Investing in Real Estate in the Philippines [Archive] - Page 16

3cr

March 10th, 2009, 06:03 AM

Consuelo de bobo it is. We're not out of the woods yet that's for sure and I don't think the Philippines will be sheltered from this global meltdown as GMA wants to make us believe especially in this era of global trade. We're definitely going to be affected and the coming Q2&Q3 results will give us a better picture of just how bad and if recession will indeed hit the Philippines like a good number of businessmen I've talked to believe will happen. Hold on tight... we'll soon find out what the future brings...

Consuelo de bobo
TAKIN' CARE OF BUSINESS
By Babe Romualdez
March 10, 2009 12:00 AM
http://www.philstar.com/Article.aspx?articleId=447093&publicationSubCategoryId=66

New York – Only when you get to New York will you begin to realize just how serious the financial crisis really is. As they say, “to see is to believe.” Just a couple of days ago, 375 homes were put up for auction at the Javits Center, described as the city’s biggest foreclosure sale ever. Starting bids were at 60 percent off the homes’ value, like a $700,000 house getting an opening bid of $149,000. Some 30,000 homes were reportedly auctioned off last year. This year, nine million Americans are in danger of losing the roofs over their heads. One of the unmistakable signs also seen by New Yorkers that things are not going very well is New York Metropolitan Opera’s decision to use Marc Chagall paintings as collateral for creditors. Met staffers took a 10 percent pay cut, and artists are being asked to lower their fees.

Analysts say the situation is not yet as bad as the 1981-1982 recession, but if the downturn continues until next month, this recession could go down in US history as the longest ever since the postwar period. Unemployment rose to 8.1 percent in February with 651,000 jobs lost. In December, 681,000 jobs were cut while another 655,000 Americans lost their jobs in January. People become unemployed almost everyday, and the number of jobless Americans has reached 4.4 million since December 2007. Today, there are over 12.5 million unemployed Americans.

The US financial sector triggered the global crisis, but the most affected city has been New York, with more than 50,000 Wall Street jobs disappearing. All over the US, white collar workers are getting laid off, with 180,000 getting the pink slip last month, compared to 168,000 job cuts in manufacturing and 104,000 in construction. While Obama has been trying to keep hopes up, he is pragmatic enough to temper his speeches with cautionary messages, telling Americans that things could get worse before they get any better. After unveiling his recovery plan, he warned that it “won’t turn the economy around or solve every problem. All of this takes time and it will take patience.”

A close friend of mine, Larry Martinez who is an old timer living in New York for over 30 years confided to me that he has “never seen anything like it.” Most Filipinos like him who have been thinking of retiring have no choice now but to push back retirement plans for another four or five years because their 401ks or retirement funds have greatly diminished in value, in fact by almost 60 percent.

Those planning to go back to the Philippines and have put up down payments for retirements homes or condominiums are now in danger of foregoing this kind of commitment because of job losses becoming imminent. Already there are so many Filipinos losing their homes after 20 years, which is adding to the uncertainty. A lot of them are so scared of losing their jobs. Many are also thinking of moving out of New York which is one of the most expensive cities in the world. Perhaps the only ones who are relatively secure are Filipinos working at the United Nations which we assume will not close shop – unless it’s already the end of the world.

The American Institute of Certified Public Accountants said 35 percent of those approaching retirement age are delaying retirement plans, with more than 60 percent planning to work for another five years. As a matter of fact, “the new 65 is now 70.” The unemployment rate for those over 65 reached a 31-year high of five percent in December. Many are also taking part-time work to survive the crisis, which the US Labor Department says increased by 3.7 million in the last 12 months.

The problem in the US has reached Philippine shores as seen in the diminished number of “balikbayan trips” to the country and lower remittances from US-based OFWs, but the effects of the global financial crisis have not been felt as much. In the first place, the jobless rate has been at double digit levels most of the time, plus the fact that home credit is not as readily available as in the US. Perhaps it’s also the inherent Filipino trait of being frugal and the fact that people feel uneasy getting into debt - which is why a relatively large number of Filipinos are not living on borrowed money.

While there have been a number of job losses in the past few months, there are still some bright spots in the horizon. A couple of weeks ago during the PEZA forum hosted by the Manila Overseas Press Club, PEZA director Lilia de Lima disclosed a four percent increase in the number of locators during the first quarter this year. In fact, she is so optimistic that 2009 targets will remain, with an increase by as much as 10 percent since last year. She also downplayed job losses brought by the closing of Intel, a US microchip company, saying that other locators will eventually absorb these job cuts.

And whether we like it or not, credit should really go to GMA and the tough fiscal reforms she initiated a few years ago that helped make the Philippine economy more resilient as compared to some of our Asian neighbors. Financial analysts I talked to in New York admit that major reforms undertaken by GMA’s administration helped cushion the impact of the global financial crisis – coupled by the fact that we were not really in the realm of big-time borrowers who now face the severe effects of the meltdown.

There are some who say this is consuelo de bobo (a Spanish phrase loosely interpreted as “a fool’s consolation” and normally used to describe a prize that is worth very little). You can call it consuelo de bobo or whatever – but at the end of the day, the fact is the Philippines is still considered lucky.

_____________________________________

Emerging market risks loom
Business World
http://www.bworldonline.com/BW031009/content.php?id=001

EMERGING economies, including the Philippines, should brace for the worst and expect dwindling export revenues and remittances from workers overseas as well as rising capital outflows in the next 12 months through 2010, the Asian Development Bank (ADB) warned yesterday.

In a speech that opened a two-day forum in Manila, ADB President Haruhiko Kuroda issued a stark warning that the region remains vulnerable to spillover effects from the global financial crisis that sprang from the US.

"As the crisis unfolds, it is becoming apparent that no country could remain immune," Mr. Kuroda told an audience of Asian finance ministers and monetary authorities.

Already, the region shed $9.6 trillion in wealth last year, about a year’s worth of economic output and a fifth of the $50 trillion in financial losses globally, a report released yesterday by the Manila-based bank said.

The massive figure reflects the extent of the integration of emerging and developing nations into the global economy, bolstering critics of the so-called decoupling theory in which developing economies are supposed to be immune from the crisis in Western economies. The ADB said such interconnection is "unlikely to unwind."

"Most emerging market economies, including in developing Asia and Latin America, are at a crossroads, and the next twelve to eighteen months will be very difficult," said the ADB report titled "Global Financial Turmoil and Emerging Market Economies: Major contagion and a shocking loss of wealth?"

The Hard Facts

"The perception that they had broken the links with the larger economies has been painfully refuted by the hard facts of the last 18 months."

The ADB, which projects the region’s economic growth to slip by 2-2.5 percentage points this year, said the decline is only a "minimum" adverse outcome of the fallout from the crisis.

"Even as Asia and Latin America have diversified their investment and trading partners, the effect of the slowdown on exports, finance and investment is earthshaking," the ADB said.

The outlook for countries that benefit from remittances, including the Philippines — which joins India and Mexico as the largest recipients of money sent home by workers overseas — is dim, the ADB said.

The Philippines saw a 14% growth in remittances last year to $16.4 billion. Various forecasts predict zero to single-digit growth this year.

"The prospects for 2009 are equally dire, with adverse consequences for the well being of many millions of households among developing countries," the report read.

The bank is scheduled to put out its country-specific economic outlook on the Philippines by the end of the month.

A deterioration in the region’s external accounts, mainly from the large sum of capital outflows, is one of the more worrisome consequences of the crisis, the ADB said.

"The external accounts are reflecting the consequences of the fall in prices, economic activity, and in wealth, and capital flows are falling drastically," it pointed out.

The ADB noted that Asia’s economies are lagging behind their developed counterparts in terms of rolling out stimulus packages to soften the blow of the global downturn.

In an interview, Ashok Sharma, ADB director for South Asia financial sector, public management and trade, said countries that rolled out the stimulus plans early on were "better off."

While most of the pump-priming activities were geared toward job creation and public investment, the manufacturing and export sectors should not be left out, he said. "What should be fundamental to the stimulus is helping the manufacturing sectorand trying to see exporters are not hurt," he said, adding that wider budget deficits that allow the government to spend more would be acceptable.

Merchandise exports last year dropped 2.9% to $49.023 billion from $50.466 billion in 2007. December 2008 alone showed a 40.4% drop to $2.672 billion from $4.482 billion in the same month in 2007. The December 2008 data was also a 23.9% decrease from $3.513 billion the previous month.

Sought for comment, the deputy director-general of the National Economic and Development Authority, Augusto B. Santos, noted that the P1.415-trillion national budget for this year, which includes part of the P330-billion stimulus package of the Arroyo government, is due for signing not later than next week. "As soon as the budget is signed, spending can start immediately," he said in a phone interview.

3cr

March 10th, 2009, 06:59 AM

The silver lining in all this?

Asia to take the lead in new world order
Business World
http://www.bworldonline.com/BW031009/content.php?id=005

ASIAN NATIONS will take a lead role in a new global financial order arising from a deep downturn, triggered by the worst financial debacle since the Great Depression, a former chief of the International Monetary Fund (IMF) said yesterday.

In a keynote address delivered yesterday before a forum in Manila of finance ministers and monetary authorities from South Asia, Michel Camdessus said emerging economies will have more say in global financial affairs, backing a road map the Group of 20 (G-20) drew up in November last year.

Leaders from 20 major industrialized and developing countries had met in Washington in November last year in a bid to overhaul the global financial system, blamed as the culprit for the credit crisis that is driving the world into recession. They pledged rapid action to contain the crisis, including the end of financial deregulation. But observers have noted that their rhetoric fell short of a concrete plan for financial reform.

Mr. Camdessus, who steered the IMF for nearly 13 years to 2000, said a "key building block" for the new global financial architecture was giving the Washington-based lender power more than just the economic and political clout it had at the height of the 1997 Asian financial crisis.

At the heart of Mr. Camdessus’ proposed new world order is Asia, whose huge reserves could be utilized for the temporary refinancing of the IMF. "Could such new architecture serve the world well? I think so. But provided an essential condition is fulfilled — that the developing and emerging countries, particularly from Asia, decide to own this architecture and to play their full role of major actors of the new world community," Mr. Camdessus said.

The IMF is empowered to monitor monetary policy and exchange rates, as well as provide temporary financial assistance to countries with balance of payments problems. Its relevance, however, has been questioned as economic fortunes shift to Asia, whose formerly IMF-indebted countries, including the Philippines, have since been freed from its yoke.

Mr. Camdessus, now honorary Governor of the Banque de France, wanted an amendment in the IMF’s mandate to give it surveillance powers over financial transactions.

"We need a brand new IMF. Second, a new governance group," he told the audience. "A brand new IMF — three basic reforms are needed for that: a new mandate, a high council entrusted with new political responsibility and the real establishment of an unquestionable legitimacy."

He stressed the urgency to restructure the IMF’s quota system, which is based on a country’s relative size in the world economy and determines a member’s voting power. The changes, he said, should be made "right away and no later than 2010."

3cr

March 10th, 2009, 07:20 AM

^^ Yup I agree. One bedroom imho is definitely better if budget permitting. Another thing you might also need to consider is a flat unit or a loft unit. That too has advantages and disadvantages that need to be considered... incidentally there is a thread discussing this (loft versus flat) should you need to check it out...

bustero

March 10th, 2009, 02:37 PM

feb numbers are out so far RE still doing ok, let's see how it goes.

on another note J Ayala is out of ALI

bartman

March 10th, 2009, 04:25 PM

if it's just a question between a 1BR or a studio, then a 1BR is the easy choice. for most developments, a studio will have less floor space than a 1BR.

however, the thread starter seems to have a caveat; that the floor space between the two remain equal. so handsome_rob, please clarify....

are you thinking of converting a studio into a 1BR?

3cr

March 10th, 2009, 05:31 PM

Manila among world’s least expensive cities
Daily Tribune
03/11/2009
http://www.tribune.net.ph/business/20090311bus4.html

Singapore — The strong yen has made Tokyo and Osaka the world’s most expensive cities for expatriates while sharp currency declines lowered living costs in Australia and New Zealand, a survey showed.

Of the world’s 10 least expensive cities, five are from Asia — Manila, Kathmandu, New Delhi, Mumbai and Karachi.

The cost of living in Manila is half that of New York, while that of Karachi, the cheapest city in the survey, is just over one-third, EIU said.

Because the yuan is tightly linked to the US dollar, costs in Chinese cities increased as other currencies tumbled against the greenback, said an Economist Intelligence Unit (EIU) survey received here late Monday.

Oslo and Paris were the world’s costliest cities in the previous EIU survey.

Shanghai, with a cost of living only two percent cheaper than New York’s, is currently more expensive than Sydney, said the survey carried out last month.

The previous survey was carried out in September last year, just as a housing mortgage mess in the United States was unraveling into a full-blown global financial and economic crisis.

Seven of the world’s 10 most expensive cities in the latest survey are in Europe, with Singapore joining Tokyo and Osaka as the only Asian cities on the list.

“Two factors drive the relative cost of living: local prices and exchange rates,” said Jon Copestake, the editor of the report.

“Normally, our ranking of cities by cost of living is relatively stable, but... the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities.”

In the survey, EIU compared the cost of products and services in 140 cities. It is aimed at helping companies calculate allowances for executives and their families being sent overseas.

France’s capital Paris is now the world’s third-most expensive city, down from number two in the EIU’s previous survey, followed by Copenhagen and former number one Oslo.

Zurich was in sixth place, while Frankfurt and Helsinki tied in seventh place, followed by Geneva.

“The decline in European currencies, most notably the euro, sterling and Norwegian kroner, has driven a significant weakening in the relative cost of living for many European cities,” it said.

Singapore, Southeast Asia’s most advanced economy, was ranked as the 10th most expensive city worldwide, followed by Hong Kong, which rose to 11th place from 28th.

Shanghai rose to 29th place from 45th, while Beijing rose to 36th place from 58th. Sydney fell to 35th, down from 17th.

3cr

March 10th, 2009, 06:29 PM

^^ If all things being equal, it will really depend on the size of the unit then... :)

bartman

March 10th, 2009, 08:37 PM

^^ correct!
just imagine a 35sqm (or smaller) 1BR

jbkayaker12

March 10th, 2009, 09:40 PM

Encouraging news from Vegas even in this time of world economic woes.:) Don't bite off more than you can chew!!!!

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

LOCAL HOME SALES MORE THAN DOUBLE IN FEBRUARY

LAS VEGAS REVIEW-JOURNAL

Las Vegas home sales more than doubled in February from the same month a year ago, although median home prices continue to plummet as foreclosures dominate the market, the Greater Las Vegas Association of Realtors reported today.

There were 2,288 single-family home sales during the month, a 108.4 percent increase from a year ago and up 2.9 percent from January. Condo and townhome sales increased 166 percent in February to 442.

The median price of a single-family home was $155,603, down 36.9 percent from a year ago. The price of condos and townhomes fell even further, down 50 percent to $75,000.

Inventory of homes available for sale declined 1.6 percent to 22,142, roughly a 10-month supply. February statistics are in line with trends over the past year or so, Realtors associaiton president Sue Naumann said.

“It’s encouraging to see more homes selling each month, but we know declining prices are driving these increasing sales,” she said. “And with bank-owned properties accounting for at least three out every four sales in Southern Nevada, foreclosures are still forcing home prices to fall.”

venntro

March 11th, 2009, 03:06 AM

Global crisis upsets costly cities rankings (http://http://www.manilatimes.net/national/2009/march/11/yehey/top_stories/20090311top9.html)

SINGAPORE: The strong yen has made Tokyo and Osaka the world’s most expensive cities for expatriates, while sharp currency declines lowered living costs in Australia and New Zealand, a survey showed.

Manila is among the world 10-least expensive cities in the world, said an Economist Intelligence Unit (EIU) survey received here late Monday.

Because the yuan is tightly linked to the US dollar, costs in Chinese cities increased as other currencies tumbled against the greenback, according to the study.

Oslo and Paris were the world’s costliest cities in the previous EIU survey.

Shanghai, with a cost of living only 2 percent cheaper than New York City’s, is currently more expensive than Sydney, said the survey carried out last month.

The previous survey was carried out in September last year, just as a housing mortgage mess in the United States was unraveling into a full-blown global financial and economic crisis.

Seven of the world’s 10 most expensive cities in the latest survey are in Europe, with Singapore joining Tokyo and Osaka as the only Asian cities on the list.

Factors driving cost

“Two factors drive the relative cost of living: local prices and exchange rates,” said Jon Copestake, the editor of the report.

“Normally, our ranking of cities by cost of living is relatively stable, but . . . the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities.”

In the survey, EIU compared the cost of products and services in 140 cities. It is aimed at helping companies calculate allowances for executives and their families being sent overseas.

France’s capital Paris is now the world’s third-most expensive city, down from number two in the EIU’s previous survey, followed by Copenhagen and former number one Oslo.

Zurich was in sixth place, while Frankfurt and Helsinki tied in seventh place, followed by Geneva.

“The decline in European currencies, most notably the euro, sterling and Norwegian krone, has driven a significant weakening in the relative cost of living for many European cities,” it said.

Asian cities

Singapore, Southeast Asia’s most advanced economy, was ranked as the 10th most expensive city worldwide, followed by Hong Kong, which rose to 11th place from 28th.

Shanghai rose to 29th place from 45th, while Beijing rose to 36th place from 58th. Sydney fell to 35th, down from 17th.

Thailand’s capital, Bangkok, is number 72 in the worldwide rankings, but is the second-most expensive city in Southeast Asia after Singapore.

Kuala Lumpur in Malaysia is number 90 worldwide and number three in Southeast Asia.

Of the world’s 10 least expensive cities, five are from Asia—Manila, Kathmandu, New Delhi, Mumbai and Karachi.

The cost of living in Manila is half that of New York City, while that of Karachi, the cheapest city in the survey, is just over one-third, EIU said.

portludlow

March 11th, 2009, 04:28 AM

^^ hehehehehe @bartman as always in his analytical ways. He thinks like an engineer. :cheers: :) The question does not give you details to ponder.

Rene Ybardolaza

March 14th, 2009, 12:54 AM

Porknight

March 14th, 2009, 01:31 PM

^^ well Dubai is deeply affected by this crisis Rp for what I know according to my sources is still doing quite well.

Iyo

March 15th, 2009, 04:19 AM

Dubai, yeah thats what I afriad of imagine how many construction are on going and with this global crisis is coming look all the erupean country and now hiting australia and southeast asia. So its a matter of waitng to hit the Philipines and I hope the government will say something about the real thing, but as usaual most of them will really be quiet because of many reason.so a small investor or thinking to invest must be carefull .

3cr

March 15th, 2009, 05:19 AM

World Bank warns of "very dangerous" year ahead
http://sg.news.yahoo.com/afp/20090313/tts-finance-economy-worldbank-zoellick-g-c1b2fc3.html

AFP - Saturday, March 14LONDON (AFP) - - World Bank president Robert Zoellick said Friday that 2009 was turning into "a very dangerous year" for the global economy but warned G20 members against protectionist policies to fight the downturn.

"2009 is shaping up to be a very dangerous year," he told reporters ahead of Saturday's G20 finance ministers meeting on how best to tackle the worst economic slowdown in decades.

"I believe it will be a positive sign if the G20 supports extended IMF resources, condemns protectionism and supports practical solutions," Zoellick said.

The G20 includes the Group of Seven industrialised countries -- Britain, Canada, France, Germany, Italy, Japan and the United States -- the European Union and leading developing nations including Brazil, China and India.

Finance ministers and central bank leaders from the United States and Europe go into Saturday's meeting deeply divided on whether stimulus packages or tighter regulation of the finance sector should be the way forward.

Saturday's gathering in Horsham, near London, is expected to lay the groundwork for a G20 heads of state summit on April 2.

"If the leaders feel they are running out of constructive tools, they might start to point fingers and take protectionist and isolationist actions and those are the negative spiral of events you saw in the (19)30s," Zoellick added on Friday.

The head of the World Bank also said that governments may have to provide fiscal stimulus into 2010 but stressed that such action should come "within a framework of fiscal sustainability."

He was speaking a day after warning in an interview that growth in the world economy would likely fall by up to 2.0 percent this year -- the first contraction since World War II.

Zoellick believes the outlook is worse than the International Monetary Fund (IMF) analysis of 0.5 percent growth for 2009, reported the Daily Mail newspaper, which carried an interview with him.

While the United States, the world's biggest economy, wants a coordinated international stimulus to fight the slowdown, some in Europe are suspicious of such a move and favour tightening regulation of markets and institutions.

In a boost for the United States -- Japan and China, the world's second and third largest economic powerhouses -- also embraced stimulus on Friday.

There have been public clashes in the last week on the best way forward, suggesting progress at the G20 finance ministers' talks on Saturday could be hampered by disagreement.

German Chancellor Angela Merkel reiterated Friday that she did not favour a new package of economic stimulus measures.

"We do not think much of the idea of a new package of measures" to underpin the economy, Merkel told a press conference in southern Munich after a meeting with employers.

Meanwhile a US proposal to substantially raise the IMF's resources signals a strong move in Washington toward multilateralism by the Obama administration in the face of the global economic crisis.

US Treasury Secretary Timothy Geithner on Wednesday said he would recommend to the Group of 20 leading nations that they support "substantially increasing emergency IMF resources" and called for them to lend to countries hit hard by the crisis.

According to his proposal, the New Arrangements to Borrow (NAB) of the International Monetary Fund "could be increased by up to 500 billion dollars and membership could be enlarged to include more G20 countries."

3cr

March 15th, 2009, 05:27 AM

Hopefully this encouraging news is a start of a good thing... Even the financial sector (banks) have posted some positive news of late which help with the Dow/Nasdaq big rally this week. Now will we be able to sustain the momentum? Let's hope and pray so.

Obama program helping US economy: Summers
http://sg.news.yahoo.com/afp/20090314/tts-finance-economy-us-consumer-972e412_1.html

AFP - Saturday, March 14WASHINGTON (AFP) - - US President Barack Obama's economic program appears to have stabilized consumer spending, a key growth component of the recession-struck economy, adviser Lawrence Summers said on Friday.

"It is modestly encouraging that since it began to take shape consumer spending in the US, which was collapsing during the holiday season, appears, according to a number of indicators, to have stabilized," said Summers at a Washington forum.

__________________________________

US official: US Recession could end in '09
PhilStar
Updated March 16, 2009 09:19 AM
http://www.philstar.com/Article.aspx?articleId=449060&publicationSubCategoryId=200

WASHINGTON -- America's recession "probably" will end this year if the government succeeds in bolstering the banking system, Federal Reserve Chairman Ben Bernanke said Sunday in a rare television interview.

In carefully hedged remarks in a taped interview with CBS' "60 Minutes," Bernanke seemed to express a bit more optimism that this could be done.

Still, Bernanke stressed — as he did to Congress last month — that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally.

"We've seen some progress in the financial markets, absolutely," Bernanke said. "But until we get that stabilized and working normally, we're not going to see recovery.

"But we do have a plan. We're working on it. And, I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year."

Even if the recession, which began in December 2007, ends this year, the unemployment rate will keep climbing past the current quarter-century high of 8.1 percent, Bernanke said.

A growing number of economists think the jobless rate will hit 10 percent by the end of this year.

Asked about the biggest potential dangers now, Bernanke suggested a lack of "political will" to solve the financial crisis.

He said, though, that the US has averted the risk of plunging into a depression.

"I think we've gotten past that," he said.

It's rare for a sitting Fed chief to grant an interview, whether for broadcast or print. Bernanke said he chose to do so because it's an "extraordinary time" for the country, and it gave him a chance to speak directly to the American public. (A transcript of the interview was provided in advance of the broadcast.)

Bernanke spoke at a time of rising public anger over financial bailouts using taxpayer money. Battling the worst financial crisis since the 1930s, the government has put hundreds of billions of those dollars at risk to prop up troubled institutions and stabilize the banking system.

Institutions that have been thrown lifelines include American International Group Inc., Citigroup Inc., Bank of America Corp., mortgage giants Fannie Mae and Freddie Mac and others.

Democrats and Republicans on Capitol Hill have questioned the effectiveness of the rescue efforts and have demanded more information about how taxpayers' money is being used.

Bernanke's TV interview seemed to be part of a government public relations offensive. Treasury Secretary Timothy Geithner appeared on PBS' "The Charlie Rose Show" last week, discussing the financial crisis and the Obama's administration's relief efforts.

The Fed chief on Sunday's broadcast repeated his ire over the AIG bailout, saying that over the past 18 months, that was the case that angered him the most. He says he "slammed the phone more than a few times on discussing AIG."

The government's four efforts to save the troubled insurance giant total more than $170 billion. A collapse of AIG would have wreaked havoc on the global economy, the Fed has said.

AIG ignited fresh outrage over the weekend with news that it's making $165 million in bonus payments to executives on Sunday, most of them in the unit that sold risky financial contracts that caused huge losses for AIG.

When the financial crisis intensified last fall, Bernanke and President George W. Bush's Treasury Secretary Henry Paulson rushed to Capitol Hill for help. That led to the swift enactment of a $700 billion bailout package in October. Since then, banks have received billions in capital injections in return for government ownership stakes in them.

Looking back, Bernanke said the world came close to a financial meltdown. Asked how close, Bernanke responded: "It was very close."

Bernanke admitted that the Fed could have done a better job of overseeing banks. Critics say lax regulatory oversight contributed to the crisis.

Bernanke said he believes all the big banks the Fed regulates are solvent. Big banks won't fail under his watch, Bernanke said — though, if necessary, the government should try to "wind it down in a safe way."

3cr

March 16th, 2009, 05:02 AM

Kailangan talaga sariling sikap at hindi dapat umasa sa iba o irason ang global economy sa pagsama ng ating economy. Kung walang external demand then kailangan magkaroon ng internal demand for our goods and services. Isama na rin ang increased infra & agri spending for sustainability at bawasan na ang corruption na yan para naman magsurvive ang ating bansa. Yan dapat trabahuhin ng ating gobyerno ngayong may global crisis pangeconomiya. Of course we lso have to do our share. Kailangan tayo maging mas masipag at mapursige at di maging tamad at mayabang (living beyond our means)...

We are in a good place to survive global crisis
By Corazon P. Guidote
Philippine Daily Inquirer
First Posted 01:59:00 03/15/2009
http://newsinfo.inquirer.net/breakingnews/nation/view/20090315-194200/We-are-in-a-good-place-to-survive-global-crisis

MANILA, Philippines -- Filipinos are in excellent condition to survive and to grow out of this global economic crisis.

Fundamentally, our economy is resilient, borne by a spirit of self-empowerment and resourcefulness.

We are in a place where people find ways to get by and even prosper, and only the minority depend on government. It’s a place where the great majority depend mainly on themselves and thrive on hard work, perseverance, self-sacrifice and a strong faith in and love for God and country.

It’s a place where the majority are kind and honest, where moral values reign supreme, where small acts of kindness and generosity can evoke a big smile and a warm sense of gratitude.

We are in a place where just a million centavos can generate a million bright ideas, and with it comes a lot of enthusiasm.

From where we are, it’s a heady situation watching Wall Street nosedive, knowing that no one has the power to stop it, not even United States President Barack Obama. And even if the free-fall was so apparent in the charts a few months ago, it was still difficult to take it all in when it happened.

I was a stockbroker for most of my career and worked for powerful institutions like Citibank and UBS. These global banks taught me a lot about reading markets, risk analysis, forecasting, good governance and capital market development. Sadly, however, many Wall Street institutions eventually yielded to pressures of conformity and compromise which slowly dissolved the moral compass that had guided them for so long, a compass that would have deterred them from running straight into this catastrophe.

White knight mentality

It became a system that fed into unconditional patronage which, in turn, silenced those who questioned the norm even if they had every reason to do so. Wall Street also thrived on a white knight mentality which made it easier to hide the outcome of poor decisions.

White knights come in many forms. They come in as creditors or as new shareholders through IPOs (initial public offerings), mergers and acquisitions, consolidations or private equity. Nothing wrong with that. They are, in fact, good for the system.

But white knights can also be abused; or contrarily, some white knights can have their own dark agenda. That said, white knights have become a common refuge for many weak institutions, so common that they eventually fostered institutional greed, weakness and complacency.

We now see the ill effects of such unconditional patronage with the global crisis ravaging the largest and primest of institutions. None of these white knights are left standing. Even the influential investor Warren Buffett’s fund showed a severe contraction last year, he won’t have much of an appetite to keep on buying disgraced institutions and distressed assets. He will need to be more discriminating because bargains now abound in Wall Street. The question is, which ones will survive and recover?

US, China

In the eyes of the global market, the white knights left standing are the governments of the US and China. The US government is a natural choice first, because it should face the consequences of its poor regulation and complacency. And second, because even without ample reserves, it thinks it can borrow its way out of the crisis and just keep on printing money. Kids in the US are too young anyway to know that they will end up paying for these bailouts from their future incomes. Poor kids...

And China? Well, it has massive reserves and is the US’ largest lender to date. But many who think that China can and should save the world are not only foolhardy but are downright inconsiderate. What has China got to do with this crisis? Admittedly, it is a large exporter to the US and the rest of the world, so it stands to benefit from a global recovery. But China has more than a billion mouths to feed, many of which still fall below the poverty line. Its funds are best spent enriching its own population, a huge market that can potentially sustain the growth of the Asian region and the rest of the world. The financial markets have no business saying that China is not releasing enough stimulus funds because a million dollars spent in China can go a much longer way than a million dollars spent in the US.

Era of reckoning

Interestingly, we have become valuable witnesses to a historic event unfolding as we breathe. We now live in an era of reckoning for Wall Street’s double speak, one that led to monstrous institutions which, to this day, hide behind the mantle of overly generous credit ratings, regardless of their shameless pleading for endless bailouts.

The painful reality is we haven’t seen the worst yet. Events continue to unfold, suggesting that more losses could emerge from large financial institutions and manufacturing companies, possibly in the next two quarters, and with that goes more downsizing and job cuts, particularly in the US.

This means over and above the four million Americans who are now jobless and millions of homes still on the verge of foreclosure. This also means that some banks haven’t yet reflected their contingent losses on home mortgages frozen by a debt moratorium for homeowners until a government scheme can be put in place to assist them.

It’s situations like this that have the propensity to change the global landscape for political and economic power.

The good news is, it is pregnant with opportunities because the crisis has a sobering effect on the environment and on economies. The strongest and most prepared will survive. Those who survive will grow to be much larger and stronger.

It’s a good time to keep a very open mind for radical and out-of-the box solutions because new avenues for growth and development will emerge and so will new business models.

Learning from crisis

Let us learn from this crisis, but more importantly, let’s start finding ways to get out of it unscathed. It’s good to keep the government in mind. But government will be too busy with the upcoming presidential elections. Its resources are limited and its ways unpredictable. It is only rich with promises.

As private citizens, let’s focus on being productive and make the most of our God-given talents and our country’s rich natural resources. Let’s help those who stand to lose their jobs to become productive in other ways. Let’s believe in our strengths and our creative skills. We are a strong nation and a strong people. We have the power to take control of our own destiny. But, first things first, let’s believe that we are and believe that we can.

(The author is vice president of SM Investments Corp.)

terman1718

March 16th, 2009, 04:11 PM

How Philippine Real Estate Developers will Survive Today

It is quite obvious that Philippine Real Estate Developers are not as robust now compared to the previous 3 years due to the global economic slowdown, and therefore need new fresh tactics to survive.

The Inquirer Property section started a series of articles that stated “Asia is no longer insulated” from the financial crisis originating from the West (source: http://www.inquirer.net/propertyguide/aroundtown/view.php?db=1&article=20090314-194072). Global Property Guide’s survey of publicly-available house-price time-series for 2008 showed that Philippine Property prices were declining steadily. Even until now, the slope is still going down as we brokers ourselves experience difficulty in selling. Most people we talked to our holding on to their money, or simply have hard times themselves in making it.

According to the article, here is what Prince Christian Cruz, a Global Property Guide senior economist, suggests to Philippine Real Estate Developers to cope with the crisis:

• Provide cheaper properties by cutting back on certain amenities such as gyms, function halls and swimming pools. Location is more important to the working class Filipinos.

• Focus on accessibility to public transport

• Price properties according to the buying capacity of working and middle-class families. The international standard for affordable housing is three to five times the annual income. In other words, a Filipino worker who earns P10,000 a month can buy a Philippine property between P360,000 and P600,000.

• Offer rent-to-own schemes for better affordability

In other words, Mr. Cruz is suggesting developers should shift their focus from Overseas Filipinos an enormous local demand from the locally employed middle-class and working-class sector.

