government guarantees up to $250,000 per bank (so I could have for example 2 banks each with $250,000 and if both failed then I'm supposed to get my money back).

 

yes correct but kinda strange how the value of the peso has been holding up. Not so much against a resurgent Aussie but most other currencies.

When we are out shopping or driving around in Bacolod there is absolutely no sign of hardship or poverty. Not to say its not happening, no increase in begging or any other signs which surprises me. 

My guess is give it a few more months and the situation may well change.

[Yeochief]

2 minutes ago, RBM said:

yes correct but kinda strange how the value of the peso has been holding up

I was just ready to say the same thing, the peso has actually grown stronger to the US dollar over the last 6 months, I know the dollar is on a little bit of a rebound now.   Banks put a figure out there that so much money is guaranteed, but if they go under, how long will it take to get that guarantee back?  

[Gas]

55 minutes ago, GeoffH said:

There is also the issue that 'government bank guarantees' in third world countries tend to cover much smaller amounts.

Two examples I'm familiar with; the Philippines 'guarantees' up to 250,000 peso in your bank accounts where as the Aussie government guarantees up to $250,000 per bank (so I could have for example 2 banks each with $250,000 and if both failed then I'm supposed to get my money back).

 

Its 500,00 per account and you can have more than one account in each bank. For example my wife and I have individual accounts, but we also have a joint account.