The second part of the Inquirer article quotes Alejandro Mañalac, president of the National Real Estate Association, saying that the Economic Slowdown is a blessing in disguise since there will be a smaller glut or oversupply of Philippine condominiums due to developers slowing down in new projects.

Mañalac also said the Ifric 15 issue (see my previous blog entry about it on http://www.realestatephilippinesblog.com/breaking-news-new-rule-to-hamper-philippine-real-estate-developers/) also made developers rethink their plans to build high-rise buildings (which takes three to five years to complete) in favor of end-user projects which they could finish within a year, and thus recognize their income in their books. “It’s a good thing that the implementation of this new accounting reporting standard was deferred until 2012,” he said, or else all of them would look bad to investors of their stocks.

Mr. Manalac also agrees with Mr. Cruz in terms of adjusting the payment schemes of properties for sale so that end users and the Filipino workers can afford it more. He reiterates that even though most of the Philippine Pre-selling projects are 60% sold, which gives them enough money to complete construction, developers should adjust their investment terms accordingly and not necessarily bring down prices, so that the remaining inventories of pre-sellers can be taken.

If you ask me, this suggestion should also apply to secondary sellers of Philippine property. They should try selling Rent-to-Own style, where in they can earn from the interest they charge to their tenants as well. In that way, they can help more Filipinos in owning their dream home while doing business also - a Win-Win situation for both buyer and seller :-)

Source: www.realestatephilippinesblog.com

tonyboy

March 16th, 2009, 04:20 PM

^^very interesting article...:)

btw..can you elaborate on this:
• Offer rent-to-own schemes for better affordability

i also like your blog..:cheers:

tonyboy

March 16th, 2009, 04:26 PM

:cheers1:Kailangan talaga sariling sikap at hindi dapat umasa sa iba o irason ang global economy sa pagsama ng ating economy. Kung walang external demand then kailangan magkaroon ng internal demand for our goods and services. Isama na rin ang increased infra & agri spending for sustainability at bawasan na ang corruption na yan para naman magsurvive ang ating bansa. Yan dapat trabahuhin ng ating gobyerno ngayong may global crisis pangeconomiya. Of course we also have to do our share. Kailangan tayo maging mas masipag :okay: at mapursige :applause:

..at di maging tamad :ohno: at mayabang:bash:(living beyond :ohno: our means)...

tama ka dyan boe...:cheers:

3cr

March 17th, 2009, 04:53 PM

O Oh could this be the first sign/manifestation of the recessionary effects of the world wide economic slowdown creeping up on the Philippines? Guess we'll soon find out...

Remittances hit five-year low in January
Business World
http://www.bworldonline.com/BW031709/content.php?id=051

REMITTANCES from Filipinos abroad in January registered the lowest annual growth in five years as the economic slowdown spread, the central bank said in a statement yesterday.

The Bangko Sentral ng Pilipinas (BSP) said remittances coursed through banks totaled $1.265 billion last January, barely improving from the $1.264 billion recorded in the same month last year — the lowest year-on-year growth in remittances since January 2004.

That miniscule growth rate also fared poorly against the 15% increase recorded in January 2008.

Inflows last January also fell from $1.4 billion in December, despite a central bank forecast on Friday that they would climb.

In December last year, remittances were just 0.8% more than a year earlier, against a 10.5% annual growth in November.

Flat this year

But the entire 2008 still managed to post 13.7% growth from the preceding year.

The central bank has said remittances will likely stay flat this year over 2008’s $16.4 billion.

But a Reuters poll of 10 economists showed a median forecast of a 6% fall in remittances this year from 2008.

Key driver

Growth in remittances, a key pillar of the Philippine economy, has fallen steadily since November and analysts said prospects could deteriorate further.

The slowdown suggests that the impact of the global economic slump has finally caught up with this key driver of Philippine economic growth.

"The slowdown in deployment beginning in November, the subsequent contraction in December by 5.8%, and the reported displacement of some land-based OFWs in some countries due to the global economic downturn contributed to the very modest increase in remittances in January," the BSP said in a statement.

"It was noted that the increase in remittances from sea-based workers [offset] the contraction from land-based workers, mainly from the United States," it added.

The major sources of remittances last January were the US, Saudi Arabia, Canada, Singapore, Japan, the United Kingdom, Italy and the United Arab Emirates (UAE).

But University of Asia and the Pacific Economist Victor A. Abola said the slower growth in remittances was not worrying, especially because the peso’s depreciation has mitigated the negative impact.

Not to worry

"Since there is a depreciation of the peso from last year, the actual money that came in may be 15% higher in value," he said in a phone interview.

He said the slowdown is not an indication of a trend for the rest of the year either, saying that remittances will hopefully pick up in the second quarter.

Remittances are seasonally at their lowest in the first few months of the year, with inflows picking up mid-year during school enrollment period and in the holiday season towards the end of the year.

Despite the decline, the BSP stayed optimistic, saying that preliminary government reports showing an increase in deployment of migrant workers may result in a bigger increase in remittances in February.

The BSP cited data from the Philippine Overseas Employment Agency, showing that the total number of deployed OFWs grew by a quarter in January.

"The double digit growth in the number of deployed OFWs is expected to add to the base of potential remitters moving forward," the central bank said

Still optimistic

The BSP said the government has also "forged" hiring agreements with Canada, Australia and other countries in the Middle East, particularly in the health-care, education, power and real estate sectors.

The government has also sent labor teams to crisis-affected host nations, which include South Korea, Taiwan and UAE, to help displaced OFWs there find employment in the same countries or in other countries.

BSP Deputy Governor Diwa C. Guinigundo last Friday cited reports from some banks to say that remittance inflows likely grew by double digit rate last January.

"Nothwithstanding the distressed global markets, OFW remittances managed to grow by 0.01% [last January from the same month in 2007]," said Mr. Guinigundo in a mobile "text" message to reporters yesterday.

"We remain optimistic that remittance performance will improve in the months ahead," he added.

sloanesquare

March 18th, 2009, 04:01 AM

Lili

March 18th, 2009, 05:19 AM

A bit off-tangent but related...

To the U.S. based folks here: Do you get a lot of offers of real estate investment in Costa Rica and other latin american countries?

jbkayaker12

March 18th, 2009, 05:41 AM

Foreclosure Rates In February, one in every 440 American households received either a default notice, bank repossession or auction sale notice, according to RealtyTrac's U.S. Foreclosure Market Report. Foreclosure filings are up 30 percent from a year ago. Here's a look at the states with the ten highest rates.

10. Ohio Rate: One in every 451 households
4. Florida Rate: One in every 188 households
3. California Rate: One in every 165 households
2. Arizona Rate: One in every 147 households

1. nevada: one in every 70 households

Which makes Nevada one of the most affordable in terms of real estate which many people are taking advantage of since resale of previously owned homes and condos are on the upswing since November of 2008.:)

I just did my taxes and Im about to received what was promised by the Obama Presidency since the settlement of my condo purchase was Jan 2009. Thank you!!!!:banana:

Don't bite off more than you can chew!!!!

ericlucky290

March 18th, 2009, 04:34 PM

House owner claims HGC denied him Maceda law protection (http://opinion.inquirer.net/inquireropinion/letterstotheeditor/view/20080527-139010/House-owner-claims-HGC-denied-him-Maceda-law-protection)Philippine Daily Inquirer
First Posted 01:10:00 05/27/2008

I am writing to seek help in getting back the hard-earned money that I have paid to Home Guaranty Corp. (HGC).

Nothing has come out of my letters to HGC and even to Vice President Noli de Castro, who is the head of the housing program of the government. My house and lot, which I bought with a loan from the Social Security Service in 1994, might be taken from me by HGC any time soon.

My house and lot, located in Dasmariñas, Cavite, is about to be foreclosed by HGC because of my failure to pay the loan due to economic hardships. My salary can hardly support the needs of my family.

I requested HGC to allow me to avail myself of the Cash Surrender Value program under the Maceda Law (Republic Act 6552) because I have already been paying my loan for about eight years—more or less P250,000. However, the HGC, through a certain Corazon G. Corpuz, vice president of Corporate Services Group, denied my request because, according to her, the agency’s Legal Group believes that I am not entitled to the protection contemplated under the Maceda Law.

Corpuz cited several reasons: among them, my relationship with HGC, which she said was that of a borrower in a loan agreement, no longer that of a buyer in the contract to sell. Hence, according to them, the Maceda Law does not apply to me. If so, I humbly believe that the true spirit of the RA 6552, which is supposed to protect my rights as a buyer against the seller’s oppressive terms and conditions, was not applied to me.

I believe I can still invoke the protection of RA 6552 against the seller of the realty, including any financial institution like HGC, while such contract is being enforced, because I am in fact the original buyer and remains as such.

JESUS L. BALAJADIA, General Trias, Cavite

On a similar situation, if a buyer is investing on a pre-selling condo unit and suddenly, he is unable to pay his amortization fee due to economic hardships, what will happen to the money he had paid?

According to my research, "MACEDA LAW - Right to refund applies as a requisite for cancellation of contract due to delinquency when the buyer has paid at least two years. Refund is 50% of total payments; additional 5% per year after 5th year."

Do our developers follow this law and the buyer only gets 50% on what he have paid? What happen if what have been paid is less than 2 years?

ChicTown

March 18th, 2009, 05:09 PM

A bit off-tangent but related...

To the U.S. based folks here: Do you get a lot of offers of real estate investment in Costa Rica and other latin american countries?

:)hi Lili. hope all is well! we do receive offers eveyday via email. it's annoying at times. for now, the Phils. is still our choice for retirement. i've traveled all of south america for business/pleasure, but it's not for me. maybe someday when my wife and i vacation to Costa Rica again, we'll pay more attention and evaluate all the possibilities. regards!:)

Lili

March 18th, 2009, 08:12 PM

^^ Thanks for your response @ChicTown. :) I was just so curious about all the hype about Costa Rica. They even offer "fly and buy" -- free plane fares and tour of the place. And it was featured in HGTV network.

Yeah, I think, if we are to invest and/or eventually retire, better in the Philippines.

terman1718

March 19th, 2009, 03:06 AM

^^very interesting article...:)

btw..can you elaborate on this:

i also like your blog..:cheers:

thank you tony :-)

Rent-to-Own gives the working class Filipinos more affordability since they only pay a certain amount per month and a very very low monthly. The owner, in turn, earns from the interest of the monthly rent that the tenant pays, and can also earn from the downpayment.

This is more applicable to foreclosed and bargain properties which are ready for occupancy. For developers, this is not such a good option since they have a big cash outlay which they want to recover right away, so they'd rather go into preselling where the proceeds of their pre-selling buyers can be used immediately to pay for construction costs...

bustero

March 19th, 2009, 03:59 AM

A couple links to how we here are doing. Strangely enough in a world of deflationary threats, the BSP is now afraid of Inflation!

Vol. XXII, No. 162
Thursday, March 19, 2009 | MANILA, PHILIPPINES
Today’s Headlines

BY PAOLO LUIS G. MONTECILLO, Reporter
BSP cautious on future rate cuts

CONCERNS THAT THE RISE in consumer prices may top expectations have prompted the Bangko Sentral ng Pilipinas (BSP) to adopt a more tempered approach to further interest rate easing.

While improved inflation outlooks provided room to loosen monetary policy in recent months, potential price pressures warranted a measured pace of rate easing, central bank Governor Amando M. Tetangco, Jr. told members of the Financial Executives Institute of the Philippines yesterday.

"Given that there are possible upside risks to inflation, notably the volatility in oil prices and exchange rates, increases in utility rates and potential price pressures coming from some agriculture commodities, a more measured adjustment of policy rates is needed," he said.

The BSP has cut its overnight borrowing and lending rates by a total of 125 basis points since December last year, in a bid to spur the economy amid declining inflation. The last reduction, a quarter-percentage point, was made on March 5.

The central bank’s Monetary Board next meets to consider policy on April 16.

Inflation peaked at 12.5% in August last year before dropping to 8% in December, with inflation averaging at 9.3% for the whole of 2008. In declined further in January to 7.1%, but inched higher again to 7.3% in February, due to the peso’s weakness and price increases for some oil products and other utilities.

The central bank expects inflation to average at 3.9% this year, within the 2.5% to 5.5% target.

Analysts said while inflation was a concern, there was no risk of a reversal in the general downtrend in consumer prices.

"Core inflation will be of greater concern, and from that perspective we see the central bank having more latitude for rate cuts as broader disinflation trend stays intact," said Vishnu Varathan, economist at Forecastweb.

Mr. Tetangco said the central bank remained committed to a market-determined exchange rate, and would only intervene in the market to avoid sharp fluctuations.

"We do not have a strong peso policy," he said. "The policy of the central bank is to allow market forces to determine the rate with scope for occasional participation in the market to smoothen volatilities."

The peso has fallen more than 2% against the US dollar since the start of the year as worries about the depth and breadth of the global economic downturn forced investors to dump risky assets.

Security Bank Treasurer Rafael S. Algarra said the central bank chief’s statement could be an indication that "More or less, they are probably working on the assumption of a quarter-point cut."

The BSP cut policy rates by 50 basis points twice in December and January, but slowed its easing to 25 basis points this month amid the higher February inflation results. — with a report from Reuters

http://bworld.com.ph/BW031909/content.php?id=003
Vol. XXII, No. 162
Thursday, March 19, 2009 | MANILA, PHILIPPINES
Today’s Headlines
Poll says RP, Indonesia to evade Asian contraction

BANGKOK — Singapore will be Southeast Asia’s weakest economy, shrinking nearly 5% this year, while Thailand faces its worst recession in 11 years, reflecting a collapse in exports across Asia, a Reuters poll shows.

SINGAPORE is expected to be the hardest hit economy in Southeast Asia.

The Philippines and Indonesia will be the only economies in the region to record growth this year but that growth will be sharply slower than in previous years, with Indonesia hit by falling prices of commodities, the bulk of its exports.

Singapore’s gross domestic product (GDP) is set to shrink 4.9% in 2009, according to the median forecast of the Reuters quarterly poll.

It would be city-state’s worst-ever economic slump and mark a sharp a turnaround after averaging 6.4% annual growth over the past five years.

As a small, open economy Singapore is being badly hit by the global downturn although analysts foresee it rebounding 3.9% in 2010 as fiscal stimulus kicks in.

In contrast, Southeast Asia’s biggest economy, Indonesia, is poised to expand by 4.0% this year and 5.1% in 2010 as exports contribute only about a third of GDP, making it much less dependent on trade than its neighbors.

Still, the growth forecast is well down from a 4.8% estimate in a poll three months ago. Weak exports and falling commodities prices weigh on growth, and analysts said the government needs to take further steps to support the economy on top of last month’s $6.1-billion fiscal stimulus package.

In Malaysia and Thailand, demand is hurt by crumbling exports. Thailand’s economy is set to shrink 1.5% this year while Malaysia will see a 1.2% contraction. Malaysia launched a $16-billion stimulus after January exports fell 28%, the biggest drop in nearly 30 years.

The poll forecast Malaysia would pick up slightly next year, with GDP growing 2.8% while Thailand is set for a 2.9% expansion in 2010.

First-quarter Thai GDP data due next month is expected to confirm that Southeast Asia’s second-largest economy is in recession after growth crashed by a record 6.1% in the fourth quarter of 2008 and exports plunged 25% in January. The forecast that the economy will shrink 1.5% this year reverses a 2.8% growth forecast three months ago and an actual 2.6% expansion in 2008.

"We see downside risks to remain with the advanced economies that might continue to slide deeper. In such a scenario, all export-led Asian economies including Thailand will likely be dragged down from this projection," said Pimonwan Mahujchariyawong, an economist at Kasikorn Research.

With tens of thousands laid off by exporters and tourism suffering from Bangkok airport’s closure amid political protests in November, aggressive stimulus spending by Prime Minister Abhisit Vejjajiva’s government and interest rate cuts will not spur demand enough to offset export falls, analysts said.

For the Philippines, the poll forecast growth of just 2.3% this year, lower than a 3.3% estimate in a similar poll in December and below government expectations for at least 3.7%, as a global recession chokes exports and slows remittance inflows. — Reuters
http://bworld.com.ph/BW031909/content.php?id=001

bustero

March 19th, 2009, 04:02 AM

A key indicator homestarts has turned UP, let's see if it's sustained or just a blip...

Vol. XXII, No. 162
Thursday, March 19, 2009 | MANILA, PHILIPPINES
Property & Infrastructure
US housing starts, permits post unexpected increase

WASHINGTON — US home construction starts and permits saw a surprise jump in February from 50-year low levels in a positive sign for the moribund home market at the epicenter of global financial crisis.

Housing starts — or privately owned new homes on which construction has started soared 22.2% to a seasonally adjusted annual rate of 583,000 units after seven months of decline, the Commerce Department said.

It was much higher than the revised January estimate of 477,000 and consensus forecast of 450,000.

Permits to build new homes, an indicator of future activity in the housing sector, rose 3% to a seasonally adjusted annual rate of 547,000 in February, the department said.

It was above the revised January rate of 531,000 and consensus forecast of 500,000.

Starts and permits were at their lowest pace in January since the Commerce Department began tracking the data in 1959.

A home mortgage meltdown triggered financial turmoil and plunged the world’s biggest economy into recession in December 2007.

Analysts were baffled by the rise in housing starts led by the notoriously volatile multifamily segment and aided by weather conditions, saying they do not see concrete signs of recovery in the housing market yet.

The real good news, they said, was the slight recovery in single-family building permits _ for the first time in nine months — and the stabilization in single-family starts.

The leap in starts propelled by an 82.3% surge in multifamily sector reversed almost all the drop in starts over the previous three months, analysts noted.

"We see no specific factor that might explain this jump; multifamily starts are always noisy but this is exceptional," said Ian Shepherdson of High Frequency Economics.

"With new home sales still falling and the [inventory] at a record (high) there is no reason for homebuilding to rise," he said.

"This is a temporary rebound, not a recovery, though it likely means the post-Lehman crash is over."

The September 2008 collapse of Lehman Brothers, one of Wall Street’s most established investment banks, on the heels of the home mortgage crisis sparked turmoil on financial markets across the world.

The latest figures showed that the increase in housing activity was concentrated in the wealthiest Northeast region, where starts jumped 89%.

Analysts were also unsure whether this month’s gain — even at a more measured pace — can be sustained in March although they believed a near $800-billion stimulus package and home foreclosure mitigation plan by President Barack Obama’s administrationm could help stabilize the housing market by year’s end.

Under a homeownership affordability plan launched this month, house owners facing foreclosures can get home loan interest rates lowered. — AFP

burrito

March 19th, 2009, 05:54 AM

On a similar situation, if a buyer is investing on a pre-selling condo unit and suddenly, he is unable to pay his amortization fee due to economic hardships, what will happen to the money he had paid?

According to my research, "MACEDA LAW - Right to refund applies as a requisite for cancellation of contract due to delinquency when the buyer has paid at least two years. Refund is 50% of total payments; additional 5% per year after 5th year."

Do our developers follow this law and the buyer only gets 50% on what he have paid? What happen if what have been paid is less than 2 years?

If I remember correctly, the Maceda Law is advantageous to holders of CTS, when the property is not yet titled in your name like that of pre-sold condos.

I also note here that payments for interests due to failure to pay on time are not part of the refund. In addition, the Maceda law has a 30 day grace period on payments for every year that you have paid which you can use once every 5 years. The Maceda law also affords you the right to prepay your loan's principal ahead of schedule (Acceleration of payment), the right to transfer your rights and right to be informed 30 days ahead of the cancellation of contract.

When paid less than two years, I believe you are not entitled to any refunds but are still afforded the 60 day grace period to pay the installment which began when the last installment became due. When still unable to pay, the developer has the right to cancel after 30 days of receipt by the buyer of a notarial notice cancelling the contract.

Based on what I experienced back in 2003 before I became a broker, the CTS for a condo from my developer had a clause which waives the right of refund negating the Law or some of the rights above, so be very vigilant when signing THAT contract to sell. Learn from my mistake. :bash:

I believe in the case of the Jesus from Cavite, given the few details, the HGC may already have a lien on the title through a mortgage and this could be why HGC is already planning to foreclose.

From what I can remember, due to the title and nature of a mortgage, the owner will not be able to apply the benefits of the Maceda Law. He has however, an ace left up his sleeves. He has the right to redeem the property one year from date of foreclosure.

blueDestiny

March 19th, 2009, 10:56 AM

Good Afternoon to everyone in the forums! :angel1: I would like to ask for help

Can anyone recommend any Marketing or Broker groups / companies who can help sell properties for developer companies (like my company, Sunshine 100).

At the moment, we require groups who are well experienced in selling properties in the San Juan area. It would also be better if the group / company's expertise is selling condominiums.

If possible, I would like to ask for the following information regarding these groups ...

1) Company name
2) Contact Person
3) Office Landline
4) Email
5) Website (if available)
6) Contact person's Company Cellphone Number (if available, or can be distributed)
7) Company Profile / Past Projects

Maybe we can make this thread in to some sort of directory listing for developers?

Thanks everyone ^_^

PS: At the Moment, my company is NOT looking for individual, independent brokers. Should this change I will immediately update my post. Thanks ^_^

tonyboy

March 19th, 2009, 04:40 PM

Many of us would like to see the Philippines come out unscathed from this economic chaos, but that hope is similar to an Ostrich sticking its head in the sand.

The simple facts are clear. Most buyers of Philippine real estate, especially the high-end deals, come from abroad. They are either speculators, investors, or future retirees. Some of these people are feeling the pain of the economic downturn through loss of jobs, loss of net worth, :ohno: etc.

Developers are a different breed of business people. As long as there is money, they will build, even if the signs of collapse are all around them. They are the most optimistic of the bunch and they always think their project is better than the rest and will survive an economic downturn.

To help prevent collapse of the real estate market ala DUBAI, a moratorium should be required by the government to stop further construction until the supply is diminished to a reasonable level.

My fear is a tightening credit market in the near future where buyers of these condos and houses will not have an opportunity to get financing to give them an exit strategy.

as an ardent motorcyclist...my pain and fear too..:gaah: that my retirement roth ira might never be enough to fulfill my life-long dream to ride my motorcycle from the concrete jungles of ayala avenue/makati....

http://i74.photobucket.com/albums/i279/tonyboy32/motorcyclesatayala.jpg

http://i74.photobucket.com/albums/i279/tonyboy32/motorbikes1.jpghttp://i74.photobucket.com/albums/i279/tonyboy32/bikes.jpg

...to palawan just like you :master: adventurously have already accomplished..

El Nido is a compact little town where it seems like everybody knows each other.

http://cocapepe.smugmug.com/photos/251847487_oR8fb-L.jpghttp://cocapepe.smugmug.com/photos/250808001_vZ76z-L.jpg
http://cocapepe.smugmug.com/photos/250807577_gwX7c-L.jpg

http://cocapepe.smugmug.com/photos/251852571_Ssd8G-L.jpg

great shots btw esp. your last serene picture worth imo... one million dollars ...:cheers::cheers2:

tonyboy

March 20th, 2009, 01:23 AM

thank you tony :-)

Rent-to-Own gives the working class Filipinos more affordability since they only pay a certain amount per month and a very very low monthly. The owner, in turn, earns from the interest of the monthly rent that the tenant pays, and can also earn from the downpayment.

This is more applicable to foreclosed and bargain properties which are ready for occupancy. For developers, this is not such a good option since they have a big cash outlay which they want to recover right away, so they'd rather go into preselling where the proceeds of their pre-selling buyers can be used immediately to pay for construction costs...

thanks for the info, terman. :cheers:

i e-mailed my sister in law your blog...unfortunately she lost her tenant from her rental condo property along roxas blvd.
http://i74.photobucket.com/albums/i279/tonyboy32/sunset/320090sunset3.jpghttp://i74.photobucket.com/albums/i279/tonyboy32/sunset/320090sunset2.jpg

it has been empty for two years na raw. go blame it on subprime slime..:bash:

she was asking me about the option - rent to own.. in lieu of outright selling.

yes..our family belongs to the working class.:)

so far, we are all working fulltime/overtime..perhaps even beyond the retirement age given the sad state of our global economic affairs. :ohno:

our consuelo de bobo is that most of us are in varied occupations which imho..will hopefully remain recession-proof..

you see..fortunately two are cpas who have to file income tax returns for clients..everyone has to pay taxes.

majority of us are in the medical field..people do get sick.

even one is working in a funeral parlor. :lol:

in america/world..two things are most certain--sickness/death and taxes!
:wink2:

3cr

March 20th, 2009, 06:04 AM

Global disaster recovery
By Michael J. Boskin
Business World
http://www.bworld.com.ph/BW032509/content.php?id=144

PALO ALTO — With the global economy mired in recession and financial crisis, policymakers everywhere have launched a series of monetary, financial, and fiscal responses.

Nevertheless, economies continue to contract, unemployment to rise, and wealth to decline.

Countries’ policy responses have ranged from modest to immense. China has undertaken a 6%-of-GDP stimulus package aimed (mostly) at infrastructure; the United States has enacted a two-year $800-billion spending and tax rebate package. The Federal Reserve and the Bank of England lowered short-term interest-rate targets to near zero and are adopting "quantitative easing" — i.e., continuous infusions of money.

Despite all this, massive excess bank reserves remain unlent. During Japan’s "lost decade," the Bank of Japan mostly bought Japanese government bonds, whereas the Fed is trying to reopen secondary markets for securitized private lending (which in the US is as important as bank lending), buying mortgage-backed securities and consumer and business loans, as well as US Treasury bonds. The Bank of England is buying UK government bonds ("gilts"). The European Central Bank, reflecting a strong inflation concern, has responded more slowly.

The US government is now insuring, lending, or spending over $10 trillion from guaranteeing money market funds to the AIG bailout to the Fed’s swap lines supporting foreign central banks. Analogous guarantees and bank bailouts have occurred in the other major economies (the ECB does not play this role for Europe; national governments do).

The fiscal response — tax cuts and spending increases — has varied considerably, being somewhat more tepid in debt-averse Europe than in the US and China. The US is hectoring Europe for more fiscal stimulus, while the Europeans pressure the US for greater and more globally coordinated financial regulation.

Will near-zero interest rates, financial-sector bailouts, and fiscal stimulus work? What else could be done?

As for fiscal measures, the empirical evidence suggests that three-quarters of consumption is based on longer-term economic prospects, not short-run disposable income. Thus, temporary tax rebates are mostly saved, not spent. Targeting liquidity-constrained people, especially the unemployed, is a bit more effective, as well as humane.

Some claim that infrastructure spending creates a big Keynesian "multiplier," a bigger increase in incomes than the initial spending (estimates range up to about 1.5 times the initial increase in spending). But infrastructure spending is usually slow - and almost always driven heavily by parochial political considerations. Japan’s annual 15-20-trillion- yen infrastructure-intensive stimulus didn’t prevent its lost decade. Nor did American government spending end the Great Depression (unemployment was still over 15% in 1939, a decade after the depression’s onset).

A more effective stimulus would speed up spending that needs to be done anyway. Or cut taxes to change the marginal calculus of firms on layoffs and consumers on spending — for example, by suspending the payroll tax on firms and workers for a year or suspending part or all of the sales tax or national value-added tax. Better yet would be permanent rate reductions and controls on future spending.

But governments should be wary of expensive fiscal stimulus. It is likely to yield little cushion for employment and income per dollar spent, while servicing the large debt accumulation will impede long-run growth, either by forcing substantial future tax increases or spending cuts, or by forcing central banks to inflate. Indeed, China frets over the safety of the US Treasury bonds that it holds.

In theory, enough quantitative easing implies future inflation, motivating people to buy big-ticket items, like cars and appliances, now to avoid the run-up in prices later. (In practice, it is an experiment.) High and rising inflation creates great costs and is difficult to reverse. After mitigating the downturn, central bankers must withdraw the immense infusion of liquidity before inflation takes off, a tricky maneuver.

The bottom line, though, is that better policies can at best mitigate the economic consequences of this horrible recession. We will not get out of this mess completely any time soon. Sometimes, strong recoveries follow recessions, but recovery following financial crises is always immensely painful, time-consuming, and traumatic.

The economists Ken Rogoff and Carmen Reinhart have argued that the major financial crises of the last century typically lasted a half-decade or longer.

In many of the previous banking crises, it was a country or a region that was hit hard (Argentina, Japan, etc.). This time, virtually every economy is suffering substantially and the banking crisis is global.

Policymakers will continue to throw whatever ammunition they can find at the problem, but it will take time for the deleveraging from the boom to run its course.

At times of serious economic distress, policymakers thrash about seeking solutions, and some people lose confidence in the economic system itself. Indeed, in the Great Depression of the 1930’s, it was common for Western intellectuals to turn to communism and central planning as a hoped-for panacea. Some never returned from that intellectual journey, despite the collapse of communism.

There is, of course, no case for going back to socialism and central planning. Once off government lifelines, we will need a better-regulated financial system.

Any financial institution that is too big or too interconnected to fail, or could quickly become so, must be closely regulated and monitored for risk and capital adequacy in real time, or be broken up into smaller firms.

In the meantime, let’s hope that Messrs. Bernanke, King, Trichet, and the world’s other central bank governors get monetary policy roughly right, and that our politicians don’t waste vast sums on ineffective fiscal stimulus.

3cr

March 20th, 2009, 07:12 AM

Experts say Asia needs to rely less on exports
Concentrate more on domestic demand
PhilStar
http://thefilipino.com/frames/philstar.htm

TOKYO (AP) — A panel of Asian researchers said the global financial crisis has underlined the critical need for the region to grow less export-dependent and instead foster domestic demand.

The representatives from the Asian Development Bank Institute, which brings together economic experts on the region, acknowledged such change will require time, perhaps as much as a decade.

The panel, called Asian Policy Forum, released a policy recommendation report Thursday ahead of the Group of 20 summit next month in London, where tackling the crisis is expected to top the agenda.

The vulnerability of Asia economies caused by their extreme reliance on exports has been viewed as a major problem for decades. But the US financial crisis, which threatens to bring more joblessness, poverty and social instability to Asia, is making the need for change more pressing than ever, researchers said.

“Exports to developed economies will be less of an engine of growth for the region,” said Masahiro Kawai, dean of Asian Development Bank Institute, and one of 19 researchers from Asian think tanks who signed the report.

“East Asia will need policies to facilitate a shift toward inclusive, sustainable growth driven by regional demand,” he said at the Foreign Correspondents’ Club of Japan in Tokyo.

Among the recommendations were calls for the US to clean up its financial and real estate sectors. It also proposed setting up a special fund in Asia as an alternative to the International Monetary Fund to help nations with financing problems.

Chalongphob Sussangkarn, of the Thailand Development Research Institute Foundation, said Asia had looked to the US as a global leader but was learning from the financial crisis that the US model for development was filled with weaknesses.

“Now, we are very confused about what is the best practice,” he said, adding that looking to one nation for leadership may have been misguided. “We need to do it collectively. If we ask leaders to do reform, nothing will happen.”

_________________________

Decoupled Asia better in facing crisis
Written by Dennis Estopace / Reporter
Business Mirror
Wednesday, 18 March 2009 23:09

GLOBALIZATION appears not at all as it has been tipped. A United Nations official opined on Wednesday that an Asia separated from the economies of the stagnating West may help countries in the region to survive the global economic crisis.

UN Assistant Secretary-General Ajay Chhibber stopped by Manila to emphasize this message as the United States, the world’s largest economy, continues to grapple with a black hole in its financial system.

“Asia must find ways to support each other,” said Chhibber, who is also UNDP Assistant Administrator and director of the Regional Bureau for Asia and the Pacific, before his meeting with Philippine foreign affairs officials.

Chhibber is touring Asia to find out more about the effects of the financial meltdown on economies in the region, with the end in view of encouraging Western economies allotting bailout funds for ailing companies to direct a portion to help poorer countries.

“It is important to spend money in bailing out banks, without which there is no longer hope for recovery. But the UN appeals for a small fraction, 0.5 to a percent, of those funds to be set aside to help poorer countries.”

Chhibber, alumnus of the Delhi School of Economics and a former economics professor at Georgetown University, estimates the crisis has pulled back to poverty 340 million Asians after they got out of the rut during a decade of rapid growth in the region.

Chhibber said these are the people who must be also considered in bailout funds or stimulus packages. Those managing these funds, he added, “should realize that [not] doing so could lead to political tensions in countries that were unable to save or have little savings before the crisis hit....It would be in [the West’s] best interest if the confidence on the financial system [returns on] a global scale.”

But Asian countries can’t wait for these rich but deeply troubled economies to realize such importance but must wean their economies away from overreliance on Western economies and strengthen intraregional trade.

“Not even the IMF [International Monetary Fund] can help Asia in this crisis. More would be reliance on intra-Asian trade” by avoiding protectionism.

“Over the last decade, an important feature of growth in Asia is a growing inequality: Employment is not growing as fast as GDP growth. Hence, whatever growth program Asia or Asian countries embark on today should shift attention to more employment generation growth.”

He said the UN Millennium Development Goals “are under threat, but still achievable if proper actions are taken. Some of these goals, to note, don’t take a lot of money and are not impossible to achieve within the deadline.”

3cr

March 20th, 2009, 07:54 AM

Deeper crisis in jobs sector
Written by Cai Ordinario / Reporter
Business Mirror
Thursday, 19 March 2009 22:47
http://www.businessmirror.com.ph/home/top-news/7773-deeper-crisis-in-jobs-sector.html

THE increase in the ranks of overseas Filipino workers and those engaged in the informal sector may just be symptoms of a deeper problem in the Philippine labor force, according to a new working paper from the Asian Development Bank (ADB).

The paper found that jobs in the country, generally, are not as financially rewarding compared with jobs outside the country or in the informal sector.

The ADB working paper “Quality of Jobs in the Philippines: Comparing Self-Employment with Wage Employment” was authored by the bank’s Economics and Research Department principal economist Rana Hasan and consultant Karl Robert Jandoc.

Using data from the 1994 to 2007 Labor Force Survey (LFS) and the Family Income and Expenditure Survey (FIES), the study said the average earnings of the self-employed was seen to decline a little, while that of both permanent and casual wage workers may have increased but hardly grew except for those at the top.

The paper defined a good-quality job as that which generates enough earnings as a product of the number of hours worked and wage rate. Other important characteristics include the stability of the job and earnings, whether the job provides protection from various risks such as to health and employment, provision for old age, working conditions, and prospects the job offers for future mobility.

“The fastest-growing job type is not permanent wage employment—the job type that the data analyzed here that. . . is the most remunerative and by definition stable. Instead, it is casual wage jobs that have increased the fastest. Finally, and most importantly, both the LFS wage data as well as the matched FIES-LFS earnings data indicate weak growth in wages and earnings for workers in general.”

“Despite the average gross domestic product growth of 4 percent between 1994 and 2006, real wages have grown on average by only 1.12 percent.” It said this is the most alarming feature of the study results.

The paper said earnings of self-employed workers decreased at every point of income distribution while earnings of permanent workers, particularly those belonging to the top 25 percent of the income distribution, posted growth.

The study stated that wages of permanent workers grew faster than those of casual workers, 1.2 percent versus 1 percent, respectively; wages of the college-educated grew faster than those of the less educated, 0.94 percent versus 0.27 percent for the secondary educated and 0.46 percent for the primary educated.

Further, the wages of skilled white-collar workers grew much faster than that of production workers, 1.54 percent versus 0.06 percent, but were slower than clerical and sales workers at 1.68 percent; while service-sector wages grew considerably faster than those in the industry sector, 1.84 percent versus -0.05 percent.

The authors also noted that it was only casual workers whose earnings grew at most points of the distribution. The paper inferred that it is possible that some permanent jobs have already become casual jobs. This, in turn, could explain why earnings of permanent workers seem to erode while those of casual workers seem to perform well.

The study said, however, that because of the generally “low salaries and wages” offered by permanent jobs, many workers choose to become casual workers or become self-employed.

The ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the ADB staff, consultants or resource persons.

______________________________________

RP growth forecasts cut anew
Investment banks cite crisis’ impact on exports, investments, remittances...
Business World
http://www.bworldonline.com/BW032009/content.php?id=001

GROWTH PROJECTIONS for the Philippines and other Southeast Asian nations have been trimmed by major investment banks, which cited the global downturn’s toll on exports, investments, and remittances.

Credit Suisse said the Philippines would likely post gross domestic product (GDP) growth of just 1.5% for the year, while Goldman Sachs dropped an earlier forecast of 1.8% growth and said a 0.5% contraction was now more likely.

Citigroup, meanwhile, cut its forecast to 2% from 3%.

The latest forecasts are lower than the International Monetary Fund’s 2.25% and the World Bank’s 3%, and compare to the official government target of 3.7-4.4% for the year.

Credit ratings agencies’ outlooks are similarly low, with Standard & Poor’s forecast at 2.2%, Fitch Ratings at 2%, and Moody’s Investors Service at 3.3%.

Growth in 2008 was 4.6%, down from 2007’s 31-year high of 7.3%.

Credit Suisse, in a research note, said private consumption — the main driver of economic growth — was likely to take a hit from a contraction in remittances sent home by overseas Filipino workers (OFWs).

The Bangko Sentral ng Pilipinas expects inflows to stay flat at some $16.4 billion but Credit Suisse said the country was likely to see outright drops in the coming months, moderating later in the year considering that the estimated nine million-strong migrant Filipino workforce is well-diversified geographically.

It said exports were likely to deteriorate further with the local electronics industry expecting sales to slump by 20-30% within the year.

"Tighter credit conditions and weaker sentiment are likely to slow investment growth sharply," said Cem Karacadag, Singapore-based economist at Credit Suisse.

The bank said such the growth risk should prompt the Bangko Sentral ng Pilipinas (BSP) to bring down its overnight borrowing rate to 4-4.5% from the current 4.75% for the rest of the year.

Citigroup, meanwhile, said the worst case scenario for remittances would be a 30% contraction arising from combination of job and wage cuts in host countries.

"Our worst case scenario for OFW remittances this year would be sharply lower flows in the range of $11.4 billion to $13 billion," Citigroup analyst Jun Trinidad said.

He said the number of new hires and re-hires will likely be halved and deployment drop to around 800,000 for the year, the lowest since 2001 and down from one million annually since 2006.

Wages are also likely to fall by as much as 15%, he said.

Slower remittance flows will lead to lower government revenues and a budget deficit of as high as 3% of GDP, roughly equivalent to P229 billion, Citigroup said. This is higher than the government’s target of 2.2% of GDP, or around P177 billion.

Goldman Sachs, meanwhile, said in a note that Singapore could see an 8% contraction, worse than the -4% forecast earlier, due to a slowing real estate market and shrinking investment.

It also cut its GDP forecasts for 2009 for four other Southeast Asian economies. In addition to the Philippines, its said Malaysia would shrink 3.5% from growth of 1.7% previously, Thailand slipping 4% from a 0.8% drop, and Indonesia growing at a slower 2.5% from 3.0%.

"We reiterate our view that Singapore has one of the highest exposures to weakness in external demand, because of its high ratio of exports to GDP and the high portion of exports-driven domestic demand," it said.

HSBC lowered growth forecasts for Singapore to -7% and for Malaysia to -3.5% , from -5% and 0.5% previously.

Credit Suisse saw a 6.5% contraction for Singapore, a 5.2% contraction for Japan as frozen trade hits exporters, but 8% growth for China given its policy stimulus.

3cr

March 20th, 2009, 09:01 AM

RP banks get 'negative' credit outlook
By Des Ferriols Updated March 20, 2009 12:00 AM
http://www.philstar.com/Article.aspx?articleId=450061&publicationSubCategoryId=66

MANILA, Philippines - Moody’s Investors Service announced yesterday that its fundamental credit outlook for the Philippine banking system is “negative”, reflecting expectations that a slowing economy would contribute to a cyclical weakening in the country’s bank credit fundamentals.

Moody’s said even the regulatory issues surrounding the collapse of 12 rural banks under the Legacy Group highlighted weaknesses in the Bangko Sentral ng Pilipinas’ (BSP) ability to move swiftly and decisively on collapsing banks.

“Moody’s industry outlook for Philippine banks is negative based on our expectation that challenges in their operating environment will depress bank earnings and pressure their asset quality,” said Richard Lung, a Moody’s vice president/senior analyst.

Despite the overall negative outlook, however, Lung said Moody’s outlook for the “intrinsic stand-alone” financial strength ratings of individual banks is still “stable.”

“We believe that they can absorb these pressures without experiencing a prolonged deterioration in their relative credit metrics,” Lung explained.

Moody’s released its latest Banking System Outlook for the Philippines which detailed the credit rating agency’s outlook for the next 12 to 18 months.

The report covered positive and negative rating trends, the impact of the global credit crunch and slowdown in Philippine economic growth, and key system performance measures, including financial fundamentals.

Moody’s said in the report that Philippine banks remained broadly stable in 2008 but the impact of the global recession is beginning to take its toll on the industry, especially with declining remittances that would have a negative impact on consumer spending and, in turn, affect corporate performances.

Lung said that an additional challenge to banks from the global recession is its impact on their plans to dispose of their extensive holdings of ROPA. The disposal of these dead weight assets is set to slow with the expiry on July 14, 2008 of the special tax and regulatory incentives allowed under the two-year extension of the Special Purpose Vehicle Act.

With the economy softening, Lung said the real estate market is not expected to be as robust as in recent years. This slowdown could in turn impact the rates of return the banks are expecting to achieve on joint-venture projects with property firms to redevelop their ROPA.

Curiously, Moody’s said the controversy surrounding the Legacy Group of banks also highlighted the weaknesses in financial supervision.

Lung said the collapse within the past year of the Legacy Group of rural banks highlighted the continuing dangers posed to banking stability due to gaps in the Philippine supervisory framework.

Although these banks represent a small portion of the country’s total banking industry, Moody’s said the factors leading to the failure of these banks and the constraints preventing banking supervisors from acting in a more forceful manner reinforce concerns over the efficacy of recent reforms to strengthen regulation and supervision.

However, Moody’s said a repeat of the 1997 crisis is not likely, because the financial health of large Philippine corporations is much stronger than it was going into the last crisis.

“Strong earnings, helped in part by a robust local economy, have been retained or used to pay down debt, especially foreign-currency denominated bonds,” the report said. “This situation stands in contrast to the late 1990s where several large corporations borrowed heavily before the crisis, especially in international debt markets, to fund expansion into additional capacity or into non-core enterprises.”

_______________________________

Moody's maintain ‘Negative Outlook’ for RP banks
Written by Erik de la Cruz / Reporter
Business Mirror
Thursday, 19 March 2009 22:48
http://www.businessmirror.com.ph/home/top-news/7774-negative-outlook-for-rp-banks.html

MOODY’S Investors Service on Thursday said it was maintaining a “negative” outlook for the Philippine banking system given the expectation a slowing economy will weaken banks’ profitability and asset quality.

“Moody’s industry outlook for Philippine banks is negative based on our expectation that challenges in their operating environment will depress bank earnings and pressure their asset quality,” said Richard Lung, a Moody’s vice president and senior analyst.

Lung said in a statement a slowing domestic economy will contribute to a “cyclical weakening in the country’s bank-credit fundamentals.”

Individual banks, however, are strong enough to absorb such pressures at this stage, he said.

“Our outlook for the intrinsic stand-alone financial-strength ratings of individual banks remains stable, as we believe that they can absorb these pressures without experiencing a prolonged deterioration in their relative credit metrics,” Lung said.

Moody’s has released its latest banking-system outlook for the Philippines, which was authored by Lung. His “extensive” report expressed the global debt watchdog’s expectations for credit conditions in the banking system over the next 12 to 18 months.

About three months ago, Moody’s also gave a negative outlook for the Philippine banking system in the light of the pressure on bank earnings and asset quality. Most local banks reported declines in earnings in 2008 mainly due to weak gains from trading operations amid the turmoil in financial markets.

The Bangko Sentral ng Pilipinas (BSP), however, continues to paint a positive outlook for the domestic banking system.

BSP Governor Amando Tetangco Jr., in a speech last week at the annual convention of the Chamber of Thrift Banks, said the Philippine banking system “continues to be fundamentally sound and stable, and operates in a macroeconomic environment that has stood resilient.”

The banking industry’s balance sheet grew in 2008, he said, despite stressed global conditions, while both nonperforming loan (NPL) and nonperforming asset ratios remained relatively stable.

“While profitability has and could be under further pressure, the capital of the banking system, as a whole, is considerably well above international norms and our own prudential standards,” Tetangco said.

The latest available data from the BSP showed banks’ NPL ratio of universal and commercial banks improving to 3.52 percent as of end-December, the lowest recorded figure since the ratio peaked at 18.81 percent in October 2001, from 3.75 percent a month earlier.

The big banks’ NPLs dropped to P88.19 billion from P92.68 billion in November while their total loan portfolio expanded to P2.502 trillion from P2.469 trillion.

3cr

March 20th, 2009, 09:23 AM

Fitch sees higher refinancing risks in Asia-Pacific region
Business Mirror: Banking & Finance
Written by Erik de la Cruz / Reporter
Wednesday, 18 March 2009
http://www.businessmirror.com.ph/home/banking-a-finance/7638-fitch-sees-higher-refinancing-risks-.html

FITCH Ratings on Wednesday said uncertainties continue to grow regarding banks’ willingness and capacity to provide or renew credit lines, and this may lead to higher refinancing risks for rated companies in the Asia-Pacific region, where about half of the $730 billion in outstanding debt is scheduled for repayment or refinancing by 2010.

The global debt watchdog has released a new study that updates the debt maturity profiles for around 145 rated Asia-Pacific companies, including the Philippine Long Distance Telephone Co. and Globe Telecom Inc.

The study also covered companies in Australia, Japan, China, Hong Kong, India, South Korea, Singapore, Taiwan, Thailand, Indonesia and Sri Lanka.

Fitch said the health and lending appetite of the domestic banking sectors in the region remain key for those companies requiring external liquidity support.

Of the rated portfolio’s $730-billion outstanding debt, 45 percent is sourced from banks and the remainder from bonds and commercial papers. About 54 percent of the total debt is scheduled for repayment or refinancing by the end of 2010, according to Fitch.

Fitch expects the region’s capital markets, where bond markets are generally less developed, to remain fragile. Given this condition, it said companies will likely continue to rely upon the strength of each country’s banking system and good banking relationship to meet financing requirements.

“The region is more reliant than Western markets on bank lending. As a result, the existing cash resources of certain companies could be rapidly depleted should the region’s banks curtail lending, thereby substantially increasing the level of refinance risk,” Fitch said in a statement.

Fitch said the study showed that around 60 percent of the rated companies has been assessed to have “good” liquidity profile, based on their 2009 and 2010 debt maturities relative to internal liquidity and committed bank lines.

“Fitch believes that its Asia-Pacific corporate portfolio exhibits a manageable debt maturity and refinance-risk profile in the immediate term.”

The concern is, however, if banks continue curtailing lending next year, which will make it necessary for companies to optimize internal cash generation and, where possible, access the bond markets, it said.

Fitch noted that at this stage in the current economic downturn, European companies are addressing this challenge by accessing the bond market on an opportunistic basis even where pricing seems comparatively onerous. “In Asia-Pacific, where the reality of current adverse economic conditions has become clear, corporate access to the international bond markets remains severely constrained.”

Fitch considers Australia and Hong Kong as having the lowest vulnerability to systemic refinancing risks, while China, South Korea and Japan “appear to have higher vulnerability to such risks.”

In the lower-ranked countries, Fitch said the practice has been for banks to renew existing uncommitted short -debt facilities on an annual basis. “Although those banking systems do not appear to be under significant stress at present, there remains the possibility that current lending practices could change in an environment of more constrained credit availability.”

“In such a scenario, Fitch anticipates that banks in those countries would ration their available credit by continuing to provide facilities to larger, higher-rated companies and selectively reducing their exposures to smaller, weaker corporates or those in distress.”

__________________________________________

‘Wall Street’ and the financial crisis
Business Mirror: Banking & Finance
Written by Free Enterprise / Val Araneta
Tuesday, 17 March 2009 20:52
http://www.businessmirror.com.ph/home/banking-a-finance/7590-wall-street-and-the-financial-crisis.html

WALL Street is the street in New York City where the New York Stock Exchange is located and the biggest US investment banks are headquartered on this street or the surrounding areas. “Wall Street” is portrayed as the center of investment banking activities for the United States and the whole world. It is noted for innovating financial products such as the mortgage-backed securities and selling these to the investing public. One Wall Street product that recently attained notoriety is the securitized subprime-housing loan that started a credit crisis affecting the whole world. This crisis caused the downfall of Bear Stearns, one of the top Wall Street investment banks. Fortunately, Bear Stearns was acquired by JPMorgan Chase with support from the US government and a “systemic problem” for the US financial system was prevented from occurring.

The systemic breakdown was not prevented when Lehman Brothers, a Wall Street firm even bigger than Bear Stearns, filed for bankruptcy in mid-September 2008. The credit crisis became a financial crisis that affected the whole world. There was a massive loss of confidence among investors and financial institutions and we are now seeing the worst global economic downturn since the Great Depression.

In order to begin to understand what happened, it would be quite useful to look back into the past. A “view of the forest” from the historical perspective could help policymakers formulate better policies in the future.

The Glass Steagall Act of 1933

The 1933 Glass Steagall Act of the US Congress was a reaction to the widespread bank failures that accompanied the Great Depression. It was observed that banks invested their deposits in the stock market, underwrote new issues for distribution to the public and lent to the companies that issued stocks that the banks underwrote. It is, therefore, easy to imagine how banks have failed when the prices of stocks dropped massively during the Great Depression.

The Glass Steagall Act separated commercial banking from investment banking. Commercial banks could take deposits but could not do underwriting except for US government securities. Under the Act, no more than 10 percent of a commercial bank’s income could come from securities. Investment banks could do securities underwriting and broking but could not take deposits. The Act also created the deposit insurance system to protect the deposits of the public.

The rationale for the Act is quite clear from the historical perspective. It was to prevent banks that were taking deposits from the public from putting these deposits at risk by taking big positions in the stocks of companies. At the same time, it prevented conflicts of interest in banks that were underwriting stocks of companies for public distribution and lending to those companies at the same time. It is like a bank selling a company’s stocks to the public so that it could be repaid.

The erosion of the Glass Steagall Act up to 1999

The lobby to tear down the firewall between commercial banking and investment banking established by the Glass Steagall Act was persistent since the 1960s. The interest was mainly from the commercial banks and sometimes their shareholders. This could have been an indication that investment banking was a more lucrative area.

The erosion of the firewall between investment and commercial banks gained pace from the end of 1986 and throughout 1987. Commercial banks were allowed to underwrite certain fixed-income instruments such as commercial papers, municipal bonds and mortgage-backed securities. The controlling parameter was a cap on the percentage of total gross revenues of a commercial bank that would originate from investment-banking activities. Initially, it was 5 percent, then rising to 10 percent.

It is interesting to note that when Paul Volcker was the chairman of the US Federal Reserve or central bank, he was opposed to commercial banks engaging in investment banking. However, he was outvoted.

The erosion of the firewall accelerated under the watch of Alan Greenspan, Volcker’s successor. In 1996 the firewall became virtually ineffective when bank holding companies were allowed to have affiliates relying on investment banking for up to 25 percent of their revenues.

The Gramm-Leach-Bliley Financial Services Modernization Act of November 1999 effectively repealed the Glass Steagall Act. This law allowed mergers between commercial banks, investment banks and insurance companies on a permanent basis. The most avid lobbyist for this law was reportedly Citigroup. Citigroup is a merger of the insurance company Travellers Group and Citibank and investment-banking subsidiaries like Salomon Brothers and Smith Barney.

Now, 2009

Ten years after the “repeal” of the Glass Steagall Act, we see Wall Street and the whole world suffering from a situation which the act was intended to prevent: a deep recession triggered by the crystallization of massive market risk on the investments of the investment banks and many commercial banks.

Market risk is emphasized and not credit risk because the trigger hit the investment books of the banks, and not the loan portfolio. The huge losses initially booked by the banks initially came from downward adjustments in the valuation of their investment assets and not from provisions in their loan portfolio.

Citigroup is the best example. After booking over $50 billion of valuation losses on its investment portfolio and a capital infusion of $25 billion from the US government, it still needed over $300 billion dollars of its portfolio to be guaranteed by the US government.

Yes, the subprime-mortgage loans were bad credit risks but from the moment that they were booked and put into a securitized pool of investment instruments, it was already known that they were bad credit risks. That is why they were called subprime.

Therefore 2009 brings us back to Wall Street in 1933.

Bank deposits should not be put into market risk? A full cycle appears to have come around. The problems that brought about the legislation of the Glass Steagall Act in 1933 happened again in 10 years after its repeal: Ironically one provision of the Glass Steagall Act that was not repealed could have saved the US financial system: the establishment of a Deposit Insurance System.

Policy implications

This article is not meant to blame “Wall Street” or investment banking for the economic problems that the world is now in. We need to look for guides in developing a financial system that can sustain long- term growth and self-correct on its flaws before they form into cracks in the system. A very good starting point is going back to the fundamentals. First, credit fundamentals. Character, Capital and Collateral were totally ignored when banks bought subprimes from agents, securitized these and sold them to the public.

The fundamental business of investment banking that we know of is advising customers on how to raise capital (corporate finance; originations) and helping customers raise that capital (syndications and Underwriting). Investment banks are not supposed to depend on carry and interest income, especially from investments in high-yield investment instruments and assets pools whose values are subject to market volatility, especially when they rely on borrowed funds for funding.

The fundamentals of liquidity and risk management also seem to have been discarded in the drive for more profits. One thing that has gone wrong was the massive mismatch of between assets and funding source “when the music stopped.” Therefore, when an investment bank like Bear Stearns could not raise financing to fund its assets any longer, it had to be bailed out. The world was not as fortunate when this happened to Lehman.

The fundamental distinctions and functions between investment banks appear to have blurred when the Glass Steagall Act was replaced by the Financial Services Modernization Act. A bank should not take on huge investment risks just because it has a stable deposit base as funding source. Neither should a bank go into 30 times leverage with risky assets just because it can rely on a double AA+ rating on its debt issues.

When Paul Volcker was Fed chairman, one of his concerns about letting commercial banks go into investment banking was that they may sell bad loans to the public and their credit standards may go down. Since he is now an adviser to President Obama, it will be very interesting to see his inputs in the policy formulation of the new administration.

3cr

March 20th, 2009, 09:36 AM

US unveils $500-billion clean-out of toxic bank assets
Business World
http://www.bworldonline.com/BW032409/content.php?id=005

WASHINGTON — US Treasury Secretary Timothy Geithner revealed a $500-billion government-backed program to relieve bank balance sheets of troubled assets that he said "are now clogging" the financial system.

The administration of President Barack Obama has developed a "Public-Private Investment Program" that will set up funds to provide a market for the troubled loans and securities issued by banks over the past several years, Mr. Geithner revealed in an op-ed piece published in The Wall Street Journal.

"The new Public-Private Investment Program will initially provide financing for $500 billion," he wrote.

This would have "the potential to expand up to $1 trillion over time, which is a substantial share of real estate-related assets originated before the recession that are now clogging our financial system," he pointed out.

The Treasury secretary explained that the measure was needed because the US financial system as a whole was "still working against recovery" and "many banks, still burdened by bad lending decisions, are holding back on providing credit."

Mr. Geithner was due to make a formal announcement of the plan and provide details at press conference later Monday.

In the op-ed piece, Mr. Geithner indicated the program would have three essential elements.

It will use funds from the Treasury, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve to mobilize capital from private investors.

Second, it will ensure that private-sector participants share the risks alongside with the government, and that the government shares in potential profits from these investments.

The funds established under the program will be open to investors of all types, including pension funds, Mr. Geithner noted.

Third, the value of the loans and securities purchased under the program will be established by the private sector in order to protect the government from overpaying for the assets, according to the secretary.

"Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," Mr. Geithner noted.

He said the ability to sell assets to these funds will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury.

This may not be an easy task. The New York Times reported Monday that there had been virtually no buyers of the troubled assets because of their uncertain risk.

That is why as part of its program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks, the newspaper said.

Despite the crisis facing the US banking system, Mr. Geithner described it as "diverse and resilient," but warned that simply hoping that banks would work these assets off over time "risks prolonging the crisis."

He further cautioned that the process of repairing the banking system "will take time, and progress will be uneven, with periods of stress and fragility."

However, the Treasury secretary expressed confidence that the economic policies adopted by the Obama administration "will work."

The comments followed an optimistic assessment of the US economy provided by President Obama in a television interview broadcast earlier Sunday.

"Well, we’re already starting to see flickers of hope out there," Mr. Obama told the CBS program "60 Minutes," noting that mortgage refinancings have significantly increased and interest rates have never been lower.

"That promises the possibility at least of the housing market bottoming out and stabilizing."

But Mr. Obama warned of a system-wide collapse with the potential to trigger an economic "depression" if a big financial institution like insurer American International Group or banking giant Citibank were to fail. But he said he was optimistic about that not happening because American society "did learn lessons from the Great Depression."

____________________________________

US Federal Reserve launches bold $1.2-trillion effort to revive economy
PhilStar
http://www.philstar.com/Article.aspx?articleId=450074&publicationSubCategoryId=66

WASHINGTON (AP) — With the US sinking deeper into recession, the Federal Reserve launched a bold $1.2-trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy.

To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

Fed chairman Ben Bernanke and his colleagues wrapped a two-day meeting by leaving a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most – if not all – of next year.

The decision to hold rates near zero was widely expected. But the Fed’s plan to buy government bonds and the sheer amount – $1.2 trillion – of the extra money to be pumped into the US economy was a surprise.

“The Fed is clearly ready, willing and able to be the ATM for the credit markets,” said Terry Connelly, dean of Golden Gate University’s Ageno School of Business in San Francisco.

Wall Street was buoyed. The Dow Jones industrial average, which had been down earlier in the day, rose 90.88, or 1.2 percent, to 7,486.58. Broader indicators also gained.

And government bond prices soared. Heralding a coming drop in mortgage rates, the yield on the benchmark 10-year Treasury note dropped to 2.50 percent from 3.01 percent – the biggest daily drop in percentage points since 1981.

The dollar, meanwhile, fell against other major currencies. In part, that signaled concern that the Fed’s intervention might spur inflation over the long run.

If the credit and financial markets can be stabilized, the recession could end this year, setting the stage for a recovery next year, Bernanke has said in recent weeks. The Fed chief and his colleagues again pledged to use all available tools to make that happen, and economists expect further steps in the months ahead.

Since the Fed last met in late January, “the economy continues to contract,” Fed policymakers observed in a statement they issued Wednesday.

“Job losses, declining equity and housing wealth and tight credit conditions have weighed on consumer sentiment and spending,” they said.

The Fed’s announcement that it will spend up to $300 billion over the next six months to buy long-term government bonds was something that in January it had hinted it would do. But some officials had seemed to back off from the idea in recent weeks.

Such action is designed to boost Treasury prices and drive down their rates, as it did Wednesday. Rates on other kinds of debt are likely to fall as well.

“This is going to help everybody,” said Sung Won Sohn, economist at the Martin Smith School of Business at California State University. “This might help the Fed put Humpty Dumpty back together again.”

The last time the Fed set out to influence long-term interest rates was during the 1960s.

The Fed’s decision to buy an additional $750 billion in mortgage-backed securities guaranteed by Fannie and Freddie comes on top of $500 billion in such securities it’s already buying. It also will double its purchases of Fannie and Freddie debt to $200 billion.

Since the initial Fannie-Freddie program was announced late last year, mortgage rates have fallen. Rates on 30-year mortgages now average 5.03 percent, down from 6.13 percent a year ago, according to Freddie Mac. The Fed’s decision to expand the program could further reduce rates, analysts said.

“This is not only going to keep mortgage rates low for a long period of time,” said Greg McBride, a senior financial analyst at Bankrate.com. “The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days.”

The goal behind all the Fed’s moves is to spur lending. More lending would boost spending by consumers and businesses, which would revive the economy.

3cr

March 20th, 2009, 05:03 PM

IMF says global economy to shrink in 2009, first time in 60 years
PhilStar
http://www.philstar.com/Article.aspx?articleId=450271&publicationSubCategoryId=200

WASHINGTON - The world economy is expected to contract in 2009 for the first time in 60 years as advanced economies will shrink sharply, the International Monetary Fund said today.

Despite major stimulus packages announced by many economies, trade volumes have shrunk rapidly, while production and employment data suggest that global activity continues to contract in the first quarter of 2009, the IMF said in a new assessment of the global economy.

Global activity will contract by 0.5 to 1 percent on an annual average basis, the first such fall in 60 years, the IMF said in an analysis provided to the Group of Twenty (G20) industrialized and emerging market economies.

Advanced economies will suffer deep recessions in 2009, while the United States will contract 2.6 percent, the assessment said.

Leading economies in the Group of Seven are expected to experience the sharpest contraction for these countries as a group in the post-war period by a significant margin.

The IMF said that in the fourth quarter of 2008 global GDP contracted by 5 percent at an annualized rate. The US economy contracted 6.2 percent in the fourth quarter, while Japan's shrank 13 percent.

Global growth is still forecast to stage a modest recovery next year, conditional on comprehensive policy steps to stabilize financial conditions, sizeable fiscal support, a gradual improvement in credit conditions, a bottoming of the US housing market, and the cushioning effect from sharply lower oil and other major commodity prices, IMF said.

In the analysis, the IMF called on G20 governments to take steps to relieve their financial systems of distressed assets and free up credit.

"Turning around global growth will depend critically on more concerted policy actions to stabilize financial conditions as well as sustained strong policy support to bolster demand," the IMF said.

___________________________

IMF lowering Philippine growth outlook (http://business.inquirer.net/money/breakingnews/view/20090325-196050/IMF-lowering-Philippine-growth-outlook)
By Michelle Remo

Global recession to be deeper than expected

MANILA, Philippines — The International Monetary Fund is scaling down its growth outlook for the Philippines this year, noting that recent projections that the global economy could contract in 2009 for the first time in 60 years were underestimated.

The IMF has lowered further its global outlook and now sees the world economy contracting by 0.5 to 1 percent this year, a reversal of its previous forecast of a 0.5-percent expansion and a much earlier projection of a 2.2-percent growth.

The latest world economic outlook came after the United States and other advanced economies showed signs they would likely contract by a margin bigger than earlier expected, the IMF said.

Realizing that the impact of the economic stimulus packages prepared by the governments of the United States and advanced countries in Europe were not likely to be immediate, the IMF said their economies were now seen to contract by 3-3.5 percent this year.

The Philippines, although in a relatively better position to escape a recession, would not be spared from the ill-effects of the turmoil.

“We are currently in the process of reviewing the macroeconomic framework for the Philippines, including growth and other projections,” Dennis Botman, IMF resident representative to the Philippines, said in an email to the Philippine Daily Inquirer.

In its outlook for the Philippines announced in February, the IMF said the country would likely grow 2.25 percent this year. But the IMF said recent global developments necessitated a review of its growth outlook for the Philippines.

The United States and Europe account for 17 and 14 percent, respectively, of the Philippines’ export income. Since December last year, the country’s export earnings have fallen by at least 40 percent year-on-year because of dwindling demand from the advanced economies.

Electronics, the Philippines’ major export product, are the most affected.

Besides lower export income, a slowdown in remittances from overseas Filipino workers is another expected adverse impact of the recession in the United States and Europe.

The central bank has said it expects the remittances to stay about the same as last year’s $16.4 billion.

It also said, however, that the remittances will still be substantial enough to fuel consumption and help ensure that the economy avoids a contraction.

The administration of President Gloria Macapagal-Arroyo has unveiled its own economic stimulus package to help keep the economy afloat despite the global turmoil. Economic managers said some P160 billion from the government’s P1.42-trillion budget for 2009 earmarked for infrastructure projects and social services would help pump-prime the economy. Another P170 billion is expected to be contributed by government corporations and the private sector to support economic development efforts.

bulakeno

March 20th, 2009, 06:15 PM

Originally Posted by 3cr
Kailangan talaga sariling sikap at hindi dapat umasa sa iba o irason ang global economy sa pagsama ng ating economy. Kung walang external demand then kailangan magkaroon ng internal demand for our goods and services. Isama na rin ang increased infra & agri spending for sustainability at bawasan na ang corruption na yan para naman magsurvive ang ating bansa. Yan dapat trabahuhin ng ating gobyerno ngayong may global crisis pangeconomiya. Of course we also have to do our share. Kailangan tayo maging mas masipag at mapursige

..at di maging tamad at mayabang(living beyond our means)...

I concur!
:cheers1:

tama ka dyan boe...:cheers:

In terms of investing in Real Estate, we should really live below our means, :dunno: instead of living beyond our means. :nono:

Hmmmm, maybe this calls for a separate thread.

Lili

March 20th, 2009, 06:24 PM

There was a time na bihira sa mga Pilipino ang nangungutang para makabili o makapagpatayo ng bahay. Kung meron man sa PAG-IBIG, GSIS o SSS lang kasi auto-deduction sa sueldo kaya madali i-budget. Bihira sa bangko na mas madali ma-remata.

Dito nga rin noon sa America, gulat sila kasi "cash" noon kapag bumili ng bahay ang Pinoy. Lahat ng ipinundar nila at ibinenta sa Pinas, pambili ng bahay kapag nag-migrate sa America.

Pero ngayon, panay utang na rin.

bulakeno

March 20th, 2009, 07:02 PM

^^Thats very true, Lily!

But we are victims of circumstances beyond our control. Who would have thought that tayong mga Pilipino na matipid at masipag ay matatamaan ng subprime mess?

Ang dalawa kong kapatid na laid off! Loss of revenue daw sabe ng mga employers nila. They :bash: have to cut down daw sa expenses nila.

Right now credit cards ang pinapangbayad ng mga kapatid ko sa kanilang groceries, utilities at iba pa. :ohno:

They're now living on future earnings if and when - hopefully - they can find other jobs. Because our family are into saving and the culture of frugality, they have enough emergency fund to subsist for a few months but for how long?

3cr

March 21st, 2009, 05:10 AM

US—A Sinking Giant?
Business Mirror: Banking & Finance
Written by Wilma Inventor Miranda
Thursday, 19 March 2009
http://www.businessmirror.com.ph/home/banking-a-finance/7729-usa-sinking-giant.html

ACCORDING to some people, the reason the United States of America as a country does not appear in the prophecy in the Scriptures is because they will be forever lost in history like Babylon. These are warning signs of the times, just as the warning made by Chinese Premier Wen Jiabao on the US dollar lately, as reported in the March 17, 2009, issue of the Asian Wall Street Journal. As we all know, most of the countries in the world own at least even just a few dollars of the US Treasury Bonds, with the more developed ones owning a more significant amount.

According to such article, there might be a political motive in this statement from a prominent Chinese government official but his concern on the integrity of the US sovereign debt is nonetheless “timely and apt.”

Though the data is not official, it was estimated that roughly two-thirds of China’s $1.9-trillion foreign- exchange reserves are invested in US Treasury debt. And that could hold true for the rest of the world—although maybe not as big as that investment. The dollar is the world’s currency and that’s how strong the US is perceived to be. It borrows and pays its own debts in its own currency—a unique privilege that not any country can have.

Even if we just talk about individuals and not countries, for sure, here alone in the country there are rich Filipinos who lost their investments in the US market. That’s how confident we are of the stability of the US.

This concern of the Chinese premier was immediately addressed by the spokesman of President Obama, assuring the world that the US is still the safest haven to invest. This had better be true because it is hard to imagine the consequences if they will default on their debts. The stimulus package of President Obama will require an additional $3 trillion to $4 trillion in additional borrowings and many believe this is the worst recession in the US after World War II.

There are several predictions for 2009 and beyond—some economists say there will be a recovery by the end of 2009, some say it will take longer than that. But if we really have to take a careful look as to how the US is handling the problem right now, there might be reasons for concern for China.

For one, the stimulus package’s purpose is for tax relief and spending blowout. These are just for income maintenance and transfer payments, which, in the long run, have “little or no growth payback”—according to the same article in the Asian Wall Street Journal. Deficit spending, on the other hand, has a better payback when it is channeled to expenses to win a war, finance tax cuts and activities or investments that spur economic growth. So if the US policies are not successful enough to make the US dollar assets worth the risks, the demand for US debt will likely wane. And that would just prove that the status of the dollar as the currency of the world is not a birthright, and it can vanish just like a bubble.

I prefer to take a more optimistic outlook—I’m sure most of us prefer to do so—but we should also be vigilant for “black swan” sightings in the global economy and be more realistic in our assessments. Black-swan events are extraordinary ones and could have a significant impact in the market. They are, like what is happening today, beyond normal occurrences. Who would ever think the United States of America, the richest country in the world, would face a dismal economic scenario today?

Or, maybe, they were really destined to be? Only time will tell, but what is happening around us just goes to show that everything on earth is temporal. And no power in the world can be a superpower forever. Look at the powerful nations in ancient times—Babylon, Egypt, Rome, Greece—where are they now? They are still there except for Babylon, but they all have a struggling economy in a world where the US now dominates. The following words still holds true—“do not store up for yourselves treasures where moth and rust destroys....”

________________________________

China to continue buying US Treasury bonds
Business World
http://www.bworldonline.com/BW032409/content.php?id=027

BEIJING — China will continue to buy US Treasuries, viewing the credit risk as low overall, said a senior central bank official.

"Investing in American Treasuries, as an important part of our foreign exchange reserve management, will continue," Hu Xiaolian, a vice governor of the People’s Bank of China, told a news conference on China’s preparations for next month’s G20 summit in London.

Premier Wen Jiabao said on March 13 he was worried about China’s heavy exposure to the United States. Bankers assume about two-thirds of China’s nearly $2 trillion in reserves is parked in dollar assets, primarily US government and other bonds.

Ms. Hu, who is also head of the State Administration of Foreign Exchange, said China would pay close attention to changes in the value of its Treasury holdings.

"US Treasuries are an important part of our foreign exchange reserves. So we naturally care about the security and investment return on U.S. Treasuries," she said.

Turning to the dollar, Ms. Hu disputed the argument heard in some circles that the US economy and markets are in such deep trouble that the dollar’s global supremacy is under threat.

She said China’s view was that studies could begin of a multi-polar global currency system but that the dollar remained the key currency in terms of trade, settlement, payments and pricing. The dollar also dominated financial investment.

That was why China, though favoring research into a new multi-currency system, believes the current priority is to step up supervision of the US economy and its financial markets, Ms. Hu said.

On the currency composition of China’s reserves, she said Beijing took long-term factors into account such as the structure of China’s payments and trade; the risks and returns on various currencies; and the liquidity of different currencies.

3cr

March 21st, 2009, 05:14 AM

Maybe Obama and crew can learn a thing or two from China in dealing with these crooks responsible for this global financial mess we're in right now...

BILLIONAIRES BEHIND BARS: Shows the new face of China as financial markets unravel
Written by William Mellor
Bloomberg News
http://www.businessmirror.com.ph/home/bloomberg-specials/6585-billionaires-behind-bars-jailed-tycoons-show-the-new-face-of-china-as-financial-markets-unravel.html

If China’s richest man knew he was about to become the most prominent casualty of the country’s love-hate relationship with capitalism, he didn’t show it this past August.

Huang Guangyu, a peasant’s son who became a billionaire by building Gome Electrical Appliances Holding Ltd. from scratch, outlined plans for continued expansion of the 800-store appliance chain. He told the board members gathered in the company’s mauve-carpeted executive offices 61 floors above Hong Kong’s Victoria Harbor that Gome’s profit had tripled in the first half of 2008 from a year earlier.

The directors lunched on Cantonese dishes ordered in from Man Wah, one of the city’s ritziest restaurants. “It was a very pleasant, chatty meeting,” says Mark Greaves, 51, chief executive officer of London-based investment bank Hanson Capital, who is one of the company’s two non-Chinese directors. “Mr. Huang talked about his crusade to take Gome to all corners of China.”

Greaves hasn’t seen or spoken to Huang, 39, since. One morning in November, the dapper, baby-faced tycoon failed to turn up, along with his Maybach limousine, at Gome’s Beijing headquarters, where he normally worked such long hours that he had installed a double bed in the office adjacent to his own.

On November 24, the company halted trading in its shares on the Hong Kong exchange. Three days later, Beijing police disclosed that one of China’s most celebrated entrepreneurs was under investigation for share manipulation.

Three months later, Huang and his wife and former codirector, Lisa Du Juan, remain incommunicado, along with Zhou Yafei, Gome’s former chief financial officer, somewhere in China’s penal system, leaving Greaves and his remaining codirectors scrambling to avert the company’s collapse.

Gome’s investors—which include Capital Research & Management, a unit of Capital Group Cos., the largest US manager of stock and bond mutual funds; Warburg Pincus Llc.; and clients of JPMorgan Chase & Co. and Morgan Stanley—still can’t trade the suspended stock. All four fund managers declined to comment.

During China’s 30-year boom, foreign investors bet heavily on the so-called red capitalists: emerging billionaires who symbolized the nation’s new wealth.

As of recent, Chinese stocks listed in Hong Kong had plunged more than 60 percent from their peak in October 2007 compared with a 50-percent fall in the Standard & Poor’s 500 Index. Some of the companies that have crashed the hardest are those built by billionaire highfliers such as Huang, whose 34-percent stake in Gome is now worth less than one fourth of the $2.8 billion it was valued at on September 1.

Even in the good times, China’s new rich thrived only at the whim of an autocratic and still nominally communist regime. Now, collapsing global demand for its exports has plunged the world’s fastest-growing major economy into crisis, causing thousands of factory closings.

More than 20 million workers have lost their jobs, the government disclosed in February. A record 6 million students will leave universities this year unable to walk straight into the high-paying jobs that their predecessors took for granted. Strikes and mass protests occur daily.

And China’s embattled leaders are seeking somewhere to place the blame. “Maybe people are lashing out as a defense mechanism,” Greaves says. “There seems to be some tension between business and politicians.”

The economy won’t improve anytime soon. China’s breakneck growth plunged to 9 percent in 2008 from 13 percent in 2007. This year, bearish economists predict it will fall to a pitiful—by Chinese standards—range of zero to 5.5 percent. That’s despite the announcement in November of a $585-billion government stimulus package. “We must urgently reverse sliding growth,” Premier Wen Jiabao said last week. China is targeting 8-percent growth this year.

China’s corporate carnage has surprised investors even more than the mayhem that’s taking place elsewhere in the world, says Nick Toovey, who oversees $80 billion, including Chinese stocks, at ING Investment Management Ltd. in Singapore.

“In the West, there are still those who remember what happened in 1987 and even 1974,” Toovey says of earlier Wall Street plunges. “But this is the first generation of investors to have experienced a bear market in China in conjunction with a serious slowdown in global growth.”

Some of Huang’s fellow billionaires have also had precipitous falls. Citic Pacific Ltd., run by Larry Yung, lost as much as $2.4 billion last year by betting wrong on the Australian dollar.

The company was bailed out by the Chinese government and now faces an unspecified investigation by the Hong Kong Securities and Futures Commission, according to a statement released by the stock market regulator.

Under the 2003 Securities and Futures Ordinance, making a false and misleading statement can result in a prison sentence, according to a government Web site.

On the mainland, Zhang Wenzhong, founder of Hong Kong-listed Wumart Stores Inc., was sentenced to 18 years in prison in October for bribery, embezzlement and fraud, according to the Web site of the Chinese Supreme People’s Court.

Scandal-free entrepreneurs are suffering, too, as their fortunes evaporate along with a weakening economy.

Li Ning, the former gymnastics gold medalist who lit the Olympic flame, Spider-Man style, at the 2008 Beijing games, has watched a plunge in shares of his sporting goods retailer whittle his wealth by almost two-thirds since October 2007.

The stock price has plummeted more than 90 percent at the company owned by Zhang Yin, who became a billionaire recycling used paper into cardboard boxes to pack China’s exports.

“Like Warren Buffett says, when the tide goes out, you find out who’s swimming naked,” says David Webb, a Hong Kong-based investor, shareholder activist and publisher of Webb-site.com.

It’s been more than 30 years since Deng Xiaoping cast off communist orthodoxy and told his countrymen, “To get rich is glorious.” Since then, the country has become fascinated with the newly wealthy class created as the country’s economy boomed.

Last year, China had 415,000 millionaires, according to a Merrill Lynch & Co./Capgemini report. The country also has more than 100 billionaires, says Rupert Hoogewerf, CEO of Hurun Inc., a research firm that tracks China’s new rich.

That was all right with China’s leadership, which subscribed to a form of trickledown economics. “Deng’s view was that some people would get rich first and the momentum would pull along the rest,” says Laurence Brahm, an American author and investor who owns hotels and restaurants in China.

In the 1980s, those waiting to be swept up by that wave envied the wanyuan hu, households with savings of 10,000 yuan—about $3,500 at the time. By the end of the next decade, newspaper and magazine readers were poring over rich lists of multimillionaires.

So were the authorities, who were on the lookout for those who failed to pay taxes or obtained their wealth as a result of some blatant criminal activity.

The rich lists became wanted lists, Brahm says. Some of China’s wealthiest went to jail. They included Yang Bin, 43, a Dutch-educated orchid and tulip entrepreneur with a fortune of $940 million, who was imprisoned for 18 years in 2003 for defrauding shareholders in his Hong Kong-listed company, Euro-Asia Agricultural (Holdings) Co., by inflating profits. Others were murdered by business rivals or committed suicide to avoid public embarrassment.

While to get rich remained glorious, those who became too wealthy were sometimes made into scapegoats, especially in a country where some 200 million people still subsist on just $1.25 a day. “There’s a Chinese saying that you kill the chicken to scare the monkey,” Brahm says.

Even businessmen the government once lauded can wind up in jail. “China’s reforms are full of contradictions and juxtapositions,” he says.

China isn’t retreating from capitalism, says Tao Dong, Hong Kong-based chief regional economist at Credit Suisse Group AG. “There’s no new policy targeting the private sector,” he says.

In fact, China will have to rely heavily on private companies to boost its economy. “The good entrepreneurs are symbols of the success of 30 years of reform,” says Christian Jiang Weisong, a Hong Kong-based analyst at Bocom International Holdings, a unit of Bank of Communications Ltd. The bank, China’s fifth-largest lender, is 20-percent owned by HSBC Holdings Plc. “It’s important for China that they don’t fail,” he says.

The role of entrepreneurs in the economy is more than symbolic. Private companies accounted for 70 percent of the country’s gross domestic product last year compared with 17 percent in 1990, according to CLSA Ltd., the Asian investment banking arm of France’s Credit Agricole SA.

Entrepreneurs have also created 50 million jobs in the past decade, according to Liu Yang, who helps manage $2 billion in Hong Kong for London-based Atlantis Investment Management. That’s more than the 46 million who were fired when China began closing its inefficient state-owned enterprises in the late 1990s.

Entrepreneurs still have to navigate a hybrid economic system. The Communist Party retains a firm grip on the world’s third-largest economy. Many companies have a party secretary serving on their board of directors, and all but one of China’s 130 banks are still government controlled.

“When times get tough, those state-owned banks lend to the state-owned enterprises and not to the entrepreneurs,” says Chris Ruffle, who helps manage $14 billion at Edinburgh-based Martin Currie Investments Ltd.’s China unit in Shanghai.

The red capitalists are also vulnerable when their political connections—known as guanxi—change because leaders retire, are transferred to other jobs or are purged.

“Entrepreneurs have to constantly watch the political winds and waves,” says Albert Louie, founder of Beijing-based risk consulting firm A. Louie Associates Corp.

The departure in 2007 of high-profile Commerce Minister Bo Xilai, who moved out of Beijing to become party chief of Chongqing municipality in Southwest China, may have contributed to the downfall of Gome’s Huang, Louie says.

“Huang was an obvious target and a victim of political wrangling,” he says. “Without the support of people in the Commerce Ministry, he couldn’t have gotten so far so fast.”

Even the government acknowledges the importance of guanxi. “Most entrepreneurs fail because of the country’s political/business relationships,” said a January editorial in Xiaokang/Caizhi magazine, which is owned by the Central Committee of the Communist Party. “While this enmeshment between politics and business in China has allowed a whole group of entrepreneurs to rise, it has also hindered their progress and may lead to potentially explosive consequences.”

Few have used guanxi better than suave, silver-haired Yung, chairman of Citic Pacific. Yung, 66, is the son of a former vice president of China and grandson of Rong Desheng, who made his fortune in freewheeling prewar Shanghai.

When most tycoons, including members of the Rong clan, fled abroad before Mao Zedong’s 1949 communist revolution, Yung’s father, Rong Yiren, stayed and handed the family’s mainland businesses over to the state.

After China embraced free markets, Rong Yiren was rewarded in 1979 with the task of setting up China’s first state-owned investment corporation, today known as Citic Group.

Rong was appointed vice president of China in 1993. When Citic set up a publicly traded unit in Hong Kong in 1990, Rong’s son, Yung (Yung is the Cantonese pronunciation of the Mandarin Rong) was named chairman.

Yung lived the capitalist lifestyle: He raced horses and became a steward of the Hong Kong Jockey Club. He bought a UK estate, once the home of former British Prime Minister Harold Macmillan, where he built a private golf course and hunted.

“Yung demonstrated a lifestyle that’s compatible with Hong Kong and was a tremendous force for confidence,” Brahm says.

Not anymore. In October, Yung disclosed to investors in a statement that Citic Pacific could lose up to $2.4 billion—the equivalent of its combined 2006 and 2007 profit—from betting that the Australian dollar, one of the world’s more volatile currencies, would rise against the US dollar.

In July, when the Australian dollar was trading near a 25-year high against the US currency, Citic Pacific bet it would continue to rise.

Using derivatives contracts known as accumulators, the company wanted to minimize its currency exposure resulting from a A$1.6-billion (US$1.07 billion) investment in an iron ore mine in Australia. Three months later, the Aussie had lost almost 40 percent of its value against the greenback, and Citic Pacific’s losses from the accumulators—so notorious in Hong Kong that investors refer to them as “I kill you laters”—had soared.

The currency loss would be the biggest ever by a Chinese company, about four times the $550-million loss China Aviation Oil (Singapore) Corp. incurred on jet fuel trades in 2004. Yung fired financial director Leslie Chang, 54, and financial controller Chau Chi Yin, 52, because they made the contracts without proper authorization, Yung said in a statement in October.

Yung’s daughter, Frances, 36, who was described in Citic Pacific’s 2007 annual report as director, group finance, escaped the ax because, according to the company, she was less culpable and reported to Chang. Frances Yung was demoted and will take a pay cut, the company said.

Citic Pacific’s shares plunged to HK$8.68 on Monday, down 79 percent from a year earlier.

Yung’s connections helped save Citic Pacific, which makes steel and develops property. He flew to Beijing to persuade the company’s state-owned parent to cover the losses in exchange for convertible bonds. Ratings agencies in February upgraded Citic Pacific debt because they said the deal showed the strength of support the company has from Citic Group, which now owns 57.6 percent of its Hong Kong unit.

Yung, who owned 19 percent of the company, lost more than a third of his stake when Citic Group converted the bonds to stock. Other investors include Montreal-based Power Corp., which owns 4.35 percent of Citic Pacific, according to Bloomberg data. Andre Desmarais, a member of the billionaire family that controls Power Corp. and a Citic Pacific director, declined to comment on the losses. Yung and other directors also declined to comment.

Albert Ho, chairman of Hong Kong’s opposition Democratic Party, says he wants to know why Yung and his fellow directors waited six weeks before disclosing the losses.

Citic said in October that the company learned of the losses on September 7—five days before it issued a circular announcing a connected transaction that said “directors are not aware of any material adverse change in the financial or trading position of the group since December 31, 2007.”

Hong Kong’s Securities and Futures Commission said on October 22 that it’s investigating the company. Citic Pacific directors including managing director Henry Fan, Yung and his son Carl, 39, the company’s deputy managing director, are being investigated as part of that probe, the company said in January.

The Securities and Futures Ordinance allows civil or criminal action against anyone for market misconduct. The maximum penalty is 10 years in prison and a fine of HK$10 million (US$1.29 million).

Fan, 60, and other directors declined to be interviewed pending the result of the inquiry, Fan said in an e-mail to Bloomberg News. SFC spokesman Ernest Kong declined to comment.

Though she has political connections, Zhang Yin, who founded Nine Dragons Paper Holdings Ltd., has no state-owned parent to bail her out.

The daughter of an army lieutenant who quit the military to become general manager of a metallurgical company in Guangdong province, Zhang, 51, started a scrap paper business in the 1970s with $3,800 in capital.

In 1990, she moved to Los Angeles, where she ran a paper collection company out of her apartment. After moving back to China, Zhang and her husband, Liu Ming Chung, set up Nine Dragons. Business boomed as China’s exports soared, increasing demand for cardboard boxes to pack toys, shoes and computers that the country was selling abroad.

Zhang and her husband made $400 million selling a 30-percent stake in Nine Dragons on the Hong Kong stock exchange in 2006. By September of that year, Zhang’s shares were valued at $10 billion, making her China’s richest person, according to Hurun.

Zhang’s success also earned her a seat on the Chinese People’s Political Consultative Conference, an advisory body to the Chinese government. There, Zhang was criticized by fellow conference members for proposing tax cuts for the rich and amendments to a new labor contract law that increases benefits for workers, the official news agency, Xinhua, reported in March 2008. Zhang sought an exemption for labor-intensive industries such as her own. “By opposing China’s new labor laws so conspicuously, she has made enemies, and that has hurt her business,” Louie says.

China’s slowing export growth didn’t help either. Zhang’s customers began using fewer of her company’s boxes. Thousands of factories closed last year, including 4,000 toymakers.

In December, Nine Dragons issued a statement denying Chinese media reports that it was facing bankruptcy. “Our position remains healthy,” Zhang said at the time. On February 9, Nine Dragons said it plans to buy back $284 million worth of five-year notes at a discount of at least 47 percent to face value. Investors who accept the offer for the notes, which were issued less than 10 months ago, will get back only 53 cents on the dollar plus interest.

On February 18, the company said profit fell 69 percent in the six months ended December 31 from a year earlier. In a statement, Zhang said the global financial crisis and fluctuating raw material prices had resulted in “unprecedented challenges and difficulties.” On Monday, the share price had fallen 91 percent from its peak in September 2007 to HK$2.38. That leaves Zhang, once worth $10 billion, with a fortune of less than $1 billion.

Real-estate developer Yang Huiyan, 28, also found her paper billions evaporating as the market shifted. In April 2007, investors bought shares valued at $1.9 billion in Yang’s Country Garden Holdings Co., a property developer based in Guangdong province, where home sales had grown at the rate of 22 percent annually for a decade. Within five months, Yang’s 60-percent stake in Country Garden was valued at $16.2 billion. Then, China’s property bubble burst. By February 23, Country Garden stock had plunged 88 percent to HK$1.60.

Some entrepreneurs stand to lose more than just a paper fortune. On the windswept grasslands of Inner Mongolia, far from the boom-and-bust property markets of China’s great cities, Niu Gensheng made his fortune betting that China’s population would acquire the Western taste for milk and dairy products.

In September, Niu, 50, lost a chunk of his wealth when the Chinese government disclosed that 22 dairy companies, including Niu’s, had been selling products containing melamine, an industrial chemical that can boost the protein levels of watered-down milk.

At least six babies died and 294,000 suffered kidney ailments and urinary problems after drinking infant formula tainted with melamine, the Ministry of Health said in a series of statements from October through January.

In 1999, Niu founded China Mengniu Dairy Co., now the biggest player in the country’s dairy industry, which had $20 billion of sales in 2007. In June 2004, he sold $200 million of stock on the Hong Kong exchange. As the price surged sixfold by the end of 2007, Niu became a billionaire.

He sponsored China’s first astronaut and the Chinese version of the American Idol TV show, as well as giving away $92 million to charities, making him China’s fourth-biggest philanthropist, according to Hurun.

He was not so successful in ensuring that all of the milk he bought from independent suppliers was of high quality. On September 23, China’s General Administration of Quality Supervision, Inspection and Quarantine said that melamine had been found in infant formula made by Mengniu and 21 other companies.

That day, shares in Niu’s company plunged 60 percent. On Monday, the shares were trading at HK$9.88, down 72 percent from their September 2007 peak. In December, the company said it expected to post a $121 million loss for 2008 compared with a $136 million profit a year earlier. Niu cut his 990,000-yuan ($145,000) salary in half to atone for the error.

On January 16, lawyers for 213 families filed lawsuits against Mengniu and the other companies. Six days later, China sentenced two men to death for their involvement and gave a life sentence to another company chief. Chinese media have not reported any charges against Niu or other Mengniu executives. Niu declined to be interviewed for this article.

At least Niu still has his freedom—unlike Huang, the imprisoned founder of appliance retailer Gome. In January, Huang resigned from Gome’s board, according to Greaves and Gome spokesman Tim Payne. Huang’s wife, Du, 38, who’s under house arrest, resigned in December.

Huang and Du, a former employee of Bank of China Ltd., built Gome into a national chain selling everything from flat-screen televisions to rice cookers.

To bring international experience to the board, Huang recruited Chang Sun, who runs the China business of New York-based Warburg Pincus, which owns about 1 percent of Gome stock; American Tom Manning, a former Bain & Co. managing director; and Greaves of Hanson Capital.

As they prospered, Huang and Du embraced some of the trappings of wealth. Though his teeth were nicotine stained from chain-smoking, Huang dressed in well-tailored striped shirts and suits and owned a BMW 6 Series car, while Du wore Dior. With their three children, they moved into a 300-square-meter condominium in a development owned by Huang’s real estate company.

After Huang disappeared, Xinhua reported that he was suspected of having manipulated trading in shares of two other companies, Beijing Centergate Technologies (Holding) Co. and Sanlian Commercial Co.

Xinhua also reported in January that two investigators from China’s public security ministry had been detained for allegedly taking bribes during the investigation into Huang.

Other than that, Chinese authorities have released no details of the allegations against him.

Alarmed that Gome could collapse without its founders, the remaining directors set up an action committee headed by Sun. They also called in a forensic auditing team from Ernst & Young Llp. to investigate any irregular transactions.

Greaves says nothing has been found so far. “When people do get taken in for questioning, they sometimes disappear for months or even years,” Greaves says. “That creates uncertainty, which is the worst thing for institutional shareholders, especially when the rest of their world is crumbling around them.”

The company has appointed a new chairman to replace Huang, and begun preliminary talks about selling a stake in the company to private equity funds, according to Greaves and a Hong Kong-based company spokesman, Tim Payne. As much as 20 percent of the company is up for grabs, people familiar with the plan told Bloomberg News.

Greaves says he believes Gome can be saved, and outsiders agree. “The word we are hearing from Beijing is that even if they take out the individual, the company will be allowed to survive,” says Steve Vickers, CEO of International Risk Ltd., a Hong Kong-based unit of FTI Consulting Inc. of West Palm Beach, Florida.

The outlook for Huang himself is bleaker. “The chances of Huang Guangyu coming out of captivity are pretty small,” Xiaokang/Caizhi, the party central committee magazine, wrote in its January issue. As the new rich become the newly poor in China’s seesawing economy, the one thing that seems constant is the power of the state.

3cr

March 22nd, 2009, 04:03 PM

In a blink, ‘trillion’ is no longer unattainable
Written by Neely Tucker / The Washington Post
Sunday, 22 March 2009
http://www.businessmirror.com.ph/home/science/7818-in-a-blink-trillion-is-no-longer-unattainable.html

WASHINGTON—When did it get to be the Age of the Trillion?

Late autumn? Just before Christmas? The leaves were gone, and it just slipped into the language: a trillion dollars.

People started talking about it as if they knew what it meant. It was like a terabyte on your hard drive: something everybody seemed to know about, but nobody understood.

“Trillion” used to be a whoop-de-do word from science class. Like the amount of time it took for light from Supernova G-338 to reach Earth or something. It wasn’t tangible. In 1987 the entire federal budget passed that amount for the first time, but everybody knew it wasn’t an actual deposit of money.

Today it’s the amount of cash in Hank Paulson’s desk drawer.

“Governors Call for $1 Trillion Stimulus.” “Obama Warns of Prospect of Trillion-Dollar Deficits.” “The US steel industry is currently lobbying for ... $1 trillion” in public works.

These are real news reports, but nobody knows how much money it really is. A million million, yeah, but what’s that? There are millionaires and billionaires, but no trillionaires. Nobody holds anybody ransom for a trillion dollars; there are no pictures of anybody’s trillion-dollar home on the Riviera.

Ralph Semmel, head of the applied information-sciences department in the Applied Physics Laboratory at Johns Hopkins University, says that if you started earning $27 million every day, from the day you were born, you’d have $1 trillion in your bank account around your 100th birthday. His colleague Andy Cheng, head scientist in the space department, adds that it’s only about 3 billion miles to Pluto.

It’s insane, this amount of money. It’s come to feel like that moment in the Austin Powers movies, in which time-traveling Dr. Evil wonders how much money to demand to spare Washington, D.C., and comes up with ... 100 billion dollars!

“Dr. Evil, this is 1969!” the president roars in laughter. “That amount of money doesn’t even exist! It’s like saying, ‘I want a kajillion bajillion dollars!’”

Got a kajillion dollars? Call Detroit. GM wants to talk to you.

Computers, though, there’s an industry where everyone has learned to appreciate the value of a trillion. In the mid-1980s, the first personal computers came with 5-megabyte hard drives, Semmel notes, a byte being the amount of space roughly needed to store one character. You can get a terabyte hard drive these days for about $120. That’s about 200,000 old computers’ worth of information. It’s junk electronics.

Semmel calls these numbers “flabbergastingly large, yet people bandy them about in computers as if they’re nothing.”

But still, you’re saying, this Age of the Trillion doesn’t apply to money. It’s just cute math-class examples that don’t translate to actual cash.

Your honor, we call Zimbabwe to the stand.

In 1997, $1 was equal to about 10 Zimbabwean dollars. Today—well, as of late Monday—$1 equals 10,148,113.00 Zimbabwean dollars. (That is 10 million and change.) Viewed the other way, one Zimbabwe dollar is now worth 0.0000000985405 of $1. The country just printed a 50- billion note, which will, at least for a day or two, buy two loaves of bread.

Real money. Lots of zeros. Getting scary, isn’t it?

_______________________________________

Trillion dollar US deficits seen for next 10 years
Business Day
http://business.theage.com.au/business/world-business/trillion-dollar-us-deficits-seen-for-next-10-years-20090321-94ra.html

US President Barack Obama's budget will generate unsustainably large deficits averaging almost $US1 trillion ($1.5 trillion) a year over the next decade, according to the latest US congressional estimates, significantly worse than predicted by the White House just last month.

The Congressional Budget Office (CBO) figures predict Obama's budget will produce $US9.3 trillion worth of red ink over 2010-19. That's $US2.3 trillion worse than the White House predicted in its budget.

Worst of all, CBO says the deficit under Obama's policies would never go below 4% of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5% of gross domestic product, a dangerously high level.

The latest figures, even worse than expected by top Democrats, throw a major monkey wrench into efforts to enact Obama's budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his allies controlling Congress would have to consider raising taxes after the recession ends or paring back his agenda.

White House budget chief Peter Orszag said CBO's economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and he remained confident Obama's budget, if enacted, would produce smaller deficits.

Even so, Orszag acknowledged if the CBO projections prove accurate, Obama's budget would produce unsustainable deficits.

"Deficits in the, let's say, 5% of GDP range would lead to rising debt-to-GDP ratios that would ultimately not be sustainable,'' Orszag told reporters.

Deficits so big put upward pressure on interest rates as the government offers more attractive interest rates to attract borrowers.

"I think deficits of 5% (of GDP) is unsupportable,'' said economist Mark Zandi, chief economist at Moody's Economy.com. ``It will lead to higher interest rates to the point where it will force policymakers to make changes.''

Republicans immediately piled on.

"Under the president's plan, our debt will increase to shocking levels that are simply unsustainable and will devastate future economic opportunities for our children and grandchildren,'' said Senator Judd Gregg, the top Republican on the Budget Committee.

But without referencing the figures, Obama insisted on Friday his agenda is still on track.

"What we will not cut are investments that will lead to real growth and prosperity over the long term,'' Obama said. "That's why our budget makes a historic commitment to comprehensive health care reform. That's why it enhances America's competitiveness by reducing our dependence on foreign oil and building a clean energy economy.''

Many Democrats were already uncomfortable with Obama's budget, which promises to cut the deficit to $US533 billion in five years. The CBO says the red ink for that year will total $US672 billion.

The worsening economy is responsible for the even deeper fiscal mess inherited by Obama. As an illustration, CBO says the deficit for the current budget year, which began on October 1, will top $US1.8 trillion, $US93 billion more than foreseen by the White House.

The 2009 deficit, fuelled by the $US700 billion Wall Street bailout and diving tax revenues stemming from the worsening recession, is four times the previous $US459 billion record set just last year.

The CBO's estimate for 2010 is worse as well, with a deficit of almost $US1.4 trillion expected under administration policies, about $US200 billion more than predicted by Obama.

3cr

March 23rd, 2009, 05:16 AM

Good info. Reposting here...

Daming new developers in the market today even if nagslowdown na ang economy natin.
I believe this should help many people...

How to Choose: PRE-SELLING vs FORECLOSED vs SECONDARY PROPERTIES

When one wants to invest in a Philippine Property, (or any property for that matter), the careful buyer will always find three types of properties to choose from by canvassing around: Pre-selling, Foreclosed, and Secondary Properties. Given a budget to work with, whether it’s a million-peso figure and/or a monthly budget based on your income, how will you know which of the three suits you best?Aside from the location of the property itself which of course is crucial to you depending on where you live and work, allow me to give you this chart below so you will know what to expect on each of the three: (All Caps means an ADVANTAGE)

See the chart at http://www.realestatephilippinesblog.com/pre-selling-vs-foreclosed-vs-secondary-properties/ (since there is no table format here)

Hope this helps :-)

3cr

March 23rd, 2009, 05:17 AM

Good info. Reposting here.

Daming new developers in the market today even if nagslowdown na ang economy natin.
I believe this should help many people...

How to Choose: PRE-SELLING vs FORECLOSED vs SECONDARY PROPERTIES

When one wants to invest in a Philippine Property, (or any property for that matter), the careful buyer will always find three types of properties to choose from by canvassing around: Pre-selling, Foreclosed, and Secondary Properties. Given a budget to work with, whether it’s a million-peso figure and/or a monthly budget based on your income, how will you know which of the three suits you best?Aside from the location of the property itself which of course is crucial to you depending on where you live and work, allow me to give you this chart below so you will know what to expect on each of the three: (All Caps means an ADVANTAGE)

See the chart at http://www.realestatephilippinesblog.com/pre-selling-vs-foreclosed-vs-secondary-properties/ (since there is no table format here)

Hope this helps :-)

3cr

March 23rd, 2009, 06:05 AM

Property developers balance their options
Business World

The stock market has been battered by the turmoil unleashed by the near collapse of the US financial system. Like their foreign counterparts, local firms could only watch helplessly as their share prices plummeted due to the massive sell-offs initiated by panicked investors.

With people suddenly finding their inner bears, not even positive earnings reports by the more fundamentally sound companies could lure investors back in.

Risk aversion has gripped the market so much that the property sector, one of the best performing industries on the bourse in 2007, has also been hit. Share prices of real estate companies have lost 59% of their value from the close of trading last year, trailing only mining and oil stocks, which shed 60%.

It is not helping the sector’s prospects that the economy is expected to slow down even further this year as more negative news hurts investor sentiment.

Ricardo B. Tan, Jr., chief information officer of subdivision developer Vista Land & Lifescapes, Inc., noted that right now, fundamentals are not enough to keep share prices afloat.

"Investor sentiment will play a larger role than usual. Right now, even if things are going well and the outlook is promising for some companies, stock prices have continued to suffer primarily due to the negative mood among investors," he said.

In an e-mail, property analyst Ramon Jose E. Aguirre, research manager of Colliers International, said external appetite for local stocks would determine share prices.

"Share prices and the local bourse take their cue from financial markets abroad. As long as markets abroad face unprecedented volatility, there is no guarantee that share prices will go up," he said.

While most companies are sound, "that’s clearly not enough to erase bearish investor sentiment, at least for now."

Reprieve

But property firms had one less reason to worry about after the Securities and Exchange Commission heeded the request of four industry groups to postpone by three years to 2012 the enforcement of an accounting rule that bars developers from booking revenues until projects are completed.

The Subdivision and Housing Developers Association, Organization of Socialized Housing Developers of the Philippines, National Real Estate Association and the Chamber of Real Estate Association warned the corporate regulator that the rule could trigger a stock meltdown.

Investors, they said, could lose confidence in the real estate business as they worry about low income or even losses during the construction of a project.

In a telephone interview, Ayala Land, Inc. Spokesman Alfonso Javier D. Reyes noted that since the rule only changes accounting procedures, it should not affect the way the business is conducted.

"It’s an accounting change but it does not really affect the fundamental value of a company... The deferment helps to some extent," he said.

The last thing the market needs now, he added, are more uncertainties but it would largely be a communication challenge.

Mr. Reyes noted that firms would have had to explain to investors wild variations in sales from ongoing projects.

Mr. Tan agreed, but noted that the accounting rule change would have affected condominium and vertical developers more since their projects take three to five years.

"It is a positive development overall since it removes a potential source of confusion in the market," he said.

But Prince Christian R. Cruz, a senior economist of the online research house Global Property Guide noted that while the deferment might help in the short run, "it could prompt suspicion on the figures being presented by local companies to foreign investors if we use different accounting rules."

Prospects

Mr. Tan said the high-end condominium segment would most likely be affected if economic conditions continue to deteriorate.

He noted buyers who look at condominiums as an investment may postpone their purchase. "Also, much of the demand in this segment used to come from the US."

Mr. Aguirre thinks smaller developers could suffer more than seasoned ones since these are not backed by a strong brand, reputation and credit lines.

"High-end residential condominiums still looks fine as demand appears to be holding up... Big and established companies should find this year challenging, but not too much to handle," he said.

For his part, Mr. Reyes said the industry’s growth could come from the retail and mid-level market, where demand remains strong, and from outsourcing companies.

He added that Filipino workers abroad would continue to buy houses — a phenomenon that has fueled the industry’s recent boom — since remittances remain strong and bank financing is accessible.

The passage of a real estate investment trust (REIT) law would also help the industry, analysts said. Mr. Aguirre said REITs could be an alternative to stocks, and could allow investors to have a pool of assets without the tax bite.

"The pool of funds will be injected into the real estate industry. This in turn will spur economic activity and growth of the sector," he said.

"In times like these, it is important to continue looking for instruments that may work, or may give investors reasonable options for their money," he added.

Mr. Cruz said the law should address ownership and regulatory issues involving real estate investment trust funds.

"The devil is in the details... While the REIT may offset weaker demand, it must be ensured that its main beneficiaries are firms that complete their projects as scheduled," he pointed out.

Moreover, the law should prevent a situation where big developers are also the owners of big financial institutions. "So instead of a real estate investment trust company buying up a number of property from different developers, what you might get is big financial institutions buying from their sister real estate companies," he said.

_______________________________________

Remittances from OFWs may contract 13% this year–DBS Bank
Business Mirror
Written by Erik de la Cruz / Reporter
http://www.businessmirror.com.ph/home/banking-a-finance/7916-remittances-from-ofws-may-contract-13-this-yeardbs-bank.html

MONEY sent home by overseas Filipinos workers (OFWs) may contract 13 percent or even more this year, and the drop may cause consumer spending to slow and the peso to fall to as low as 51 per US dollar by the end of the year, according to DBS Bank.

“Based on DBS growth forecasts for key economies where Filipino expatriates are working, remittances are likely to drop by 7 percent to 13 percent this year,” DBS economist Lim Su Sian said in a research report.

“The drop in remittances could be worse should GDP growth in these economies turn to be worse than expected,” she said.

The US, which has been in recession since late 2007, was last year’s biggest source of remittances for the Philippines, accounting for about half of the 2008 inflow, which reached $16.4 billion.

Four of the top 10 sources of remittances last year— the US, Japan, Singapore and Hong Kong—are within the scope of DBS’s research.

DBS expects Hong Kong’s and Singapore’s gross domestic product (GDP) to shrink this year by an average of 6.5 percent, while it sees Japan’s economy contracting by 5.5 percent. It projects GDP growth of 1.5 percent for the US this year.

The four countries accounted for 57 percent of total remittance flows into the Philippines last year, Lim said.

The forecast on remittances made by DBS, Southeast Asia’s largest lender, appears too pessimistic given that the Bangko Sentral ng Pilipinas (BSP) expects no contraction in such inflows this year. The central bank sees remittances stabilizing instead given the continuing deployment of Filipino workers abroad.

Remittances for January rose by just 0.1 percent to $1.3 billion from year-ago level, the slowest rise in five years.

“Remittances by geographic origin show a second consecutive drop in flows from the Americas [the US, Canada and Guam], offsetting continued—albeit slowing—remittance growth from other key regions such as Asia and the Middle East,” Lim said.

Remittances from the Americas in January fell 11 percent from a year earlier, according to DBS.

DBS expects the Philippine economy to expand 2.5 percent this year as consumer spending slows. The government is looking at GDP growth of 3.7 percent to 4.4 percent. The drop in remittances, which account for a tenth of the economy’s output, is not expected to result in a current-account deficit for the Philippines, Lim said.

“While exports will likely contract this year [by 6 percent] due to the collapse in external demand, the drop in imports will probably be even larger, at 8 percent,” she said. “This should help prevent the trade deficit from ballooning.”

Lim said the current account should still record a surplus for most months of 2009.

“That’s the good news. The bad news is that smaller gains in the current-account surplus would still mean less support for the peso,” she said.

Continued risk aversion, concerns about the Philippines’ widening budget deficit and the decline in foreign-exchange inflows will drag down the peso to as low as 51 per dollar by the end of 2009, Lim said.

tonyboy

March 24th, 2009, 07:48 PM

I concur!

In terms of investing in Real Estate, we should really live below our means, :dunno: instead of living beyond our means. :nono:

Hmmmm, maybe this calls for a separate thread.

why don't you? the worse thing that can happen is your thread being deleted by that kind gentleman ....very nice and understanding mod kimber. :cheers:

3cr

March 25th, 2009, 06:06 AM

The new world order
How China sees the world and how the world should see China
Mar 19th 2009
From The Economist print edition
http://www.economist.com/printedition/displayStory.cfm?Story_ID=13326106

IT IS an ill wind that blows no one any good. For many in China even the buffeting by the gale that has hit the global economy has a bracing message. The rise of China over the past three decades has been astonishing. But it has lacked the one feature it needed fully to satisfy the ultranationalist fringe: an accompanying decline of the West. Now capitalism is in a funk in its heartlands. Europe and Japan, embroiled in the deepest post-war recession, are barely worth consideration as rivals. America, the superpower, has passed its peak. Although in public China’s leaders eschew triumphalism, there is a sense in Beijing that the reassertion of the Middle Kingdom’s global ascendancy is at hand.

China’s prime minister, Wen Jiabao, no longer sticks to the script that China is a humble player in world affairs that wants to focus on its own economic development. He talks of China as a “great power” and worries about America’s profligate spending endangering his $1 trillion nest egg there. Incautious remarks by the new American treasury secretary about China manipulating its currency were dismissed as ridiculous; a duly penitent Hillary Clinton was welcomed in Beijing, but as an equal. This month saw an apparent attempt to engineer a low-level naval confrontation with an American spy ship in the South China Sea. Yet at least the Americans get noticed. Europe, that speck on the horizon, is ignored: an EU summit was cancelled and France is still blacklisted because Nicolas Sarkozy dared to meet the Dalai Lama.

Already a big idea has spread far beyond China: that geopolitics is now a bipolar affair, with America and China the only two that matter. Thus in London next month the real business will not be the G20 meeting but the “G2” summit between Presidents Barack Obama and Hu Jintao. This not only worries the Europeans, who, having got rid of George Bush’s unipolar politics, have no wish to see it replaced by a Pacific duopoly, and the Japanese, who have long been paranoid about their rivals in Asia. It also seems to be having an effect in Washington, where Congress’s fascination with America’s nearest rival risks acquiring a protectionist edge.

Reds under the bed

Before panic spreads, it is worth noting that China’s new assertiveness reflects weakness as well as strength. This remains a poor country facing, in Mr Wen’s words, its most difficult year of the new century. The latest wild guess at how many jobs have already been lost—20m—hints at the scale of the problem. The World Bank has cut its forecast for China’s growth this year to 6.5%. That is robust compared with almost anywhere else, but to many Chinese, used to double-digit rates, it will feel like a recession. Already there are tens of thousands of protests each year: from those robbed of their land for development; from laid-off workers; from those suffering the side-effects of environmental despoliation. Even if China magically achieves its official 8% target, the grievances will worsen.

Far from oozing self-confidence, China is witnessing a fierce debate both about its economic system and the sort of great power it wants to be—and it is a debate the government does not like. This year the regime curtailed even the perfunctory annual meeting of its parliament, the National People’s Congress (NPC), preferring to confine discussion to back-rooms and obscure internet forums. Liberals calling for greater openness are being dealt with in the time-honoured repressive fashion. But China’s leaders also face rumblings of discontent from leftist nationalists, who see the downturn as a chance to halt market-oriented reforms at home, and for China to assert itself more stridently abroad. An angry China can veer into xenophobia, but not all the nationalist left’s causes are so dangerous: one is for the better public services and social-safety net the country sorely needs.

So China is in a more precarious situation than many Westerners think. The world is not bipolar and may never become so. The EU, for all its faults, is the world’s biggest economy. India’s population will overtake China’s. But that does not obscure the fact that China’s relative power is plainly growing—and both the West and China itself need to adjust to this.

For Mr Obama, this means pulling off a difficult balancing act. In the longer term, if he has not managed to seduce China (and for that matter India and Brazil) more firmly into the liberal multilateral system by the time he leaves office, then historians may judge him a failure. In the short term he needs to hold China to its promises and to scold it for its lapses: Mrs Clinton should have taken it to task over Tibet and human rights when she was there. The Bush administration made much of the idea of welcoming China as a “responsible stakeholder” in the international system. The G20 is a chance to give China a bigger stake in global decision-making than was available in the small clubs of the G7 and G8. But it is also a chance for China to show it can exercise its new influence responsibly.

The bill for the great Chinese takeaway

China’s record as a citizen of the world is strikingly threadbare. On a host of issues from Iran to Sudan, it has used its main geopolitical asset, its permanent seat on the United Nations Security Council, to obstruct progress, hiding behind the excuse that it does not want to intervene in other countries’ affairs. That, sadly, will take time to change. But on the more immediate issue at hand, the world economy, there is room for action.

Over the past quarter-century no country has gained more from globalisation than China. Hundreds of millions of its people have been dragged out of subsistence into the middle class. China has been a grumpy taker in this process. It helped derail the latest round of world trade talks. The G20 meeting offers it a chance to show a change of heart. In particular, it is being asked to bolster the IMF’s resources so that the fund can rescue crisis-hit countries in places like eastern Europe. Some in Beijing would prefer to ignore the IMF, since it might help ex-communist countries that have developed “an anti-China mentality”. Rising above such cavilling and paying up would be a small step in itself. But it would be a sign that the Middle Kingdom has understood what it is to be a great power.

_________________________________

China calls for new global currency
PhilStar
March 25, 2009 11:33 AM
http://www.philstar.com/Article.aspx?articleId=451860&publicationSubCategoryId=200

BEIJING (AP) – China is calling for a new global currency to replace the dominant dollar, showing a growing assertiveness on revamping the world economy ahead of next week's London summit on the financial crisis.

The surprise proposal by Beijing's central bank governor reflects unease about its vast holdings of US government bonds and adds to Chinese pressure to overhaul a global financial system dominated by the dollar and Western governments. Both the United States and the European Union brushed off the idea.

The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability."

Zhou did not mention the dollar by name. But in an unusual step, the essay was published in both Chinese and English, making clear it was meant for a foreign audience.

China has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any response to the crisis that might weaken the dollar and the value of Beijing's estimated $1 trillion in Treasuries and other US government debt.

For decades, the dollar has been the world's most widely used currency. Many governments hold a large portion of their reserves in dollars. Crude oil and many commodities are priced in dollars. Business deals around the world are done in dollars.

But the financial crisis has highlighted how America's economic problems — and by extension the dollar — can wreak havoc on nations around the world. China is in a bind. To keep the value of its currency steady — some say undervalued — the Chinese government has to recycle its huge trade surpluses, and the biggest, most liquid option for investing them is US government debt.

To better insulate countries from the ills of one country or one currency, Zhou said the IMF should create a "reserve currency" based on shares in the body held by its 185 member nations, known as special drawing rights, or SDRs.

He said it also should be used for trade, pricing commodities and accounting, not just government finance.

President Barack Obama described China's proposal as unnecessary during a prime-time news conference Tuesday.

"I don't believe that there's a need for a global currency," Obama said.

The president also pointed to the current strength of American money. "The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world."

Earlier in the day, both US Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke took similar positions at a congressional hearing. They were asked by Rep. Michele Bachmann, R-Minn., if they would "categorically renounce the United States moving away from the dollar and going to a global currency," and both said they would.

And the European Union's top economy official said the dollar's role as the international reserve currency is secure despite China's proposal.

"Everybody agrees also that the present world reserve currency, the dollar, is there and will continue to be there for a long period of time," EU Commissioner Joaquin Almunia said Tuesday after a meeting of the European Commission.

Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound. "The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," he wrote.

Beijing has been unusually bold in recent months in expressing concern about Washington's financial management and pushing for global economic changes. That reflects both its relative financial health and growing concern that increased globalization means missteps abroad could harm its own economy.

Zhou's comments are also part of China's longstanding push to reform the IMF, World Bank and global financial system to give greater voice to China and other developing economies — another theme that will be heard from China, Brazil, Russia and India at the summit of Group of 20 major economies next week.

"Overdue reforms should give proper representation to and increase the say of the emerging and developing economies," Yi Xianrong, a researcher with the Institute of Economics and Finances at the Chinese Academy of Social Sciences, a government think-tank, wrote in the government newspaper China Daily.

"Proper representation and a bigger voice for the developing countries are the need of the hour. For instance, being the world's third-largest economy and the largest foreign reserves holder, China should get its due place in the monetary body."

Another idea Yi raised was that the US and Europe should give up their traditional privileges of appointing the heads of the World Bank and the IMF.

The idea of a creating a new global reserve currency isn't new. But analysts say the proposal isn't likely to gain much traction because it faces major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the US currency.

"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.

Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.

"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.

3cr

March 25th, 2009, 03:48 PM

China and the West
China's time for muscle-flexing
From The Economist print edition
http://www.economist.com/world/asia/displaystory.cfm?story_id=13326082

As Western economies flounder, China sees a chance to assert itself - carefully...

THE room is stuffy on a sunny spring afternoon, and many of those packed into it (see above) must have regretted bringing their coats. The lucky ones have taken the few seats available. The rest are crammed shoulder-to-shoulder in this hotel-room office, listening intently to an hour-and-a-half rant on the threat of American imperialism and how the global economic crisis will result in growing confrontation between China and the West.

Sitting in front of a large portrait of a young Mao Zedong, Zhang Hongliang knows how to play to his nationalist, liberal-despising audience. His rambling discourse ranges from adulation of Mao to scorn of America (it has neither history nor culture), to warning of a “white terror” if rightists (liberals) prevail. The economic crisis is entirely the West’s fault, and as it deepens the West will turn on China. Now is the time to build an aircraft-carrier. A war with America would be “lose-lose”, but China should not be afraid of it.

China’s “leftists” are becoming more active as the global economy sputters. Mr Zhang belongs to an extreme fringe that pines for Maoist egalitarianism, state ownership and the certainty that America is an enemy. His seminar was organised by Maoflag, one of a clutch of like-minded websites in China whose nationalist, pro-communist rhetoric is suffused with a sense of their country as victim, yearning for revenge. Frequenters of these forums took heart from a flurry of spontaneous celebrations around the country in December to mark Mao’s 115th birthday. The government preferred to play it down.

Few would suggest that radical Maoists are poised to make a comeback. But their nationalism has a broad appeal. As China surveys the world, with the West in financial turmoil and its leaders seemingly desperate for cash-rich China to come to its aid, it sees strategic opportunities. Even before the financial crisis began to hit the country late last year, nationalism had been boiling up. It was evident in public responses to the turmoil in Tibet in March, the West’s support for the Dalai Lama, and China’s sporting triumph at the Olympic games in Beijing in August. Now a battered West presents a gratifying target for pent-up contempt. Even the normally cautious government is beginning to flex a little muscle on the world stage.

For most of the past two decades (flare-ups with Taiwan in 1995-96 and with America in 2001 excepted) China has played a cautious game internationally. Its approach was summed up in the pithy four-character phrases into which Chinese policymakers love to distil their thinking. The late Deng Xiaoping came up with a string of them: China should keep a low profile, not take the lead, watch developments patiently and keep its capabilities hidden. Now the global economic crisis and the West’s obvious weakness are causing officials to think again.

In public Chinese leaders still try to reassure. During a visit to Europe in late January and early February, China’s prime minister, Wen Jiabao, stressed that China’s development was no threat to anyone. It would be, he said at Cambridge University (an event better remembered for the shoe lobbed in his direction by a protesting German student), a peaceful and co-operative great power. Some sensitive Western diplomats pricked up their ears at the phrase “great power”, but it is one Mr Wen has used to describe China since well before the current crisis. In deference to foreign feelings, an English text released by the government news agency, Xinhua, used the word “country” instead.

On the issue of Tibet, however, China has been digging in its heels. Having conceded a little to Western opinion last year by holding three rounds of talks with representatives of the Dalai Lama in the wake of the unrest in March, China has lost interest. A massive security clampdown has been imposed on the Tibetan plateau to prevent any protests during this month’s 50th anniversary of the uprising that caused the Dalai Lama to flee into exile in India. Foreign journalists (despite pleas for access) have been shut out altogether.

In late February China gave a warm welcome to America’s secretary of state, Hillary Clinton. It had reason to feel proud. Here was an important American official clearly looking for China’s help. Mrs Clinton—who once boasted how strongly she had emphasised human rights during a visit to Beijing in 1995—was now suggesting that China’s bad record should not get in the way of co-operation on the financial crisis and global warming. Mr Zhang at the Maoflag seminar certainly enjoyed her new, soft tone.

Two weeks after Mrs Clinton’s departure, Chinese boats (according to the Pentagon) harassed an unarmed American ship, the Impeccable, in the South China Sea. The ship was a mere 75 miles (120km) off China’s coast and was probably on the lookout for Chinese submarines. But much as China objects, the American navy frequently deploys in international waters off China to monitor military activities. In this case Chinese responded more aggressively than usual, surrounding the American ship and trying to stop it from withdrawing. America later sent a guided-missile destroyer to protect the Impeccable.

A cautious poke

China clearly does not want to push this too far, mindful perhaps of the huge crisis in relations that occurred in 2001 when a Chinese fighter jet crashed into an American spyplane, forcing it to land at a Chinese airbase. The American crew was held for 11 days. This time China’s response was to send a fishery patrol ship (hardly a match for a destroyer) to the area. But Shi Yinhong of Renmin University says the latest incident is a sign of new robustness in China’s dealing with the West.

Though China may be unwilling to give America more than a cautious poke, it is a different story with Europe. Its abrupt decision to cancel a summit with the European Union scheduled for last December showed that, even amid the global crisis, it was prepared to deliver a powerful snub to leaders of its biggest trading partner. The reason was a meeting between France’s president, Nicolas Sarkozy, and the Dalai Lama (France then held the EU presidency). The EU and China have agreed to reschedule their summit for later this year, but Mr Sarkozy is not yet forgiven. Wen Jiabao, the prime minister, avoided France during his recent European tour. “I looked at a map of Europe on the plane. My trip goes around France,” he said.

Deng’s advice on avoiding taking the lead has by no means been jettisoned. China has reacted coolly to suggestions that a solution to the world’s economic problems lies essentially in the hands of two powers, China and America—what some call the G2. Fred Bergsten, of the Peterson Institute for International Economics, raised the idea in an article in Foreign Affairs last July. China, he argued, was continuing to act “like a small country with little impact on the global system at large and therefore little responsibility for it”. Even well before the current crisis, China had been posing an increasing challenge to international rules and institutions, Mr Bergsten said: blocking progress in the Doha round of global trade talks, aiding foreign countries without regard to human rights or the environment and resisting adoption of a flexible exchange-rate policy. Better, he suggested, that China and America work together as a G2 “to provide joint leadership of the global economic system”.

The head of the World Bank, Robert Zoellick, and its chief economist, Justin Yifu Lin, warmed to the G2 idea in an article in the Washington Post on March 6th. Though they did not repeat Mr Bergsten’s criticism of Chinese “recalcitrance”, they said that “without a strong G2, the G20 will disappoint”. But some Chinese officials see a trap. Liaowang, a magazine published by Xinhua, said Chinese scholars believed the idea “would do harm rather than good”. America would never cede control of the world order, and in any case China would never seek to exert hegemony.

China certainly delights in the notion that its global power is growing. As one Western diplomat put it, the meeting between President Barack Obama and his Chinese counterpart, Hu Jintao, in the margins of the G20 summit in London on April 2nd will be far more important than the G20 meeting itself. China stole the limelight at the last G20 summit by announcing a 4 trillion yuan ($565 billion) stimulus package just before it. Rumours continue to circulate that it has another up its sleeve. That would please everyone.

But China is not (yet, anyway) seeking to knock America off its perch. It is pushing for a greater say for itself and other developing countries in the IMF, over which the Americans, in effect, wield a veto. But it is not demanding a veto of its own. At a press conference on March 13th Mr Wen avoided saying whether China would give more funding to the IMF to strengthen its ability to deal with the financial crisis. How much China gives, diplomats believe, will depend on how much of a say it gets. An article in the official China Daily newspaper on March 17th quoted an influential Chinese economist, Yu Yongding, as saying China should not give much to the IMF—not least because certain countries on the IMF’s rescue list, particularly some from Europe, had an “anti-China mentality”.

Buying into America

Some Chinese scholars and commentators have been circulating more radical visions of how China should use the current crisis to boost its strategic influence. A recent article in Economic Reference, a journal published by a government think-tank, said the crisis would severely weaken the economic, political, military and diplomatic power of developed countries. This would create an “historic opportunity” for China to strengthen its position. China should export capital to South-East Asian countries to strengthen their economies. By so doing, it would help prevent political turmoil and win strategic influence in the region.

In America, the article suggested, China should buy up businesses in order to acquire sophisticated know-how. If the American government balks at this, “the Chinese government absolutely can use its American dollar savings as a bargaining chip to force the American government to agree to China’s acquisitions.” Diplomats say threats have even been heard from lower-ranking Chinese officials that China might sell off American Treasury bills if Washington angers China on Tibet; a meeting between Mr Obama and the Dalai Lama, for example, could be a tripwire. Few believe that China would actually risk such a self-damaging tactic, but the airing of views like this suggests that some officials are acquiring more swagger. China’s decision on March 18th to use anti-monopoly legislation to block Coca-Cola’s $2.4 billion bid for Huiyuan, a Chinese juice manufacturer, will be seen as evidence of this by some in America (see article).

This self-assurance was on show, too, during a visit to Latin America by Vice-President Xi Jinping in February. During a meeting in Mexico with overseas Chinese, Mr Xi, who is widely believed to be the heir-apparent to President Hu Jintao, accused “well-fed foreigners with nothing better to do” of “pointing fingers” at China. His country, Mr Xi said, was not exporting revolution or poverty or hunger or “messing around” with other countries, “so what else is there to say?” Mr Xi’s more diplomatic colleagues thought this was an outburst too far; though nationalist websites exulted, the domestic media were banned from reporting his comments.

Chinese leaders have been at particular pains to avoid giving the impression that China is wavering in its commitment to market capitalism (albeit with a heavy admixture of government control). But China’s own economy is being battered by the turmoil. Officials estimate that some 20m migrant workers have lost their jobs as labour-intensive industries, churning out cheap products for export, put up their shutters. White-collar workers are beginning to suffer, too. Some are being laid off and many more having their bonuses and wages cut. China’s leaders still say the country can achieve 8% growth this year, down from 9% last year; the World Bank, forecasting growth of only 6.5%, still notes that China is “a relative bright spot in an otherwise gloomy global economy”. But the boom times are definitely over.

Adam Smith’s disciples

Throughout the crisis China’s leaders have railed against the dangers of protectionism, knowing that trade with the West is vital. Much to the chagrin of China’s online leftists, Mr Wen has repeatedly sung the praises of Adam Smith in speeches and meetings with journalists. In London he revealed to the Financial Times that he was carrying Smith’s “The Theory of Moral Sentiments” in his suitcase.

As Mr Wen explains it, an important message of this book is that if the fruits of economic development are not shared by all, that is “morally unsound”, as well as a threat to social stability. This view resonates powerfully among the many Chinese who are embittered by the very uneven distribution of the fruits of China’s own rapid growth. Chinese leaders may be able to score points at home for standing up to their Western counterparts. But they know they are vulnerable to criticism that they are not doing enough to help Chinese victims of the economic slowdown. By emphasising this aspect of Smith’s philosophy, Mr Wen is trying to show he cares.

The government, however, does not want China to be roiled by the same debate that is plaguing Western governments over how to handle the crisis. This month’s annual session of the National People’s Congress, China’s parliament, was convened for only nine days instead of the usual two weeks. Although even the official media wanted more details of spending plans, the government-set agenda was strikingly sparse. The parliamentary chairman, Wu Bangguo, used the occasion to launch a lengthy tirade against Western-style democracy. “Leadership by the Party can only be strengthened and in no way weakened,” he told the delegates. For Mr Wu to get so worked up, serious voices must have been suggesting otherwise.

But few new details of the stimulus measures were revealed at the congress. The government airily said that details of a separate massive spending programme on health-care reform (850 billion yuan over three years) would be finalised only after the parliamentary session. In a cursory nod to public concern, it revealed that spending on welfare projects would be increased from 1% to 4% of the stimulus package (see chart). Spending on infrastructure would drop from 45% to 38%. But spending on environmental projects would also be cut from 9% to 5%. China’s commitment to greenness appears to be ebbing.

The left does have some cause for celebration. State-owned enterprises (SOEs) will be huge beneficiaries of the stimulus spending (Maoflag’s supporters are still in uproar about the dismantling of many of China’s SOEs a decade ago). But liberal economists in China fret that state-owned banks and their SOE cronies will carve up the spoils, leaving small and medium private enterprises by the wayside. They also worry that reforms may stall.

The China Institute for Reform and Development, a prominent liberal think-tank, has just published a 171-page report entitled “The International Financial Crisis Challenges Reforms in China”. It describes the economic crisis as the biggest problem the country has faced in the 30-year history of its reform-and-opening policy (and it has faced some big ones, not least the Tiananmen protests of 1989, the Asian financial crisis of 1997-98 and the SOE restructuring which threw millions out of work).

The report says that, without further market-oriented reforms, the stimulus package will not only fail to achieve its goal but will also store up long-term problems. In need of change, it says, are government controls on prices of water and power and government monopolies in industries such as telecoms, railways and aviation. It calls for faster financial reforms such as encouraging the development of non-state financial institutions, freeing controls on interest rates and allowing the yuan to float.

On March 13th, at the end of the parliamentary session, Mr Wen said that to counter the crisis China “would rather speed up reforms”. He said it should “give full play to market forces in allocating resources” and encourage the development of the private sector. It must also, he said, carry on with political reforms in order to “guarantee people’s freedom and rights”. But the economic crisis will not have increased officials’ appetite for change. Many will be all the more convinced that the government’s big role in the economy (not least its ownership of the banks) and the country’s one-party system (where else could a government announce such big spending plans without time-wasting debate?) are a help, not a hindrance.

It is more likely that, as the crisis deepens, the government will become increasingly cautious in its approach to domestic policy. But if protectionism grows in Western countries, Chinese nationalists will be all the more inclined to demand that their government stand up to them. A book published in China this month, “Unhappy China” (with an initial print-run of 70,000, says a publicist), aims to tap into what the authors believe is a widespread public feeling of disgruntlement with the West. One of the essays argues that the financial crisis could result in an envious West going to war with China to keep it down.

Few are quite that gloomy. One of the book’s authors (speaking in a branch of Starbucks in a luxury mall) says the government worries about books like this because they fuel suspicions in the West that China is a threat. The publishers removed one part about India’s annexation of Sikkim in 1975 because they thought it might upset India. China would like to be number one, but it would still rather get there without making big enemies.

3cr

March 25th, 2009, 04:43 PM

De-linking from US, tighter controls urged
Business Mirror
Written by Estrella Torres / Reporter
Wednesday, 25 March 2009
http://www.businessmirror.com.ph/home/top-news/8042-de-linking-from-us-tighter-controls-urged.html

ANOTHER voice was added to those suggesting the Philippines should cut the financial umbilical cord that attaches it to the developed world, especially its main trading partner the United States, where the global recession began with the meltdown of its financial structures.

Speaking on financial-economic concerns at the forum Future of the Philippines-US Relations held on Wednesday at the Asian Institute of Management (AIM) in Makati City, Dr. Gonzalo Jurado, economics professor at Kalayaan Colleges, said the financial crisis now ravaging the global economy should provide the Philippines with a new impetus to diversify its international economic relations.

He said the global economic recession can “isolate the Philippines from the most industrially advanced economy in the world, but it can also expose it to new dynamic influences emanating from other countries and other regions.”

He noted the vigilance of the Bangko Sentral ng Pilipinas has saved the Philippine banking sector from the harsh effects of the world recession.

“But the same thing cannot be said in respect to the publicly listed corporate, insurance, and pension sectors,” said Jurado in his speech. “To this hour, the national community does not know whether our publicly listed business entities, insurance companies, and pension funds like the GSIS and the SSS are holding toxic assets from the US-induced financial meltdown.”

It is therefore time that government step up measures on fiscal and monetary sectors, like strengthening the powers of the Securities and Exchange Commission to check on publicly-listed firms.

He said the government needs to also strengthen the Insurance Commission, allowing it”to regulate and monitor these sectors, to require the corporations or entities involved to disclose their holdings of external toxic assets, if any, and, if any, to immediately find ways to make up for these losses.”

Jurado said the government should also increase expenditures on social needs like in health and education and simple public works like roads and sidewalks building, maintenance and repair. These can be initiated “just to expand consumption indirectly via additions to the people’s spending.”

He also suggested that the government reduce or abolish taxes with direct impact on consumption, but not at this time. “This is hardly appropriate for the Philippines at this stage, since the resulting reduction of the revenue side of the budget may severely cripple the government’s very ability to carry out expansionary expenditures.”

Prof. Federico Macaranas, executive director of the AIM Policy Center, said the US should stay engaged in Asia to maintain its balance of power amid China’s growing economic, military and political strengths in the region.

The United States and China, he said, have similar security interests in the Asian region, so that it is to their interest as well that they continue to compete as top political and economic players. These issues include counterterrorism measures in Southeast Asia as well as South Asia in Pakistan, and the denuclearization of the Korean Peninsula.

“But the US must accommodate China’s rise and its new age approach [to the global economy] rather than confront it,” said Macaranas, who spoke on geopolitical concerns in Philippines-US relations.

He noted the Chinese have a total of $1 trillion in investments in the US economy. “The Philippines will remain intimately tied to China and define its US relations in terms of maintaining to be a human asset to the US.”

US and China are also gearing towards strengthening their economic influence in Asia by negotiating free- trade agreements with members of the Association of Southeast Asian Nations (Asean) as well as India.

__________________________________

No recovery for the peso seen as remittances slow down
Business World
http://www.bworldonline.com/BW032709/content.php?id=023

THE DETERIORATING global economy, which brings with it a likely slowdown in money sent home by Filipino migrants and workers abroad, would continue to be an obstacle to the peso’s recovery push, Bank of America’s newly acquired Merrill Lynch said.

In a research note dated March 24, Merill Lynch said the local currency’s recent gains near the P48 per dollar figure would unlikely hold. The peso closed at P48.16 per dollar yesterday, almost unchanged from Wednesday.

"The peso managed to circumvent significant weakening during the spike in global risk aversion at the start of the year, but with the global macro conditions now worse than initially envisaged, it will get increasingly challenging for the peso to sustain its resilience at levels stronger than 48.50," Merrill Lynch said.

The peso has outperformed most emerging market currencies so far this year, shedding just 1% against the dollar, when other Asian currencies are down by an average of more than 3%, a Reuters tally show.

Remittances, the key support for the country’s balance of payments — the depletion of which could erode investor confidence in the peso — however, cast gloom on the local currency’s prospects.

The central bank expects growth in remittances to stay flat this year over last year’s $16.4 billion and latest data showed these flows, while still in the positive territory, posted modest gains in January.

"The outlook for the PHP will likely worsen as foreign remittances... appear to be faltering," Merrill Lynch said.

Merrill Lynch, which was swallowed by New York-based Bank of America, has recast its forecast for currencies worldwide following a US government plan to purchase a total of $1.75 trillion worth of assets, which the bank said had adversely affected the greenback.

Still, Merrill Lynch is banking on a strong dollar as the global economic picture worsens.

"We expect recent pressure on the USD to fade as markets re-focus on downside risks to global economy activity and the spread of unconventional policies," it said.

"All the while, the USD supply into the [spot foreign exchange] market continues to dwindle as the current account contracts and home bias limits outflows of US domestic capital to a trickle."

Meanwhile, the peso was little changed yesterday amid a cautious market, traders said.

It closed at P48.16 per dollar, just a centavo up from Wednesday’s finish. It traded within a range of P48.08 to P48.23 per dollar after opening firm at P48.11 per dollar.

The local currency has benefited from increased risk appetite on hopes that a White House plan to purge toxic assets out of the US financial system could lead to an early economic recovery. Traders however said that renewed concerns over government finances have dampened investor sentiment.

The Finance department is expected to announce its fiscal performance in the first two months of the year anytime soon.

"Traders worry about the budget deficit figures. The peso is not really the favorite right now in the region," a trader said.

3cr

March 27th, 2009, 05:41 AM

Return of the Bull?
Bloomberg Specials
Written by Chua Kong Ho & Michael Patterson / Bloomberg News
http://www.businessmirror.com.ph/home/bloomberg-specials/7951-return-of-the-bull-.html

Templeton Asset Management Ltd.’s Mark Mobius said the next “bull-market” rally in developing-nation equities has begun as stocks surged from Shanghai to São Paulo on the US Treasury’s plan to revive the banking system. On Monday the MSCI Emerging Markets Index climbed the most this year, erasing losses for 2009, on US plans to buy as much as $1 trillion of toxic assets.

China’s Shanghai Composite Index rose for a sixth day, the longest winning stretch in more than 17 months, as the government encouraged mergers in the auto and steel industries. Russia’s Micex jumped to the highest since October after Citigroup Inc. said the stocks are “dirt cheap,” while banks led Brazil’s Bovespa index to a 5.1-percent gain.

“You have to be careful not to miss the opportunity,” Mobius, who helps oversee about $20 billion of emerging-market assets as executive chairman at San Mateo, California-based Templeton, said in an interview with Bloomberg Television recently. “With all the negative news, there is a tendency to hold back.”

The 72-year-sold investor, voted among the “Top Ten Money Managers of the 20th Century” by the Carson Group, said there are bargains in every emerging market after the MSCI benchmark fell 57 percent from its October 2007 peak. Equity valuations tumbled as a collapse in US consumer spending shrank demand for manufactured goods and commodities, while frozen bond markets curbed developing-nation companies’ access to credit.

Templeton is looking for companies that are “cash-rich,” have low debt and high dividend yields, or those that can invest for future growth yet have cash left to pay shareholders, Mobius said. He cited Hong Kong’s Denway Motors Ltd., PTT Plc. in Thailand, Indonesia’s Bank Central Asia, ICICI Bank Ltd. in India, Taiwan Semiconductor Manufacturing Co. and Dairy Farm International Holdings Ltd. in Singapore.

The MSCI Emerging Markets Index climbed 4.8 percent to 579.31 for the biggest advance since December 8. The rally sent the gauge up 2 percent for the year, the first 2009 gain since January 9. The benchmark for equities in 23 developing nations tumbled 54 percent in 2008 and lost as much as 16 percent this year on concern a global economic contraction would erode earnings.

The gauge has rallied 16 percent in March, headed for the biggest monthly gain since December 1993, on speculation China’s 4 trillion-yuan ($586 billion) stimulus package will boost demand for commodities and as the biggest US banks said they were profitable in January and February following $1.2 trillion in writedowns worldwide.

The Obama administration’s plan is aimed at financing as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp. debt guarantees, the Treasury said on Monday.

Fifteen of the 17 major equity benchmarks that increased this year are in emerging markets, according to data compiled by Bloomberg.

China’s Shanghai Composite Index jumped 25 percent on forecasts infrastructure spending will keep economic growth near the government’s target of 8 percent. The Micex rose 37 percent, and shares in Brazil and Chile climbed more than 7 percent as prices for oil, iron ore and copper rebounded after the worst drop in the Reuters/Jefferies CRB Index on record last year.

Shares in the US, western Europe and Japan jumped, pushing the MSCI World Index of stocks in developed countries to a 5.1-percent gain. The gauge is still down 9.8 percent in 2009.

Financial shares in emerging markets surged 5.8 percent as a group to the highest level in two months. Itau climbed the most since January 12, helping send Brazil’s Bovespa index to a 5.9 percent gain. Erste Group Bank AG rose 15 percent, leading gains in the Czech Republic’s PX Index. Bank Pekao SA added 4 percent as Poland’s WIG20 index advanced 2.9 percent.

Russia’s Micex index rallied 7.3 percent, the top gain among emerging markets worldwide, as oil climbed to the highest in almost four months and Citigroup strategist Andrew Howell raised his rating on the country’s stocks to “overweight,” meaning investors should hold more of the shares than are represented in benchmark indexes. Howell cited “dirt cheap” valuations and this year’s rally in oil for the upgrade.

Citigroup analysts Markus Rosgen and Elaine Chu are among strategists who said recent Asian stock gains are a temporary “bear-market rally” because valuations have yet to plumb the lows seen in past recessions. Tal Eloya of Fidelity Investments, the world’s biggest mutual fund company, said he’s skeptical of predictions about the timing of the market cycle.

“No one can call the bottom in the stock market,” Eloya, a portfolio manager at Fidelity, said in a briefing in Seoul.

“You are going to see a lot of bouncing off the bottom because there’s a tremendous amount of uncertainty in the market,” Mobius said. “But I have a feeling we’re at the bottom and now we’re building a base for the next bull market.”

______________________________________

US data sparks fresh hope worst is over
PhilStar
http://ca.news.yahoo.com/s/afp/090325/business/finance_economy_world

WASHINGTON (AFP) - Much better-than-expected US industrial orders data boosted markets Wednesday, offering another ray of hope that the stricken US economy could finally be steadying after months of turmoil.

Orders for durable goods in February jumped 3.4 percent, marking the first gain in six months, the best showing since December 2007 and trumping analyst forecasts for a fall of 2.4 percent.

An equally surprising 4.7 percent gain in US new home sales in January was taken as further evidence the world's largest economy may have hit bottom, sending stocks sharply higher on Wall Street and reversing losses in Europe.

Europe was hit early Wednesday by news that business confidence in Germany, the continent's largest economy, had slumped to a record low while the IMF and EU put together a 20-billion-euro rescue package for Romania.

Weak data out of Japan -- where exports in February almost halved from a year earlier -- added to the negative tone.

Japan's problems as an export-dependent economy are writ large across Asia, where many countries, including China, are struggling as their overseas markets dry up. All hopes lie in the United States, their biggest customer.

"Japanese growth was exclusively dependent on exports," said Professor Noriko Hama at Doshisha Business School in Kyoto.

"As the US is expected to be the first one out of the crisis, other economies will recover six months later, including Japan," Muramatsu said.

The week began on a strong note after Washington unveiled a widely welcomed bank bad-debt resolution package but fresh doubts over how companies will fare in the first half of this year prompted second thoughts.

Dealers said markets have been whip-lashed for months by hopes the crisis was ending only to find themselves back on the defensive when the latest unemployment or output data wrecked any optimism.

Timing the bottom of any downturn is virtually impossible but the markets always try to anticipate the turn and the US data, along with other recent figures, at least suggest the pace of decline is slowing.

On Wall Street, the Dow Jones Industrial Average was up 2.26 percent at around 1500 GMT. In Europe, London was virtually flat, off early lows, while Frankfurt gained 1.19 percent and Paris put on 1.09 percent.

Earlier in Asia, Tokyo slipped 0.10 percent and Hong Kong lost 2.07 percent but Sydney was up 0.82 percent.

Stressing the positive, US President Barack Obama told his crisis-weary nation late Tuesday that he saw signs of economic progress but pleaded for "patience" in dealing with the worst slump since at least World War II.

"We'll recover from this recession but it will take time, it will take patience," Obama said.

Senior US officials kept up the momentum Wednesday, with Treasury Secretary Timothy Geithner promising stronger rules against financial fraud and abuse.

"No crisis like this has a simple or single cause but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk," Geithner told a forum in Washington.

"In the coming weeks, we will take additional steps, among them, proposing new and stronger rules to protect American consumers and investors against financial fraud and abuse," he added.

In Bucharest, the International Monetary Fund, the World Bank, the European Union and the European Bank for Reconstruction and Development signed a 20-billion-euro (27-billion-dollar) two-year standby arrangement with Romania, whose economy has been badly hit by the global slump.

The accord, the fifth in the region after Hungary, Ukraine, Latvia and Serbia also sought help, will provide funds to get Romania through the crisis as it tries to keep its economy afloat while having to cut public spending.

"We welcome the proactive approach by the Romanian authorities ... which puts Romania on a good footing to face potential difficulties ahead," IMF Managing Director Dominique Strauss-Kahn said.

"The objective of the policy package is to cushion the effects of the sharp drop in private capital inflows while implementing policy measures to address the external and fiscal imbalances and to strengthen the financial sector."

Meanwhile in Germany, the closely watched Ifo business confidence index fell to a record low 82.1 points in March from 82.6 points in February, also coming in below analyst forecasts for 82.2 points.

Confidence "has cooled again somewhat in March ... firms have reported a further worsening in their current business situation," Ifo president Hans-Werner Sinn said in a statement.

Analysts, however noted that a sub-index looking forward six months, picked up to 81.6 points from 80.9, suggesting a pick up might be in the offing.

Go Global

March 27th, 2009, 04:43 PM

^^
Hi Boe, please unload some of your stored messages. Can't send any PMs. Thanks.

3cr

March 29th, 2009, 09:12 AM

^^ Hi Robert. Thanks for the heads up. Cleaned it na. You can PM me na.

The Dollar as a reserve currency
China suggests an end to the dollar era
Mar 26th 2009
From The Economist
http://www.economist.com/finance/displayStory.cfm?story_id=13382566&source=most_commented

In the future changes to the international financial system are likely to be helped shape by Beijing and Washington...

This is the message of an article by Zhou Xiaochuan, the governor of the People’s Bank of China. Mr Zhou calls for a radical reform of the international monetary system in which the dollar would be replaced as the main reserve currency by a global currency.

It is a delicate issue, however. When Tim Geithner, America’s treasury secretary, discussed the proposal in New York on March 25th, his remarks sent the dollar tumbling before he made clear that, naturally, he thought the greenback should remain the dominant reserve currency.

Mr Zhou’s proposal is China’s way of making clear that it is worried that the Fed’s response to the crisis—printing loads of money—will hurt the dollar and hence the value of China’s huge foreign reserves, of which around two-thirds are in dollars.

He suggests that the international financial system, which is based on a single currency (he does not actually cite the dollar), has two main flaws. First, the reserve-currency status of the dollar helped to create global imbalances. Surplus countries have little choice but to place most of their spare funds in the reserve currency since it is used to settle trade and has the most liquid bond market. But this allowed America’s borrowing binge and housing bubble to persist for longer than it otherwise would have. Second, the country that issues the reserve currency faces a trade-off between domestic and international stability. Massive money-printing by the Fed to support the economy makes sense from a national perspective, but it may harm the dollar’s value.

Mr Zhou suggests that the dollar’s reserve status should be transferred to the SDR (Special Drawing Rights), a synthetic currency created by the IMF, whose value is determined as a weighted average of the dollar, euro, yen and pound. The SDR was created in 1969, during the Bretton Woods fixed exchange-rate system, because of concerns that there was insufficient liquidity to support global economic activity. It was originally intended as a reserve currency, but is now mainly used in the accounts for the IMF’s transactions with member countries. SDRs are allocated to IMF members on the basis of their contribution to the fund.

Mr Zhou’s plan could win support from other emerging economies with large reserves. However, it is unlikely to get off the ground in the near future. It would take years for the SDR to be widely accepted as a means of exchange and a store of value. The total amount of SDRs outstanding is equivalent to only $32 billion, or less than 2% of China’s foreign-exchange reserves, compared with $11 trillion of American Treasury bonds.

There are also big political hurdles. America would resist, because losing its reserve-currency status would raise the cost of financing its budget and current-account deficits. Even Beijing might want to rethink the idea. Mr Zhou praised John Maynard Keynes’s proposal in the 1940s for an international currency, the “Bancor”, based on commodities. But as Mark Williams of Capital Economics says, central to Keynes’s idea was that a tax be imposed on countries running large current-account surpluses, to encourage them to boost domestic demand.

3cr

March 29th, 2009, 09:30 AM

The resilient dollar
From The Economist
http://www.economist.com/finance/displaystory.cfm?story_id=12341545

Why the greenback has so far withstood the panic in financial markets...

IN BRITAIN, where earnestness is a sin and drollery a virtue, dismay about the global financial crisis is best masked with humour. The British reaction to bank failures is to josh that the best place to store money is under the mattress—or in an Irish bank. When America’s first $700 billion rescue package stalled in Congress, Willem Buiter, an economics professor, prolific blogger and honorary Brit, joked that his “remaining financial wealth is now kept in a (small) old sock in an undisclosed location.”

A worried saver, such as Mr Buiter, shunning banks for the safety of hosiery, still faces a choice about what store of value to use as stocking filler. Gold is for the really scared. Its price has risen by about one-fifth in the space of three weeks. Makers of gold bars are struggling to keep up with demand. Even central banks now seem less keen to swap gold for paper currencies. European ones agreed in 1999 to limit their combined gold sales to 500 tonnes a year. In the 12 months to September, they sold just 343 tonnes, the lowest total since their pact was forged.

Gold tends to do well when the dollar struggles. And there are good reasons to be anxious about the dollar. America depends on foreign savings to finance its large current-account deficit, which was close to 5% of GDP in the second quarter. But the allure of America’s financial assets has been tarnished by the shakiness of its banking system. Bail-outs and state guarantees to shore up the system may help, but they also strain public finances and raise concerns that the government may be tempted to inflate away its debts by printing money.

Yet for all these worries, the dollar has come through the turmoil surprisingly well. It initially gave up some of the ground it made but swiftly recovered. The persistent foreign demand for American assets is remarkable given all those scares. Last year just over $2 trillion of capital—direct investments in firms or purchases of bonds, equities and other loans—came from investors outside America, mostly private ones. This was more than enough to cover the $730 billion current-account deficit and leave enough over to finance $1.3 trillion of investments by Americans overseas.

In a recent study, Kristin Forbes, of the Massachusetts Institute of Technology, set out to discover what lies behind this hearty appetite for dollar assets. She looked at several factors that might affect the cost and benefits of buying American assets, including each country’s capital controls, its financial development, its investment returns at home, and how useful dollar assets were in diversifying risk. Two striking results emerged.

First, there was little evidence that foreigners buy American as a hedge against risks at home. If a country’s investment returns moved in tandem with America’s, this did not reduce their thirst for dollar assets. This is the opposite of what financial theory predicts—that investors would be keener on foreign assets the less they were correlated with their domestic ones.

The second big result has implications for the dollar and how economists think about global “imbalances”, the recent phenomenon of big current-account deficits in rich countries financed by poor-country surpluses. Ms Forbes found that a lack of financial development at home makes foreigners keener to invest in America. What attracts them is the size, liquidity, efficiency and transparency of its financial markets compared with what is on offer in their domestic markets. This finding adds weight to theories which explain global imbalances as a consequence of slow financial progress. In this view, poor countries save hard and buy foreign securities because of a dearth of good options at home.

Once lost, never recovered?

A chunk of these savings are in the form of official currency reserves, and the dollar’s status as the global currency may have helped it recently. The greenback accounts for almost two-thirds of official foreign-exchange reserves identified by the IMF. In scary times, private investors may well see logic in buying the same currency that central banks hold for a rainy day. But does America’s economic travails bring forward the day when the dollar loses its reserve-currency status?

Barry Eichengreen of the University of California, Berkeley, takes a middle view. He argues that the dollar is both safe as a reserve currency and vulnerable to a challenge by the euro. In a recent paper written with Marc Flandreau, of the Graduate Institute in Geneva, Mr Eichengreen takes issue with the common idea that there is room for only one main reserve currency.

The authors compile new estimates for currency-reserve holdings between the two world wars that show that sterling and the dollar vied for supremacy. Indeed the dollar first surpassed the pound as the leading currency in the mid-1920s, far earlier than previously thought. But sterling regained supremacy in the 1930s. So history has mixed lessons for the dollar.

The good news is that shifts between reserve currencies take place gradually. Sterling was not, as previously thought, abruptly dethroned by the dollar; the dollar in turn is unlikely to fall from grace suddenly. But history also teaches that reserve-currency status is not a natural monopoly, protected by incumbency and inertia. The euro, says Mr Eichengreen, is a plausible alternative to the dollar.

The euro’s capital markets are of comparable depth and liquidity as the dollar’s, and the euro-area economy is roughly the same size as America’s. Faith in the efficiency of America’s financial markets must surely have been shaken by recent events. Yet the banking crisis and its economic fallout is a transatlantic affair. The banking bail-outs in Europe are a sign that the old continent is not much safer for foreign investors than America. Worried savers may still find that they still sleep a little easier with dollars under the mattress, rather than euros.

3cr

March 30th, 2009, 04:31 PM

Let's hope this is a start of a good thing... :cheers: :cheers: :cheers:

Bottom seen for world economy
Manila Times
http://www.manilatimes.net/national/2009/march/30/yehey/business/20090330bus7.html

PARIS: Trillions of dollars lost, millions of jobs gone and more bad news to come but the “Green Shoots” of recovery may just be finally showing in the wreckage of the worst global slump since the 1930s Great Depression, analysts say.

Recent data, especially in the United States, the epicenter of the storm, suggest that while things are very bad, they are not getting worse—and that has been enough for beaten down stock markets to bounce strongly.

Having plunged to 12-year lows, the Dow Jones Industrial Average closed Friday at 7776.18 points, up some 20 percent from the trough reached on March 9 when it fell to 6,546.89 points.

Markets have run ahead before on hopes that the worst is over only for sentiment to sour on the next batch of economic figures, leaving investors badly burned, and nursing fresh losses.

This time, however, some analysts say it may be different, that the economy is touching bottom and that the markets—which anticipate the economy’s direction 12 to 18 months ahead—could be right.

The slump began in mid-2007 with the collapse of the housing market in the United States, the world’s biggest economy, and for most analysts that is where the answer lies.

“I would look first of all for any signs of stabilization in the housing market; this is a crisis that was triggered . . . by a crisis in the US housing sector,” said Aurelio Maccario, chief Euro zone economist at UniCredit.

“Any signs of recovery should come from there,” Maccario said.

US house prices collapsed in the past 18 months as mounting defaults on sub-prime, higher risk mortgages pulled down the whole financial house of cards built around them, sparking the global crisis.

But US housing starts and permits staged a surprise jump in February from 50-year lows, easily beating forecasts, while President Barack Obama, noting “glimmers of hope,” has pointed to cheaper home finance as a positive.

If the US housing market is stabilizing—and analysts were reluctant to give the all clear just yet—then everything else begins to fall into place.

More confident homeowners would boost consumption, helping both US manufacturing and export-driven economies such as China, Japan and Germany that have suffered from the collapse of their main, US market, Maccario said.

“It is probably too early to say . . . the worst is behind us but maybe now we can afford to be more constructive than in the recent past, less pessimistic at least,” he added.

As demand feeds through the system, it would have a multiplier effect, and with employment increasing, the banks may feel more confident about lending again, easing the credit crunch sparked by the US home loan market debacle.

China, significantly, claimed Thursday that its own economic recovery was imminent, citing the effectiveness of its own stimulus efforts.

“Green Shoots Have Arrived,” said a Barclays Capital note this week, arguing that recent stock market gains should be sustainable because the underlying economics have improved.

“Policymakers in many countries have become more aggressive in their efforts to revive economic growth and financial markets,” it said.

“At the same time, output is now falling significantly faster than demand, producing a massive decline in inventories that sets the stage for better economic readings.

“Reflecting all of this, we are now recommending that investors become more aggressive and take risk across a broader range of assets,” it said.

But what to make of all the continuing very bad economic data? On Friday alone, headlines included the British economy shrinking in the fourth quarter at its fastest pace since 1980, European industrial orders tumbling and bailed out German lender Commerzbank posting a 6.6-billion-euros loss for 2008.

Gilles Moec, economist at Bank of America/Merrill Lynch, agreed there had been some improvement in mood but added: “What I want to see is a translation from mood to actual decision.”

The most important sign would be a recovery in industrial orders, he said, speaking of the European data Friday.

“That’s the kind of indicator that would tell us, ‘Okay, now industry is turning around, there’s more demand,” Moec said, adding that “if we were to see some improvement in orders that would be a clear sign.”

Among the data driving recent stock gains were US durable goods orders, which unexpectedly rose for the first time in February after six months of declines.

The 3.4-percent rise from January was the biggest increase since December 2007 and trumped forecasts for a 2.4-percent decline.

“This adds to a growing list of economic indicators suggesting that the rate of decline in the economy may be slowing,” Frederic Dickson, chief market strategist at DA Davidson & Co, said of the US data.

Another item on the list emerged Friday, when the US government reported that consumer spending, the driver of the US economy, rose in February for the second consecutive month.

____________________________

[U]RP’s financial markets projected to recover in the second half of 2009
Business World
http://www.bworldonline.com/BW040109/content.php?id=054

THE COUNTRY’s financial markets are likely to recover as early as in the second half of this year, but other parts of the economy will follow in one to two years, based on trends exhibited by previous global crises, University of the Philippines economist Cayetano W. Paderanga, Jr. told business leaders during the Management Association of the Philippines’ (MAP) first economic briefing for the year.

For his part, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said at the same briefing that rising consumer prices will temper the further easing of interest rates this year.

Impact spreading

The global financial crisis, said Mr. Paderanga, first hit investors in the Philippines holding on to instruments with dollar returns and then the local stock market as foreigners withdrew their portfolio investments.

"The initial impact was on the financial sector here," recalled Mr. Paderanga, who is also chairman of the Institute for Development and Econometric Analysis Inc. (IDEA), noting that the stock market had lost half of its value within less than a year.

"The other impact is now on the real economy. People have less money to spend. Before, there was lots of consumption [in developed markets] and, therefore, it was easy to export. First impact on the real side will be exportsNext will be what will happen to overseas Filipino workers’ [OFW] remittances," Mr. Paderanga said.

Mr. Tetango reiterated that the central bank expects OFW remittances to flatten this year at $16.4 billion.

As the crisis hit the financial sector first before the real sector, recovery time will similarly have a lag between the two, with the financial markets picking up first as early as the third to fourth quarter this year, Mr. Paderanga said.

"The anecdotal stories are that if you use the stock market as the indicator for the financial marketand if you measure it from the peak, what you see is a drastic reduction and then a rather long tail before it starts to pick up again," he said.

"If it is a global shock as in the 1973 Yom Kippur war and the 1982 Latin America debt crisis, then it will take 16 months. But since it is the deepest recession since 1929, you may want to add a few months," he said, adding that the stock market began to dive in July-September 2007.

As such, the recovery could happen with the second half of 2009 "if we’re lucky" or in early 2010, Mr. Paderanga said.

There will be a lag of one to two years before the recovery of real economy follows as confidence in the credit markets take time to spread and translate to increased business activity, Mr. Paderanga said.

‘A more measured’ pace

For his part, Mr. Tetangco said the rise in consumer prices, is likely to keep within the state target of 2.5%-5.5% for the year.

"So, I think there is some room for that [lowering policy rates]. But given the possible increase in oil pricesand the volatility in commodity prices [and] foreign exchange rates, we would adopt a more measured approach to monetary policy at this time," Mr. Tetangco said, echoing statements he made earlier.

The Monetary Board is scheduled to have its next rate-setting meeting this April 16.

uk kid

March 30th, 2009, 10:40 PM

Mga Bro,
Is 625k do you think a right price for a parking slot at Newport City?By location wise,investment and future use?

3cr

March 31st, 2009, 06:49 AM

Fluffy

March 31st, 2009, 12:28 PM

Thanks for that article. It's very helpful. A 20% vacancy rate seems conservative but better to be safe than sorry, I guess.

I've been playing with a spreadsheet to see if buying a condo would make sense. Could someone please look over my numbers and let me know if I'm missing anything or if something's off?

http://i35.tinypic.com/30lh06w.jpg

Note: these figures assume I buy the condo and sell it two years later.

That capital gains tax rate is for stock (5% up to P100,000, 10% over P100,000), and the capital gains tax rate for real estate is 6% according to the BIR: http://www.bir.gov.ph/taxinfo/tax_capgin.htm

Does anyone know if the capital gains tax is at the same rate for both Philippine citizens and for foreign citizens?

Muymuy

March 31st, 2009, 06:18 PM

I am sorry if this has already been asked: If I am going to rent out a condo unit, who usually pays the association dues? it is the person renting?

Retro

April 1st, 2009, 04:33 AM

Wow, yun P625K na asking price is to high for me. Is it a covered parking slot or outdoor? Remember your designated parking slot would also add as a portion of your condo dues on a per month basis. But if you plan to sell your condo unit within 5 years a parking slot could give you a better future deal.

tonyboy

April 1st, 2009, 02:36 PM

^^ P625K is about the current parking slot price being asked in the BGC and McKinley Hill area though NewPort is in Pasay na if I'm not mistaken. Don't know the going rates for parking slots in Pasay though. The purchase of a parking slot is really an individual/unit-owner based decision so in the end of the day kanya-kanyang discarte lang kung bibili sila o hindi based on their own individual requirements as well as financial capability/capacity.

boe...once upon a time..i had an offer to buy.. in 2006 ...an extra parking spot in da ritz...sising-sisi ako..:ohno:

from our new property manager..doble na raw...the frugal :ohno: me..:bash:

terman1718

April 1st, 2009, 03:13 PM

According to a recent Saturday article by Philippine Inquirer, Filipino developers are bullish on the prospects of the Philippine Economy despite the Times. According to Bansan Choa, national president of the Subdivision and Housing Developers Association (SHDA), Filipinos are not worried about the economy and continue to buy homes simply because they have to answer their basic need of providing shelter for their families.In addition, our financial position is much better now than it was in the 1997 Asian Crisis since the Pag-Ibig fund allocation has increased to p30 billion pesos and the Government-owned Home Guaranty Corporation has protected housing loans of the banks themselves. In fact, every million invested in Philippine real estate translates to p16.6 million worth of economic activity, according to SHDA Chairman Eduardo Alunan. Of course, this is very encouraging news for us Filipinos in the light of the current economic slowdown.

Another reason for their optimism is that they have cement prices locked at lower prices through deals with Cemex and Holcim. Of course, this would give Filipino Developers much more room to work with in terms of keeping costs at bay.As I have already mentioned in my previous blog posts about our resiliency…

(See the links below for more)
• http://www.realestatephilippinesblog.com/more-positive-real-estate-philippines-news/ ,
• http://www.realestatephilippinesblog.com/still-more-positive-philippine-real-estate-outlooks/
• http://www.realestatephilippinesblog.com/part-2-of-inquirer-article-on-real-estate-philippines/

… things are not as bad as they seem to be. As I said before, these developers know what they are doing, and of course they have done their homework to know that their businesses will indeed thrive and even prosper now.

Watch out for the 2nd half of the year, I believe this is where things will turn out well for Philippine Real Estate

3cr

April 1st, 2009, 03:58 PM

^^ Hi Tony. Fret not my friend, it's always 20-20 hindsight. Who could have guessed it will double di ba? Good enough that you had the foresight to secure a parking slot at the time you made your unit purchase. Like you, I think it's better to have one than not have any at all especially considering there seems to be a parking shortage everywhere you go given the driving culture we have here in Pinas. Moreover, it will not only be easier to lease out and/or sell that unit later down the line should one decide to do so but will also enable one to fetch a higher price because of it.

tonyboy

April 1st, 2009, 04:32 PM

^^thanks for the encouragement bullish terman...as for me...the long-term goal is to diversify future real estate investments.... just as my friend and idol... boe/3cr has already successfully done. :banana:

in other words...let us invest in pinas real estate properties that will bring us (audaciously hoping..of course :)) future passive income.. imho.. from prospective tenants galing sa high or upper ..medium and lower income groups....e.g. condos, townhouses and condotels.

don't you think that it is ...right now ..the more prudent thing to do?

--SuperB0y--

April 1st, 2009, 07:28 PM

does a parking lot have a seperate title or kasama sa mother title ng unit?

litz51198

April 2nd, 2009, 01:32 AM

does a parking lot have a seperate title or kasama sa mother title ng unit?

I know Newport city has separate contract for parking lot.

3cr

April 2nd, 2009, 03:59 AM

Yup as far as I know the usual industry practice/standard here in Pinas is separate yung title ng parking slot from the unit sa mga condo developments.

portludlow

April 2nd, 2009, 04:10 AM

its amazing that the Intel plant Cavite constitute 10% of our total exports last year.

Intel ‘Unthinkable’ Exit Robs Philippine Cooks’ Jobs

http://www.bloomberg.com/apps/news?pid=20601109&sid=ajkDr_jDnVEY&refer=home

By Karl Lester M. Yap

April 1 (Bloomberg) -- Rosemarie Maglalang and her husband made a living out of housing and feeding Intel Corp. factory workers in the Philippines for the past 13 years. That livelihood is about to disappear.

The world’s biggest maker of semiconductors will close its chip-assembly factory in General Trias later this year, leaving 1,800 workers jobless. The township south of Manila will lose its largest employer, which Intel says accounted for 36 percent of the province’s real domestic production in 2004.

“This is the worst thing that has happened to our municipality,” Maglalang, 42, said as she took a break from cooking chicken adobo, a Philippine delicacy. “It’s unthinkable.”

Asia’s developing economies lured multinationals such as Sony Corp. and Texas Instruments Inc. in the past four decades with cheap and abundant labor, and the factories in turn created jobs and spurred growth. Now the world’s largest companies are shutting those plants in the global recession, threatening communities that have grown dependent on them.

Tokyo-based Sony, the world’s second-largest consumer electronics maker, said in December that it would cut manufacturing sites by 10 percent from 57 by March 2010 and eliminate 16,000 jobs. U.S. hard-disk-drive maker Western Digital Corp., and Toyota Motor Corp. and Panasonic Corp. of Japan plan to fire workers and shut or sell plants in Thailand, Malaysia and the Philippines amid falling demand.

Plunging Exports

Intel’s shipments through the Philippines totaled $5.83 billion last year, more than 10 percent of the nation’s $49 billion in export revenue. The country’s dependence on foreign manufacturers is already hurting its economy: Exports slumped 41 percent in January from a year earlier, the biggest drop since at least 1981.

“These multinationals will go and stay in countries where incentives are better” as they lower costs, said Ernesto F. Herrera, secretary-general of the Trade Union Congress of the Philippines, the nation’s largest organization of labor groups. “It’s purely business.”

The global economy is likely to shrink this year for the first time since World War II, swelling the ranks of the poor by 46 million and increasing poverty in 43 developing countries, the World Bank estimates. In the Philippines, almost a quarter of the 94 million population already lives on less than $1.25 a day. The jobless rate, at 7.7 percent, is among Asia’s highest.

Cutting Jobs

Osaka-based Panasonic, the world’s biggest consumer- electronics maker, said in January it would slash 490 jobs in Malaysia and 60 in the Philippines by shutting three plants. Toyota, based in Toyota City, Japan, offered 300 temporary workers in Thailand early retirement in December. General Motors Corp., the largest U.S. automaker, has cut 790 positions in Thailand, paring its local workforce to about 2,000.

The Philippines predicts about 800,000 workers at home and abroad will be let go by companies. President Gloria Arroyo, 61, is spending more on roads and bridges this year to spur employment, giving her government the biggest budget deficit since 2004.

“The closure of this facility will reverberate economically,” said Arlita Narag, a spokeswoman for Intel’s Philippine unit. “Of course everyone is sad, but we have no choice. Every possible option had been studied.”

When Intel started building a factory to test and assemble semiconductors on a former pineapple plantation in General Trias in 1995, Maglalang was a housewife in a one-bedroom shack.

‘Silicon Valley East’

By 2008, the community was thriving after Japanese electronics maker Toshiba Corp., U.S. mobile-phone chipmaker Cypress Semiconductor Corp. and Korea’s Samsung Electronics Co. joined Intel in the Gateway Business Park, 35 kilometers (22 miles) from Manila. It was dubbed “Silicon Valley East” by then-President Fidel Ramos.

Maglalang opened a small eatery in 1995 to feed workers building Intel’s plant. Now, she and her husband also own a boarding house and a store selling shampoo and soap to the factory’s employees. They earned enough to send three children to private school and expand their house to three bedrooms and two kitchens.

“We were feeding around 150 people three times a day” at one point, said Maglalang, who earns about 10,000 pesos ($207) per month renting out five rooms in the boarding house alone. “There were a lot of business opportunities that came up and we cornered them all.”

Shuttle Rides

The number of bakeries, banks, drugstores and other businesses operating in General Trias increased threefold to 2,729 last year from 903 in 1996, the local government says.

Santa Clara, California-based Intel gave employees free meals, shuttle rides and computers, and sponsored trips to beaches, said Israel Ascano. He worked at the plant for more than a decade and earned 19,500 pesos a month.

“Those were the boom days,” said Ascano, 36, who has been unemployed since being fired in October. Intel also dismissed his brother and sister-in-law when it cut about 900 General Trias jobs last year. “It’s such a shock. We never expected Intel to shut down because they have always been generous.”

Intel has invested more than $1.5 billion in the Philippines since opening a factory in Manila in 1974 and at one time employed more than 5,000 people in the country. It also generated 36,000 jobs indirectly, according to a study commissioned by the company in 2004.

“It’s not just about the money,” said Florencia Perlado, 59, principal of Tejero Elementary School in General Trias. The teacher of 27 years cried as she said, “It’s the bonding, the relationships we have formed.”

Tejero was one of the recipients of 90 million pesos that Intel donated to 31 schools in the area in 2008, enabling it to build a speech center and science lab. Intel employees also volunteered at the school.

Maglalang, who once worked as a maid in the Middle East, is considering looking for work overseas again.

“All my kids are in private school,” she said. “Where will we get the money so they can finish?”

To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net
Last Updated: April 1, 2009 04:17 EDT

3cr

April 2nd, 2009, 04:19 AM

Hehehe... you're making me blush Tony. Ditto for me! Ikaw din naman idol ko eh! I have also learned alot from you bro. That's the nice thing about this forum/thread, we all learn from one another and each other's experiences and hopefully be better (and be better off) than we were before because of it. :) :) :)

Seems to me Ayala/ALI is playing it conservative (than bullish) in it's residential project launches. They're scaling back according to this article below...

ALI scales down new residential project launches
By Zinnia B. Dela Peña
PhilStar
April 02, 2009
http://www.philstar.com/Article.aspx?articleId=454228&publicationSubCategoryId=66

MANILA, Philippines - Adopting a defensive stance amid a global economic downturn that has affected demand for some segments of the property market, Ayala Land Inc. (ALI) is limiting new residential launches to around 2,000 this year or significantly lower than the previous year, as it aims to sell out its remaining inventory to reduce risks.

“We remain quite cautious for 2009 and our posture will be to preserve our margin gains while calibrating our planned residential launches very carefully in line with both domestic and overseas Filipinos demand,” said Jimmy Ayala, outgoing president of ALI.

“With substantial inventory across its major market segments, ALI’s priority will be to clear out our current positions to generate additional cash before it embarks on new launches,” Ayala said. The company currently has an inventory of 7,500 units.

Last year, ALI launched a total of 4,238 new residential units from four new projects and 14 new phases.

Ayala said ALI’s new game plan will prioritize investments with quick cash turnarounds that bear low risks and limit its exposure to larger scale projects until the markets recover.

“We intend to stagger new commitments for the remainder of our pipeline and limit the number of projects running at any given time to further reduce risk profile and ensure that your company will not be vulnerable in case of a protracted slowdown,” Ayala said.

Ayala Land Premier, a subsidiary of ALI catering to the high-end market, registered lower sales bookings due to the impact of the US credit crunch.

“For projects that meet our company’s tight investment criteria, we are shifting our funding mix more in favor of equity while also securing any required debt financing prior to launch to effectively limit our risk exposure,” Ayala said.

ALI, nevertheless, will continue to busy itself this year with the completion of ongoing projects. ‘We are currently in the midst of executing 129 projects simultaneously that we have committed to complete on time,” he said.

ALI has earmarked P17.4 billion in capital expenditures this year which include the redevelopment of the Ayala Center which is estimated to cost P7.2 billion and the completion of MarQuee Mall in Angeles, Pampanga.

Marquee Mall, ALI’s first provincial shopping center outside Cebu, will make available an additional 38,000 square meters of gross leasable area when it opens its doors to the public in September this year. It will allow the company to broaden its reach and allow it to tap into the increasing consumer demand and sophistication in a rapidly expanding economic growth corridor at the heart of Central Luzon.

The redevelopment of Glorietta 1 and 2 is expected to be completed by 2012.

Also part of the Ayala Center makeover is the construction of Raffles Hotel and Private Residences and Fairmont Hotel.

Meanwhile, the first phase of ALI’s Davao mall development will offer 35,000 square meters of leasable space by 2011.

Newly-appointed ALI president Antonino T. Aquino said the company’s main focus under his leadership would be to execute its plan which has already been laid out and to take advantage of other opportunities that may arise.

With a cash hoard of P16.7 billion, ALI is confident it will have the cash not only to meet its promises but also to be able to invest in attractive opportunities.

While effectively managing its risks, the company will continue to be on the lookout for unique and attractive investment opportunities, Aquino said.

“Prime assets that would normally never become available could find their way into the market and it is a fact that some of our best acquisitions have come during downturns,” Aquino said.

ALI anticipates that near-term growth in office lease rates may come under some pressure from the slowdown in economic growth and the more affordable options available in some other business districts.

From only 35,800 square meters in 2007, ALI’s available BPO office space grew to 200,800 or more than five times last year.

“While we remain positive on the long-term fundamentals and growth prospects of the Philippine BPO sector, this is an area that we are watching closely as demand growth is slowing down in the near term and there is significant supply that will come on stream from other developers in 2009. The recession in the US and has resulted in some short-term dislocations which have negatively impacted demand,” Ayala said.

For his part, Fernando Zobel De Ayala said he is confident the local property market will be more resilient this time as credit remains largely available for both corporates and consumers.

“While the current environment is clearly challenging, we have been through worse times in the past, and have come out of those trying periods with our fundamentals intact and with more experience in managing through the cycles,” Zobel De Ayala said.

“We believe that these difficult times will further strengthen our position of leadership in the industry and in the marketplace as people seek refuge in quality and in the brands they trust,” he added.

3cr

April 2nd, 2009, 04:23 AM

Global crisis 'battering developing world'
By Veronica Smith
Yahoo News
http://uk.news.yahoo.com/18/20090331/tbs-global-crisis-battering-developing-w-5268574.html

The World Bank Tuesday forecast "unprecedented" declines in global economic output and trade volumes this year, warning that growth would also impact sharply in the vulnerable developing world.

The World Bank said its latest projections show the global economy shrinking by 1.7 percent in 2009.

"This would be the first decline in world output since World War II," the bank said.

The sharp contraction marks a dramatic 2.6 point downward revision of a projection from November last year, which saw 0.9 percent growth.

Developing countries have been hit harder than anticipated in the global economic crisis and lack the means to withstand the onslaught, the multilateral institution said in an outlook update released two days before a Group of 20 summit on the economic crisis in London.

Gross domestic product (GDP) growth in developing countries is expected to slow to 2.1 percent from 5.8 percent in 2008, it said.

The World Bank more than halved its November projection of 4.4 percent growth in 2009, an update of its projections in its "Global Economic Prospects" report published in early December.

The World Bank forecast recessions in Europe and Central Asia (negative 2.0 percent), and Latin America and the Caribbean (negative 0.6 percent).

"The 2009 downturn in world GDP and trade is unprecedented," the 185-nation development lender said.

The update "reflects the rapid deterioration in financial and economic conditions -- and the increasingly negative interaction between weakening economies and fragile financial systems -- that have come to the fore since late 2008 for virtually every country in the world."

According to the latest GDP projections, high-income economies would shrink 2.9 percent this year, a notch more than the prior estimate of 2.8 percent.

Justin Lin, the World Bank's chief economist and a senior vice president, said that China and India would continue to fuel growth in the developing world.

"If you would take out China and India (there is) zero percent growth this year," Lin said at a news conference.

Lin noted that developing countries excluding China and India would see "a decline in real incomes of 1.5 percent" because of their population growth.

"Across the developing world, we see that conditions of recession are affecting the poorest people, making them even more vulnerable than before to sudden shocks -- but also reducing opportunities available to them, and frustrating their hopes," Lin said in the statement.

"This could reverse years of progress" in the fight against poverty, he said, and "is nothing less than an emergency for development."

The Washington-based bank projected trade volumes would drop a record 6.1 percent from 2008, led by a steep decline in manufactured goods trade.

"This is the largest contraction in 80 years, that is since the Great Depression," Lin said.

Hans Timmer, manager of the bank's Global Trends, Development Prospects group, said a key risk for developing countries was a balance of payments crisis.

"Developing countries are directly hit in their own economy because what came along with this crisis was a reversal of capital flows to the developing countries," due mainly to a decline in private firms' investments after rapid growth during the boom years.

The World Bank projected a financing gap for developing countries of up to 700 billion dollars. Eighty-four of 109 developing countries would face financing gaps, particularly in Europe and Central Asia, Latin America, and Sub-Saharan Africa.

The World Bank said a "modest" recovery in 2010 was possible but highly uncertain.

"Continued banking problems or even new waves of tension in financial markets could lead to stagnation in global GDP or even to another year of decline in 2010," it said.

The report serves as fresh ammunition for World Bank president Robert Zoellick's push for an international fund to benefit the world's poorest people.

Zoellick has called on developing countries to donate 0.7 percent of their stimulus spending to the fund.

3cr

April 2nd, 2009, 04:54 AM

G20 leaders craft crisis response
Yahoo News
http://uk.news.yahoo.com/22/20090402/tpl-uk-g20-43a8d4f.html

World leaders are set to declare an end to unfettered capitalism at a G20 summit on Thursday after France and Germany demanded they act fast on promises to prevent a repeat of the worst economic crisis since the 1930s. Skip related content

A communique drafted for release at a G20 summit in London, obtained by Reuters, signalled that leaders would submit large hedge funds to supervision for the first time and enhance regulation through a new agency and a beefed-up International Monetary Fund.

It included a pledge to deliver "the scale of sustained effort necessary to restore growth" without making any commitments beyond the trillions being spent to stabilise banks, shore up demand and limit job losses.

Keen to secure a confidence-boosting message for voters and frazzled financial markets as the world succumbs to recession, U.S. President Barack Obama said there were no substantive differences with Europe, despite the hardball stances taken by the French and German leaders.

Washington wanted tougher regulation too, he told a news conference on Wednesday with Britain's Gordon Brown, summit host, saying he was at the summit not just to lecture but to listen and to help lead the way out of trouble.

It was not clear whether the flashpoint, which appeared to focus primarily on Sarkozy's demands for blacklisting of tax havens, would be enough to derail a message of unity from the meeting.

The draft communique said tax havens would be identified and sanctions could be deployed.

"The era of banking secrecy is over," it declared.

MOBILISING TRILLIONS

The G20 leaders hope around two trillion dollars governments are pumping into the economy in tax cuts, building projects and green investments, according to summit host Gordon Brown, will limit the depth and duration of recession and maybe create 20 million or so new jobs.

Paris and Berlin, fearing the summit would fall short of the mark on regulation of tax havens, hedge funds and markets in general, went in gunning for concrete announcements.

"Any regulations we don't agree here, won't be agreed for the next five years," Merkel told a joint news conference with her French counterpart on Wednesday. "The summit is not about horsetrading between regulation and economic growth programmes."

"In the results, we want the principle of new regulation to be a major objective ... This is not negotiable," French President Nicolas Sarkozy added.

Obama, making his first official visit to Europe, said G20 nations were not going to agree on every point but brushed aside suggestions the summit would falter because countries were split over the importance of regulation versus new stimulus packages.

"The core notion that government has to take some steps to deal with a contracting global market place and that we should be promoting growth -- that's not in dispute," Obama said.

"On the regulatory side, this notion that somehow there are those who are pushing for regulation and those who are resisting regulation is belied by the facts."

Sarkozy earlier threatened to disassociate himself from any "false compromises" at the summit, the second such meeting of world leaders to try to tackle the problems created by the downturn and credit crunch, which in turn began when the U.S. housing market collapsed over two years ago.

3cr

April 2nd, 2009, 04:59 AM

Obama, Brown predicting significant G-20 deal to fight global recession
By JANE WARDELL, AP Business Writer
Yahoo News
http://news.yahoo.com/s/ap/g20_summit

LONDON – Doggedly optimistic in the face of doubts, President Barack Obama and British Prime Minister Gordon Brown is predicting Thursday's emergency G-20 economic summit will produce a significant global deal to tackle the deepening worldwide recession. Others weren't so sure.

France warned on Wednesday that neither it nor Germany would agree to "false compromises" that soft-pedal a need for tougher financial regulation to curb abuses that contributed to the spreading chaos. And outside the carefully scripted meetings, protesters smashed bank windows and pelted police with eggs and fruit.

Thousands surged into London's financial district, blockading the Bank of England and breaking into a branch of the Royal Bank of Scotland. Elsewhere, however, inside the meetings, Obama said differences among the presidents and prime ministers of the Group of 20 rich and emerging countries, were "vastly overstated."

"I am absolutely confident that this meeting will reflect enormous consensus about the need to work in concert to deal with these problems," said Obama, who is under pressure to make a good showing in his first major international appearance.

With economic chaos spreading, Brown, the host of the summit, predicted agreement on a coordinated strategy, including a possible $100 billion fund to finance global trade, tighter financial rules and action to support economic growth and job creation.

G-20 leaders are also in general agreement on a plan to double the money available to the International Monetary Fund, to some $500 billion, to help emerging countries.

Consensus on further measures is by no means clear.

Brown initially trumpeted the gathering as "a new Bretton Woods — a new financial architecture for the years ahead." But the meeting so far bears little similarity to the 1944 New Hampshire conference where the eventual winners of World War II gathered to set postwar global monetary and financial order.

Washington has eased off on its push for other governments to pump more money into economic stimulus programs after heavy opposition from European countries, who contend their bigger social safety nets make more spending unnecessary.

Germany and France have instead campaigned for tougher rules to restrain financial market excesses.

That disagreement has lowered expectations for the London summit and weakened confidence in the world's ability to quickly pull out of the downturn.

Global trade is plummeting, protectionism is beginning to make inroads and unemployment is rising.

French leader Nicolas Sarkozy, who had earlier implied he might walk out if key demands on tighter regulation were not met, presented a more conciliatory stance at a joint London news conference with German Chancellor Angela Merkel, saying he had "confidence in Obama."

He still warned, however, that France nor Germany would reject "false compromises" and considered concrete steps on tax havens, hedge funds and ratings agencies crucial.

Paris and Berlin want definitive agreements on a crackdown on tax havens and action on other regulatory issues, rather than simple commitments to reform. The summit is also expected to consider lightly regulated hedge funds and how to clear bank balance sheets of shaky securities.

Sarkozy said that "without new regulation there will be no confidence. it's a major non-negotiable objective."

Merkel said both she and Sarkozy had come to London "in a very constructive mood." But she said, "We do not want results that have no impact in practice."

Even free trade remains the subject of potentially bitter dispute.

In their meeting in November, the G-20 members vowed to avoid protectionism that could stifle trade. But since then, 17 have acted to pass subsidies to protect their own industries or limit imports, according to the World Bank.

On Wednesday, leaders met in a series of bilateral meetings behind closed doors to try close the gap on key issues. They assembled for a formal dinner Wednesday evening before business meetings on Thursday.

Another growing concern for the conference is the plight of developing countries, amid growing fears that the heavy toll exacted by the global economic crisis on those nations could come with a heavy human and political toll.

U.N. Secretary-General Ban Ki-moon has written to leaders to urge them to approve a $1 trillion stimulus plan for developing countries and urge the G-20 countries to back away from damaging anti-trade policies.

It remains to be seen if the leaders will be able to avoid a repeat of the last time that London hosted a world economic summit — the 1933 World Economic Conference that tried to agree to plans to revive the global economy in the midst of the Great Depression.

Many commentators blame the collapse of that gathering — torpedoed in part by the recalcitrance of new President Franklin D. Roosevelt to make agreements that would restrict his freedom to act on the U.S. economy — for the subsequent erection of international trade barriers, continued competitive currency devaluation and rising unemployment.

3cr

April 2nd, 2009, 05:16 AM

G-20 leaders blacklist 4 tax haven nations, including the Philippines, Uruguay, Costa Rica
DAVID STRINGER | Associated Press Writer
April 2, 2009

LONDON (AP) — Four nations were blacklisted as uncooperative tax havens Thursday after G-20 leaders declared the age of banking secrecy was over and said they would no longer tolerate shady havens draining away badly needed tax revenue.

At the request of the Group of 20 summit of rich and developing nations, the Organization for Economic Cooperation and Development named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.

Leaders also said nations that refuse to exchange tax information could in the future face tough sanctions — including the withdrawal of financing by the World Bank or International Monetary Fund.

"The time of banking secrecy has passed," French President Nicholas Sarkozy said following the summit. "Everyone around the table wants an end to tax havens. Everyone knows we need sanctions."

__________________________________

Eurasia: 500,000 unhappy OFWs critical in 2010 polls (http://http://www.abs-cbnnews.com/nation/03/30/09/eurasia-500000-unhappy-ofws-critical-2010-polls)
by Lala Rimando, abs-cbnNEWS.com/Newsbreak
03/31/2009
http://www.abs-cbnnews.com/nation/03/30/09/eurasia-500000-unhappy-ofws-critical-2010-polls"

Risk consulting firm Eurasia has a tip to politicians thinking of running for office: Watch the rate of overseas Filipino workers’ (OFW) deployment. OFWs stuck in the country could make or break a candidate’s—including the presidentiables’—chances in 2010, the global firm said.

Robert Herrera-Lim, director in the Asia practice of the New York-based political risk consulting firm, Eurasia Group, told abs-cbnnews.com/Newsbreak in a recent visit to Manila that recent surveys have not yet accounted for the group of potentially ‘unhappy’ OFWs and their kin ranging from 500,000 to 700,000.

Herrera-Lim said that due to the current global economic recession affecting this group, it could develop into an opposition vote that could make a difference between winning and losing especially for those vying for national positions. In previous elections, the votes of winning senatorial contenders were just about 200,000 to 300,000 more than those who didn’t make it.

Eurasia considers the ‘unhappy OFWs’ in their assessment of where the Philippines is headed. This helps them guide clients—from multinational corporations, financial institutions, governments and non-governmental organizations—make informed business decisions in an emerging economy like the Philippines where understanding the political landscape is critical.

Half a million

While OFW remittances have become critical lifeblood of the Philippine economy—it accounts for over one-tenth of the country’s economic output, boosts the peso, and fuels businesses from cellphones to condominium units—Herrera-Lims said the impact of remittances goes beyond macro-economy.

“I think OFW remittance also has a political effect,” he shared.

Based on his estimates, Herrera-Lim said that there will likely be 500,000 to 700,000 OFWs and their kin who are 'unhappy' because they could not access work opportunities abroad.

He said current 2010 election-related surveys are likely to have not yet captured this block since this unhappy group will likely emerge by the third or fourth quarter this year. "The surveys might shift come fourth quarter," Herrera-Lim estimated.

His estimates took into account the number of OFWs who would like to be rehired by their previous employers, those who have come home or are coming home soon due to job cuts, and those who would like to work overseas for the first time because of lack of opportunities here.

Deployment

Herrera-Lim shared that Eurasia monitors the pace of OFW deployment instead of waiting for results of the remittance data, which business strategists and analysts typically consider in their future business plans .

The risk consultant said that, after all, the rate of deployment dictates the growth rate of remittances. Increases in the number of workers and professionals leaving for overseas jobs resulted in higher remittance levels after months or even a year.

Herrera-Lim noted that a number of OFWs especially those bound for the Middle East usually have 3 to 6 month-long vacation before they are re-hired for a new contract that would last for years.

He said those who are scheduled to take their vacation in first quarter are likely to want to or need jobs by the third or fourth quarter. By that time, they have used up most of their savings and are ready to be redeployed again.

But as the global economic crisis is not expected to ease by the end of the year, a number of these OFWs would not likely be rehired anytime soon. The Middle East countries' wealth, fueled by oil, have been hit by plunging oil prices, which currently hovers at $40 a barrel, a far cry from record $148 a barrel in July, 2008. The region absorbs more than half of the 8.7 million OFWs deployed abroad.

Add to that group those who lose or about to lose their jobs. Herrera-Lim described those in the Middle East as unlike Filipinos in the US or Europe who would tend to stay put and find alternative work when they lost or about to lose their jobs. Those in the Middle East tend to go home.

"They come home and they will accept menial work to get by. They are not happy," Herrera-Lim said.

He estimated that a good number of those who are not immediately rehired and the returnees are married, then assumed that a percentage have an 18-year old kid who could already vote. He also counted in the OFWs' relatives who have been benefiting from dollar remittances.

"I estimate that the total is at least 500,000," Herrera-Lim said. "That's a lot of unhappy people."

Hard times

The New York-based risk consultant also considered those who would like to seek job opportunities abroad for the first time.

“Deployment is inversely related to the GDP growth of the Philippines. It’s just logical that more people want to go abroad when the local economy is not doing well,” he said.

In the seventies, thousands of Filipinos jumped at the chance to leave for jobs in the Middle East when the Philippines was reeling from increasing foreign debts and a political and economic crises.

And when President Arroyo admitted that the country was facing a fiscal crisis in 2004, the total count of Filipinos leaving for overseas jobs in 2005 reached half a million for the first time in just six months.

These spikes in deployment took place at a time when it was the local economy that was slowing down.

The current US-triggered economic crisis, however, is a global one. "The problem is, we have not seen this kind of coordinated slowdown in the global economy. We haven’t tested yet the absorption rate of the global economy for Filipino labor in this environment," Herrera-Lim said.

This year, Filipinos are expected to take a hit as the local economy screeches to a slower pace of 3 to 4 percent—a far cry from the record high of 7 percent in 2007.

“Before, when our local economy slows down, OFWs leave for Middle East, Japan, the US, and others. But with the global crisis, the question is who will absorb them?” the risk consultant pointed.

“If they cannot leave, they are not happy.”

Opposition vote

Herrera-Lim highlighted the political leanings of OFWs who could not leave due to the dismal overseas job market: “Unhappy people don’t normally vote for the incumbent or will not support the candidate of the incumbent.”

He emphasized, “This will be an opposition vote.”

Currently, potential candidates for president that are assumed to be considering seeking the endorsement of President Arroyo are Vice President Noli de Castro, senators Manuel Villar, Manuel Roxas III, and Francis Escudero.

"They should watch out for this voting block," the Eurasia director said.

Hazy

At the moment, however, this voting block is still difficult to concretize since recent deployment data from the government have been hazy.

The Philippine Overseas Employment and Administration (POEA) reported that in the first two months of 2009, a total of 283,348 Filipinos left the country for employment abroad —a record 27 percent increase over the same period last year.

Recruitment experts have been contesting the data since the rosy numbers do not match their experience of increasing OFW contracts no longer being renewed. They said OFWs who returned to their work abroad after their Philippine vacation must have bloated the government’s count of ‘rehires’, which refer to those who actually renewed their job contracts and returned to their previous foreign employers.

Even analysts doubt government’s data. Citibank’s recent Asia Pacific study projected a decline in new hires and rehires by anywhere from 37 to 51 percent as the crisis cuts demand for migrant labor.

POEA Administrator Jennifer Manalili herself was also quoted as saying that the contracts processed for rehires declined by to 57,182, a decline of a whopping 43.5 percent in the first two months.

Nonetheless, there is consensus that 2009 remittances--the consequence of OFW deployments now--will likely miss last year's $16.4 billion level.

A World Bank economist recently announced the world's fourth biggest remittance receiving country (refering to the Philippines) could see money sent home by migrants fall by 4 percent to $15.7 billion.

Citibank's Asia Pacific study was even more pessimistic. Its market analysis cited a 30 percent plunge to $11.4 billion.

Go Global

April 2nd, 2009, 11:55 AM

^^
Boe, Idol. :cheer::applause::bow:

uk kid

April 2nd, 2009, 03:43 PM

Ydlar

April 2nd, 2009, 03:45 PM

Condo unit, then eventually house and lot. Nothing beats waking up in the morning without the hustle and bustle of the metro. (Provided that your house is not located in one. Lolz)

almycha

April 3rd, 2009, 06:04 AM

Hi Retro,
Thank you for your reply.I assume it is a covered parking becuase it is in basement.What do you think guys?I know it is quite expensive in pasay area but I am thinking in the future.Hoping for your reply.
Salamat.

Kung ako ikaw i will buy a parking lot. We have a house at villamor katabi or walking distance sa newport. Ang hirap sumakay dyan ng jeep, taxi or tricycle pag umaga sa Andrew avenue (tramo)at sa gabi naman ganoon din.

Retro

April 3rd, 2009, 06:42 AM

Hi uk kid,

Basement parking naman pala. Ok, na yun rate niya considering in the future mag appreciate yun parkingslot value. Beside its easy naman it to lease or sell in the future.

3cr

April 3rd, 2009, 01:01 PM

^^ Nahhh... :) :) :)

Leaders at G20 summit work on fixing rift over crisis
Manila Times
http://www.manilatimes.net/national/2009/april/03/yehey/top_stories/20090403top8.html

LONDON: World leaders worked on a deal to jumpstart the sputtering global economy at one of the most important summits of recent decades.

After sharp differences over how to restore confidence, representatives of US President Barack Obama and other Group of 20 leaders agreed the IMF could get up to $500 billion in extra funding and a tax-haven blacklist could be drawn up.

The British summit hosts expressed confidence an agreement would be clinched from the divisions at the meeting, which is being widely watched by markets and has sparked anti-capitalism riots in London in which one man died.

British Prime Minister Gordon Brown said in his opening speech to the summit that there was a “very high degree of consensus.”

The summit has focused on measures to regulate financial markets, a clampdown on excessive corporate salaries and tax havens and increasing funding for the International Monetary Fund (IMF).

Delegations were discussing ways to find hundreds of billions of dollars for the International Monetary Fund and other institutions, diplomats said. Some spoke of up to $500 billion of extra money.

Broad agreement

There was broad agreement on drawing up a “shame and name” blacklist of tax havens to force changes in banking secrecy.

Tax havens that refuse to share information with other countries will face “sanctions,” Stephen Timms, financial secretary to the British treasury told reporters.

“In due course there will be a list produced of countries that don’t sign up . . . what’s being discussed today is the timing,” he said. “The era of banking secrecy is over.”

A draft summit communiqué also called for restrictions on bonuses for bankers to discourage those who run short-term risks.

British security forces put up a ring of steel around the Excel Conference center in London’s Docklands district—near the headquarters of many banks blamed for the international crisis.

Small pockets of demonstrators built up around the summit and in the main financial district, the day after thousands laid siege to the Bank of England and attacked a branch of Royal Bank of Scotland.

One man died after collapsing during the protests. Police said bottles and other missiles were hurled at them as they tried to resuscitate the man.

More at stake

UN Secretary-General Ban Ki-moon warned in an article for Britain’s Guardian newspaper that more than economics was at stake in London.

He said that unless decisive action was taken, the crisis could lead to a “growing social unrest, weakened governments and angry publics who have lost all faith in their leaders and their own future.”

Inside the summit, rifts “persisted” on how to draw up a new rulebook for international finance and stimulus measures and combat protectionism, Britain’s Business Secretary Peter Mandelson told reporters.

France and Germany have demanded tough action by G20 leaders on regulation of global finance.

French President Nicolas Sarkozy and German Chancellor Angela Merkel raised fears that the summit could fail by saying they were not happy with draft conclusions distributed ahead of meeting.

They vowed to stand together to press for “non-negotiable” new global finance rules and resisted pressure—notably from the United States and Japan—to pledge new stimulus measures to revive their ailing economies.

“Without new regulations there will be no confidence. And without confidence there will be no recovery. It’s a major aim, non-negotiable,” Sarkozy told reporters at a combative joint press conference with Merkel.

When asked about his threat to walk out of the summit if leaders failed to agree on sufficient new regulations, he said: “This is a historic moment, and we cannot run away.”

“Everybody is going to have to pick up the pace and I think that there is a recognition based on the conversations that I’ve had with leaders around the world that that is important,” he said.

But Brazilian President Luiz Inacio Lula da Silva, who last week blamed “white people with blue eyes” for the global economic crisis, tried to dampen expectations for the summit’s final statement.

“We cannot leave with nothing,” he said, noting that traders around the world were looking to London for a sign. “We can only hope for the best possible agreement.”

_____________________________

G20 to tighten financial rules, increase IMF funding
Business World
http://www.bworld.com.ph/BW040309/content.php?id=003

LONDON — World leaders will impose new financial rules and triple the war chest of the International Monetary Fund (IMF) to fight the worst economic crisis since the 1930s, sources at the G20 summit said.

AFP Host Britain conceded there were still gaps to close. France and Germany are demanding concrete measures — not just promises — to crack down on tax havens and regulate hedge funds and markets.

"The text that has already circulated reflects the very high level of consensus that exists," British Prime Minister Gordon Brown said. "Obviously people have changes they wish to make to the text and if they give them to me I am prepared to look at them."

The communique drafted for the meeting, obtained by Reuters, said leaders would submit large hedge funds to supervision for the first time and enhance regulation through a new agency and a beefed-up IMF.

Summit sources said the latest draft summit communique provided for a $500-billion boost to the IMF’s resources, raising to $750 billion the funds it can make available to countries worst hit by the global crisis.

The IMF would also be able to borrow money on international markets if needed, the sources said. A British government minister said leaders would discuss possible sales of IMF gold reserves, which could raise yet more cash, although he did not expect an immediate decision on Thursday.

The G20 were also close to agreeing a trade finance package worth $250 billion to support global trade flows, a source at the summit in London told Reuters. Mr. Brown had been targeting at least $100 billion to help reverse the decline in trade following the credit crunch.

World stock prices, battered by the crisis for months, recovered some lost ground last month and shot higher on Thursday on hopes for a strong G20 agreement. The index of top European shares was up 3.2% after the Nikkei gained 4.4%.

"This is a positive step to jumpstart global trade flows. It is a significant contribution towards solving the problem," said Eoin O’Malley, senior advisor on international trade at BusinessEurope, Europe’s top business group.

"But the key now is implementation. G20 governments must act quickly to provide this finance to companies that need it urgently," he told Reuters.

Addressing one of the summit’s potential stumbling blocks, British Treasury Minister Stephen Timms said leaders were expected to agree "in due course" to the publication of a list of tax havens and to impose sanctions.

But it was unclear whether the vague timing would satisfy France and Germany, which have led demands for a crackdown on tax havens they blame for allowing the wealthy to avoid paying their fair share at a time of growing economic hardship. Paris said on the eve of the summit it would refuse to sign any communique that failed to satisfy its demands.

The draft communique included a pledge to deliver "the scale of sustained effort necessary to restore growth", but without making any commitments beyond the trillions already being spent to stabilise banks, shore up demand and limit job losses.

The world economy will shrink this year for the first time since World War Two and tens of millions of people are expected to lose their jobs.

Analysts said Thursday’s stock market gains would vanish if the summit does not deliver.

"A good rally is coming through, particularly from Asian markets overnight on hopes for a decent stimulus package from the G20 to lift confidence, especially with regards to emerging economies and a boost to the International Monetary Fund," said Henk Potts, strategist at Barclays Wealth.

Keen to secure a confidence-boosting message as the world succumbs to recession, US President Barack Obama has said there are no substantive differences with Europe, despite a hardball stance taken by France and Germany over regulation.

"The most important issue is that we agree ... on the principle that no financial market product, no financial market participant and no financial market can remain without regulation and without supervision," German Finance Minister Peer Steinbrueck told Deutschlandfunk radio.

The global economy is expected to shrink more in 2009 than any year since World War Two, dropping between 0.5-1.0%, according to the IMF, whose head, Dominique Strauss-Kahn, is calling it a "Great Recession".

"They are not yet moving quickly enough in doing the cleaning up of the financial system," the Financial Times quoted Strauss-Kahn as saying.

The draft communique contained a pledge by the G20 nations to allow "candid, evenhanded and independent" surveillance of their economies and financial sectors by the IMF, which will take an increasingly central role in global oversight.

It also unveiled a new Financial Stability Board to work with the IMF to identify economic and financial risks and measures to address them.

terman1718

April 3rd, 2009, 04:21 PM

3cr

April 4th, 2009, 06:07 AM

G20 Summit Analysis: Asian voices gain force as global crisis drags on
http://biz.thestar.com.my/news/story.asp?file=/2009/4/3/business/20090403093128&sec=business

WASHINGTON: Will it all work? World leaders achieved the minimum at their London summit, cobbling together more resources for the International Monetary Fund and pledging to do better regulating unruly financial markets

But no country would budge from its bottom line, so the big goals didn't get done.

But global markets cheered anyway, happy that the Group of 20 leaders were able to demonstrate unity in the midst of the worst financial crisis in decades.

In the end, the ability of President Barack Obama and the other leaders to paper over their differences may turn out to be the biggest achievement of all.

Despite some tough talk going into the meetings, including a threatened walkout by French President Nicolas Sarkozy if things didn't go his way, the leaders emerged with a show of common purpose.

Their final communique even contained a pleasant surprise in the form of a tidy $1.1 trillion pledged to help make sure emerging economies like those in Eastern Europe and Latin America can tap into sufficient resources at the International Monetary Fund to withstand the current turbulence.

That pile of money was easier to obtain because it won't force the United States or other countries to increase their deficits to supply the additional resources to the IMF. Instead, much of the increased support will come in the form of loans the major countries will agree to provide to the IMF if the agency needs more firepower.

The leaders also pledged to fill in the current gaps in financial regulation that have been laid bare by the troubles in subprime mortgage lending that began in the United States but have now spread to other types of loans and bank assets not only in the U.S. but around the world.

Obama stood firm against a determined push from Sarkozy and German President Angela Merkel for creation of a global regulator to attack what the Europeans see as a U.S.-brand of unfettered capitalism that brought the global economy to its knees. - AP

LONDON: Asian nations, who dominate the roster of industrializing economies, have won a greater say in salvaging and reshaping the global system that brought them unprecedented prosperity but now threatens to reverse that progress.

The sweeping consensus on reviving growth and stepping up surveillance of international financial institutions reached Thursday at the Group of 20 summit of major economies reflects that growing sway.

"I believe people will be encouraged by the fact that China and India and Japan and many countries ... we've all been able to come together in a way we could never have done even a year or two ago and designed quite detailed proposals that will reshape the global financial system," a jubilant British Prime Minister Gordon Brown said as the one-day meeting wrapped up with a pledge of $1.1 trillion in loans and guarantees to developing countries.

The statement issued by summit leaders included a pledge, responding to a chief demand from Asian and other developing countries, for reforms of the International Monetary Fund and other institutions to better match global economic and political realities.

"We will reform their mandates, scope and governance to reflect changes in the world economy and the new challenges of globalization," the statement said.

Such moves are needed, it said, to enhance the credibility and accountability of those organizations.

"China and other countries are right to say that the representation and the quotas of the IMF have to be changed to meet new times. We have set a timetable for doing that," Brown said.

Developing economies account for nearly half of all exports, and Asia for about half of that total.

With trillions of dollars in foreign reserves, China and other countries in the region have unprecedented financial heft.

"We have long called for increasing representation of emerging economies. This is finally taking place, but only very slowly," said Osamu Sakashita, deputy cabinet secretary for public relations for Japanese Prime Minister Taro Aso.

"There is a welcome shift but there is more to be done in that direction," he said.

Such changes are imperative given the shift of power and productivity to Asia in recent decades.

The last time London hosted a world economic summit, in 1933 in the midst of the Great Depression, geopolitical and economic power lay squarely in the West - in the United States and European colonial powers.

Today, China is fast overtaking Japan as the world's third-largest economy in terms of economic output, if not per capita wealth.

"International institutions need to reflect the realities of power in the world," said Ed Gresser, trade director at the Progressive Policy Institute in Washington.

"To be effective, they have to involve and include the emerging economies. They need to feel they have a voice."

Beijing has led demands from developing economies for a bigger say in managing the world's finances and had suggested its contribution to a global bailout fund might be contingent on receiving it.

Ultimately, at the London summit China pledged a contribution of $40 billion in extra funding, Brown said.

In the weeks before the summit, Chinese leaders stressed their desire for fundamental changes to the world financial order, calling for the creation of a new global currency to reduce reliance on the U.S. dollar and claiming advantages in their communist-ruled country's ability to bypass messy democratic processes.

Thursday's agreement stopped short of promoting a shift away from the U.S. dollar. But it did include, as expected, reassurances that rich countries will keep their markets open to exports, the lifeblood of modern affluence for much of the newly industrialized world.

The condemnation of protectionism also carried a pledge to make right, by the end of 2010, any market-restricting moves taken since G-20 countries last issued such a declaration, in November at the last summit.

"Actions that are protectionist will be named and shamed," Brown said. - AP

LONDON: Anxiously assembled at the most perilous moment for the global economy since the Great Depression, the world's financial powers pledged more than $1 trillion Thursday for emergency loans to contain the contagion.

But they rebuffed President Barack Obama's bid for new stimulus spending and made no guarantees of success.

"This was the day the world came together to fight back against global recession," declared British Prime Minister Gordon Brown, the summit host, as he led a choreographed show of unity designed to boost confidence in homes and boardrooms everywhere.

"This is just the beginning," added Obama.

No one promised an immediate impact, and all agreed much remained to be done.

Besides promising $1.1 trillion for lending to less-well-off countries - an effort to erect an economic firewall and prop up remaining markets for bigger nations' exports - the Group of 20 industrial and developing countries vowed major efforts to clean up banks' tattered balance sheets and get credit flowing again, to shut down global tax havens and to tighten regulation over hedge funds and other financial high-flyers in the U.S. and elsewhere.

But French President Nicolas Sarkozy and German Chancellor Angela Merkel failed to get the powerful "global regulator" they sought with authority across borders, an idea opposed by the United States.

The leaders did agree to some expanded international oversight, including cracking down on hedge funds and tax havens.

Collectively, the measures were an attempt to free the clogged pipes of capitalism, so spending, lending, borrowing and manufacturing can expand instead of continuing to retreat.

European and U.S. markets surged ahead of the concluding summit communique, and Wall Street held most of its gains after the results were announced late Thursday.

Unlike previous Western-dominated summits, this gathering included China, India and other economic giants as well as rising powers.

Said Brown: "I think the new world order is emerging, and with it the foundations of a new and progressive era of international cooperation."

Obama, in his first major venture into international diplomacy, failed to get U.S. trading partners to spend more money on job-creating stimulus programs, as the U.S. and Britain have done. The proposal was opposed strongly by France and Germany.

"I think we did OK," Obama told reporters afterward.

"When I came here, it was with the intention of listening and learning, but also providing American leadership. And I think the document that has been produced as well as concrete actions reflect a range of our priorities."

"In life there are no guarantees; in economics there are no guarantees," he said. Both Brown and Obama were asked directly, "What happened today to help the world economy," and they both sidestepped the question.

Sarkozy, who at one point had threatened to walk out if he didn't get his way on international regulation, said he was happy with the outcome.

Obama "helped me on tax havens," Sarkozy told reporters.

"He's a very open man. It was completely in line with what we wanted."

Police were out in force, swarming the east London riverside meeting site Thursday as demonstrators protested world poverty and climate change.

A French daredevil scaled a London insurance building to unfurl a banner, entertaining people on the ground.

He was led away by police.

It was a high wire act inside the ExCel center, too, where summit partners gathered.

In an effort to offset their inability to agree on the more divisive proposals, the G-20 leaders outlined a raft of policies to rebuild trust in the financial system, including guidelines for new openness.

"The era of banking secrecy is over," said a statement issued by the G-20.

The meeting was a follow-up to one last Nov. 15 in Washington, when the group vowed to resist national protectionism that hampers world trade and to take steps to overhaul the global financial system.

The economy is considerably worse now than it was then - and expectations for breakthroughs had been limited.

Participants sought to trumpet the achievements and not dwell on what they couldn't accomplish. Obama called the summit "a turning point in our pursuit of global economic recovery."

The summit partners renewed vows not to turn inward or pass protectionist policies, even though since the November meeting 17 of the 20 core members, including the United States, have acted to protect domestic industries.

In the U.S. those actions have included bailouts for Detroit automakers and a "buy American" provision in the $787 billion stimulus package passed by Congress.

The U.S., which has committed nearly $2 trillion to bailing out failed financial companies and trying to prod consumer spending and job creation, had urged other wealthy countries to do likewise.

But European countries, fearful that such deficit spending would rekindle the kind of runaway inflation that marked the 1920s, resisted, suggesting that the stimulus steps they had already taken were sufficient.

Brown, the host, said the communique put out by the group "reflects a very high degree of consensus and agreement."

In the boldest moves of the summit, G-20 participants announced a tripling of loans available to the International Monetary Fund, to $750 billion, a $250 billion expansion in a special IMF fund to help members' foreign exchange reserves, and $250 billion to the IMF to support trade.

They also agreed to sell IMF-held gold to poor countries.

The G-20 leaders also said that developing nations - hard-hit and long complaining of marginalization - should have a greater say in world economic affairs. Steven Schrage, a former U.S. trade official who is now an international business analyst with the Washington-based Center for Strategic and International Studies, gave the G-20 credit for bolstering the IMF, but said much more needs to be done.

"Given the circumstances, they handled it well. But when you look at this global fire that continued to spread over the last five months, there's still not a clear way forward on a lot of the critical challenges," he said.

"There's still no real agreement on stimulus going forward."

___________________________________

China and the G20: Taking the summit by strategy
Apr 8th 2009 | BEIJING
From The Economist
http://www.economist.com/world/asia/displaystory.cfm?story_id=13447015

Viewed from home, China and its president, Hu Jintao, had a good G20

THE photograph said it all. Leaders of the world’s biggest economies lined up for the cameras before working out ways of tackling the global financial crisis. There in the middle of the front row, in what the Chinese press construed as the most honoured position to the right of the British prime minister, Gordon Brown, was President Hu Jintao of China. The state-controlled media loved the implicit message. China had taken centre stage.

For China the purpose of the G20 summit in London on April 2nd was as much about nudging into place a new alignment of global power as it was about solving the world’s economic problems. In recent years its leaders have been happy, along with those of other large developing countries, to be invited to summits of the G8 group of industrialised economies. But it has shown no interest in formal membership, not least for fear of being in a room full of (mostly) rich democracies.

The G20, with more than half of its members from the developing world, is a setting in which China feels far more at ease. The convening last November of the first heads of government meeting of the G20 in Washington, where Mr Hu stood to the left of then President George Bush, provided a new springboard for Chinese diplomacy, just at a time when China’s policymakers were beginning to sense that economic disarray in the West could be turned to China’s strategic advantage.

In London China pressed that advantage most visibly with France, which during the past year has been singled out for opprobrium by Chinese nationalists. Before the G20 gathering, China had not scheduled a meeting between Mr Hu and his French counterpart, Nicolas Sarkozy, even though Mr Hu was to hold bilateral talks with other world leaders, including his first encounter with Barack Obama.

Mr Sarkozy’s offence had been to meet the Dalai Lama last December. This was the last straw for China after unruly protests by Tibet supporters against an Olympic torch relay through Paris in April 2008 and a threat (unfulfilled) by Mr Sarkozy the previous month that he might boycott the opening ceremony of the Beijing Olympics in August 2008 because of Chinese behaviour in Tibet. China responded to his meeting with the Dalai Lama by aborting a summit with European Union leaders due to be hosted by France. It is now to be held in late May in the Czech Republic, which has taken over the rotating EU presidency.

Mr Hu’s speech to the G20 was entitled “Co-operating hand-in-hand, pulling together in times of trouble”. But it was only after France had agreed to issue an unusual joint statement with China, setting out the French position on Tibet, that Mr Hu arranged a separate meeting with Mr Sarkozy in London. In the statement, France said it did not support Tibetan independence in “any form” and that it regarded Tibet as an “inseparable” part of China. It fell short of a promise not to meet the Dalai Lama again, but China was clearly pleased by such a formal, explicit rejection of Tibetan independence by a Western power.

Mr Sarkozy, it appears, did not cave in entirely to Mr Hu. During the summit itself the two leaders sparred over whether the G20 should publish a blacklist of tax havens. Mr Hu objected to the idea (apparently fearing that Hong Kong and Macau might end up being tarred). In the end, Mr Obama took them aside separately and got them to agree that the G20 should merely “note” a list of such havens published by the Organisation for Economic Co-operation and Development. The list did not name the two Chinese territories.

In the build-up to the G20 meeting, Chinese officials had been unusually forthright about the new economic order they wished to see. The governor of the China’s central bank, Zhou Xiaochuan, had suggested the use of the IMF’s Special Drawing Rights as a new international reserve currency to replace the dollar. He had also pointed out China’s “superior system advantage” when it came to making prompt and effective responses to the financial crisis. At the G20 Mr Hu boasted of the currency swaps totalling 650 billion yuan ($95 billion) that China has recently pledged to several countries, including Indonesia, Argentina and Belarus. This could result in more trade with these countries being conducted in the Chinese currency.

Power in reserve

With nearly $2 trillion in foreign currency reserves, China certainly has clout. Mr Hu pledged a loan of $40bn to the IMF, and will expect some dividends when the IMF reviews the voting rights of participants in 2011. China wants a bigger share of them. Mr Hu will be pleased that Western countries appear willing to cede control over appointments of the heads of the IMF and World Bank, traditionally awarded to Europeans and Americans respectively.

But Mr Hu will be satisfied not least with the limelight. Much as Chinese officials coyly dismissed the notion that the meeting of real significance in London was that of the G2—China and America—the official press revelled in the attention he received. Outlook Weekly, a magazine published by China’s state-controlled news agency Xinhua, chose as its cover marking the London summit a picture of only two leaders, Mr Obama and Mr Hu.

tafftrader

April 5th, 2009, 01:12 AM

diamant26

April 5th, 2009, 03:14 AM

Hi everyone. I'm looking into investing into some high-end condos to rent out in the Philippines and need some advice. How would you guys rate the following locations in order of the highest yielding Return on Investment to the least:

1. Makati
2. Global City
3. Ortigas
4. Rockwell
5. Quezon City

I was told that in Makati, some condos yield 10% ROI per annum. Please verify. :) Thanks in advance.

jpdm

April 5th, 2009, 03:24 AM

nasa maling thread ka ata sir.

3cr

April 5th, 2009, 09:51 AM

A faint sound of applause
Apr 2nd 2009 | WASHINGTON, DC
From The Economist
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13411349

Some signs suggest that the recession is lifting, but the path to recovery is still fraught with danger...

THE current recession has broken many of the rules of business cycles, but not this one: when something gets cheap enough, buyers emerge.

America’s housing bubble seems mostly deflated. According to the S&P/Case-Shiller 20-city index, house prices through January were down 29% from their all-time peak. Relative to incomes, houses are now 10% undervalued, and relative to rents they are fairly valued, thinks Paul Dales of Capital Economics, a consultancy.

This is luring buyers back. House sales rose unexpectedly in February. The National Association of Realtors estimates that up to 45% of existing homes sold were “distressed” properties—those in, or close to, foreclosure. In Nevada, which with California, Florida and Arizona was the epicentre of the boom and bust, fourth-quarter sales were more than double their level a year earlier. Keith Kelley, a Las Vegas estate agent, has an investor interested in offering about $80,000 for a foreclosed, four-unit apartment building which, fully let, could bring in over $25,000 a year in gross rent. He has two buyers interested in paying $220,000 for a five-bedroom house that sold in 2004 for more than triple that. Their monthly mortgage payment would be about half the rent on a similar property. Even so, he says, “I still talk to buyers waiting to see when we get to the bottom.” Indeed, homes may be fairly valued now but could get dirt cheap if, as commonly happens, prices overshoot.

The stabilising of the housing market is one of several tantalising glimmers that the end of the recession may be in sight. In March factory purchasing managers were their least gloomy about new orders since last August. Vehicle sales rose 8% in March from February. New claims for unemployment insurance have stopped rising. Gross domestic product, which shrank at a 6.3% annual rate in the fourth quarter, probably shrank at a similar rate in the first, but the composition of the drop was more encouraging; it was driven not by the collapse in consumer spending, but by sinking output as businesses sought to bring inventories into line with lower sales. Second-quarter growth “has a good chance of being positive”, according to Ian Morris and Ryan Wang, economists at HSBC, though “the risks…are still huge.”

What has brought this turnabout? In part, the normal corrective powers of the economy. Larry Summers, Barack Obama’s main economic adviser, has noted that current annualised vehicle sales of about 9m are well below the 14m necessary for replacement and rising population, while annualised housing starts are about a quarter of the rate needed to support the forming of new households.

The improvement is also the expected response to monetary and fiscal stimulus, both of which have been exceptionally aggressive. The Federal Reserve, having lowered short-term interest rates in effect to zero, has intervened in bond markets to push down long-term mortgage rates as well. On April 1st paycheques were due to begin reflecting the tax cuts in Barack Obama’s $787 billion fiscal stimulus.

As investors have shifted their economic outlook from catastrophic to merely grim, the stockmarket has shot higher, by 19% on April 1st from its 12-year low on March 9th. Like houses, stocks look cheap. Strategists at Deutsche Bank estimate that investors can expect to earn an additional seven percentage points over the long run from holding stocks instead of Treasury bonds, the highest such “equity risk premium” in at least 25 years. Mr Summers says it may be “the sale of the century”.

Yet even if the bottom in economic activity is in sight, a robust recovery almost certainly is not. Housing usually leads the way out of recession as falling interest rates unleash pent-up demand. But easy credit in earlier years has turned many renters into homeowners already. At the end of last year 67.5% of households owned their home, down from a peak of 69% in 2006 but still well above the 64% that prevailed from 1965 to 1997. Moreover, many prospective buyers cannot take advantage of low mortgage rates because higher down-payments are now required.

The tonic of lower interest rates has been dulled by the dysfunctional financial system. That is why credit markets have not reflected the optimism of stocks and are forcing corporations to pay punitive yields on the bonds they issue (see chart).

Consumer spending may also be depressed for some years to come by the record 18% collapse in household net worth over the course of last year, a drop of $11 trillion. That is a chief reason why the OECD on March 31st released an exceptionally gloomy prognosis, predicting that the American economy would shrink by 4% this year and not grow at all next year. Deflation, it said, “may become a threat”.

The greatest risk of renewed recession or stagnation comes from the banking system. As long as home prices keep falling and unemployment keeps rising, banks’ bad loans will keep mounting. Huge questions hang over the Treasury’s plan to remove those loans, and many economists think it must commit more public capital than the already authorised $700 billion in TARP money. Perversely, a continued stockmarket rally could undermine the chances of more aid, lulling some in Washington to believe enough has been done.

Tim Geithner, the treasury secretary, understands that. “The big mistake governments make in recessions”, he said on March 29th, “is…they see that first glimmer of light, and the impetus to policy fades.” Yet he hurt his own case the same day by saying that more TARP money is not needed for now because some banks will repay the government capital they have previously received. That is bad news, not good news: banks are lining up to repay the money to free themselves from political interference, even though the loss of capital will constrain their lending. That increases the odds of a multi-year, Japanese-style credit crunch.

Even if the administration wants the money, Congress at present is in no mood to grant it. The Senate and House budget resolutions were silent on the administration’s request for $750 billion in extra funds (with a budgeted cost of $250 billion). The administration is wisely waiting for tempers to cool before asking for the money.

3cr

April 5th, 2009, 09:59 AM

The G-force
From Economist.com
Apr 2nd 2009
http://www.economist.com/daily/news/displaystory.cfm?story_id=13415746

The G20 outcome is better than nothing, but can the IMF save the world?

WHEN an infamous summit of world powers in London ended in 1933, such was the mood of protectionist acrimony that many argued it would have been better if the meeting had not been held at all. At times in the run up to the G20 gathering of world leaders in London on Thursday April 2nd it looked as if history might be repeated. But the leaders have shown some grit, and some ingenuity in finding money when little is about. Many holes can be picked in their pledges to reflate the world economy and re-regulate global finance. But, at the very least, it was better that they met than not.

The centerpiece of the leaders’ plan is, conveniently, the IMF, which they believe can add an extra $1 trillion in funding to the world economy without the risk of ballooning national budgets, or obstruction from national politicians. That financial conjuring trick gets the G20 out of a bind. Gordon Brown, the British prime minister, has made much of $5 trillion in public spending that governments around the world have promised to help shunt their economies out of recession in 2009-10. But big spenders such as America and Britain are up against their limits and fiscal hawks such as Germany are stubbornly convinced they have done enough.

That leaves the IMF as pump-primer of last resort, although not all of the funding promises made on Thursday were new. Japan and the European Union had already agreed to put $100 billion each into the IMF’s kitty. Rich countries such as America will provide a $500 billion credit line, known as New Arrangements to Borrow. This was trailed several weeks ago. Significantly, the IMF will print $250 billion of its own currency, known as special drawing rights, allocating sums to its members according to their quotas. It is not clear whether this can be redirected from rich countries to poor ones.

This flood of extra resources, plus an enhanced oversight role the G20 has given to the fund, will be a huge turnaround for an institution whose relevance had slumped in the boom years. Now the new money must be directed to developing countries, especially in eastern Europe. Many such countries have been loth to tap the fund because of the stigma involved. A pledge by the G20 to reform the fund’s governance soon may convince them that the leopard has changed its spots. This week Mexico secured a $47 billion credit line with the fund, with no strings attached, which may set a trend. Eswar Prasad of the Brookings Institution believes the commitment to reform is credible. His evidence is that China has agreed to chip in $40 billion, prior to any changes to its voting power in the IMF (it has the same heft as Belgium). Others, however, remain sceptical. “This is still supply chasing demand,” says Arvind Subramanian of the Centre for Global Development.

The importance of offering new sources of funds to the developing world should not be underestimated, however. By some estimates poor countries have $1.4 trillion of debts to roll over this year alone and Western creditors are hoarding their cash. These countries have far less fiscal room for manoeuvre than rich economies. They are also areas of the world where growth could rebound quite quickly, because households are not weighed down by the crushing debts typical in America and Europe. In a further fillip to many of them, the G20 agreed to ensure $250 billion in trade finance to help reboot global trade—though it was not clear how much of this was new money.

As for efforts to drag the developed world out of the mire, the G20 went perhaps further than had been expected, though undoubtedly not far enough. It emphasised the problem of scrubbing toxic assets off banks’ balance-sheets, but gave little guidance on how banks should be forced to mark down their assets to saleable prices. (Undermining that effort, on Thursday American accounting standard-setters watered down a mark-to-market provision that would have forced banks to value their assets at market prices. The short-sighted reprieve led to a huge rally in the shares of stricken banks such as Citigroup.)

It also, in a nod to strongly held German and French sentiments, called for regulation of hedge funds and other parts of the shadow banking system, a crack down on tax havens and banking secrecy, and more oversight of credit-rating agencies. There was little to suggest that one of the main causes of the crisis, incentives for banks to grow too big to fail, was being tackled.

Financial markets rallied after the G20 news, though this was as much because of sprigs of good economic news emerging as the harmony that was displayed. This was despite disappointment that the European Central Bank had cut its main interest rate on Thursday, by just a quarter of a percentage point, to 1.25%. American unemployment figures on Friday, which could be shocking, may puncture some of that optimism, and should temper any temptation among G20 leaders to claim success. Their efforts to reflate the world economy may have avoided a 1930s-style depression so far. But rising joblessness and years of pain may lie ahead as banks, businesses and households in the West continue to struggle to pay down their debts.

_____________________________________

Global crisis has silver lining for IMF
Fund gets budget boost, becomes main beneficiary of g20 summit
By Veronica Smith , Agence France Presse (AFP)
Daily Star
Monday, April 06, 2009
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=100691

WASHINGTON: From the ashes of global prosperity the International Monetary Fund (IMF) emerged this week as the bulwark against the economic crisis, its role and finances heavily bolstered by world leaders. The IMF was the main beneficiary at the Group of 20 London summit where leaders agreed to triple its war chest to $750 billion by adding $500 billion, some of it already pledged.

The 20 industrialized and developing countries backed an extra $250 billion to increase the fund's reserve assets and pump liquidity into the gridlocked financial system.

The summit Thursday also set a target to more than double the IMF's concessional lending to poor countries, and endorsed the use of a portion of the IMF's planned gold sales to help finance it.

The G20 not only sharpened the IMF's firepower to fight the global contagion, but placed the 185-nation fund at the center of what summit host British Prime Minister Gordon Brown says is a "new world order" based on international cooperation.

The summit decisions represented that new order, as China, India and other emerging powerhouses reached accord with the established Group of Seven (G7) powers - Britain, Canada, France, Germany, Italy, Japan and the United States - on a way forward to deal with global economic crises.

The IMF was called on to improve its early warning systems to head off financial crises before they can spill over into the broader world economy, in collaboration with the Financial Stability Board, a beefed-up successor to the Financial Stability Forum.

The G20 also committed themselves to implementing IMF reforms under way and called for further reforms to make the 185-nation more transparent and more representative of the globalized economy.

The summit stamp of approval on the IMF, albeit forged in the most devastating economic crisis since World War II, marked a milestone for the developing countries which long have criticized the fund's lending conditions as harmful and railed against its G7 domination.

It was only a year ago the IMF was struggling to reinvent itself.

Member nations overwhelmingly approved major voting and quota reforms in April 2008, yet they are still awaiting approval by their legislatures.

Managing director Dominique Strauss-Kahn launched an employee buyout program to cope with a budget shortfall because of dwindling demand for its loans.

Hopes grew that the credit crisis that began in the US mortgage sector in August 2007 would be contained.

Then Wall Street investment bank Lehman Brothers collapsed last September, triggering the worst financial crisis since the 1930s Great Depression.

The IMF has seen its fortunes rise as others fall.

"You will see that it's the beginning of increasing the role of the IMF, not only as a lender of last resort, not only as a forecaster, not only as an adviser in economic policy and its old traditional role, but also in providing liquidity to the world, which is the role finally, and in the end, of a financial institution like ours," Strauss-Kahn said.

Analysts hailed the G20's generous outlay as a boon to global stability and to the developing countries.

Uri Dadush at the Carnegie Endowment for International Peace said the G20 communique was "striking in the degree to which it accommodates the interests of developing countries in various ways; they are the greatest likely beneficiaries of the increase in IMF and multilateral development bank resources."

Jan Randolph at IHS Global Insight agreed.

"These sums more than match the total amount of capital flight and bank loan redemptions from emerging markets since 2007 of over $700 billion and will go a long way to supporting financial stability in the developing and emerging market world," Randolph said.

But the IMF's enhanced role drew fire from critics who say no new money should go to the IMF until it changes its policies.

"We have deep concerns about how central the IMF has become in this crisis. The fund has been given a blank check but its reform remains no more than a promise," said Duncan Green at Oxfam International, an anti-poverty organization.

With the ink barely dry on the G20 communique, India laid partial blame for the crisis on inadequate IMF surveillance.

"As far as the developing countries are concerned, there has already been all these years excessive surveillance of the developing countries' economies," Indian Prime Minister Manmohan Singh said at a post-summit news conference.

"The real imbalance in the functioning of the IMF has been that there has been too little surveillance of the affairs of the developed countries."

3cr

April 6th, 2009, 05:22 AM

Asia looks to G20 pledge to revive trade
PhilStar
Updated April 05, 2009
http://www.philstar.com/Article.aspx?articleId=455307&publicationSubCategoryId=66

BEIJING (AP) — The G20 summit’s promise to Asia of money to help credit-starved exporters and a bigger voice in global finance should help the region revive growth, business leaders and economists said.

The London summit on the financial crisis ended Thursday with a promise of $250 billion from major governments to pump up global trade credit, which has shriveled as lenders hoard cash, worsening a double-digit drop in Asian exports.

Many of the region’s export-dependent economies have tipped into recession not only because demand from the West has crumbled amid the global slump but also because financing for trade has become scarce.

“Short-term financing is important now for the world economy to grow and trade to take place,” said Li Wei, an economist at Cheung Kong Graduate School of Business in Beijing.

In Southeast Asia’s biggest economy, Indonesia, where industries from textiles to auto parts have been paralyzed by a lack of credit, the money should play a role in restoring normal production, said Sofyan Wanandi, head of the Gemala Group, a conglomerate.

In India, where trade is 35 percent of the economy, the money should help textile and diamond exporters that have been hit by falling demand, said Amit Mitra, secretary general of business group FICCI.

“They are under a severe cash crunch,” he said.

Hong Kong and Singapore, both major traders, should benefit as easier credit helps to boost exports, analysts said. In Hong Kong, exporters are avoiding taking large orders for fear cash-strapped buyers cannot pay.

There was also optimism that Asian economies would be helped by the summit’s promise to triple the resources of the International Monetary Fund to $750 billion and to create a $250 billion IMF fund to help members’ foreign reserves.

China, the world’s third biggest economy, should benefit as the measures restore demand in export markets, said Standard Chartered economist Stephen Green.

China’s economy is expected to grow by at least five percent this year, though that would be a dismal performance compared with the past few years. A drop in exports has already thrown at least 20 million people out of work.

Beijing also succeeded in its campaign for more influence in managing the global economy, winning a pledge at the summit to give developing countries a bigger role in the IMF and other finance bodies.

That might make Asian governments more willing to turn to the Washington-based group for help in a crisis, said Cheung Kong’s Li.

He said that would free them to spend more of their foreign reserves instead of saving for emergencies.

Asian leaders have been reluctant to deal with the IMF since the 1997 financial crisis, when reforms recommended by its experts prompted a public backlash.

______________________________

Surging Wall Street faces critical earnings season test
Yahoo News
http://news.yahoo.com/s/afp/20090404/ts_afp/stocksusweekly

NEW YORK (AFP) – After putting together a remarkable four-week winning streak, Wall Street faces a new test of its rally in the coming week with the opening of earnings season.

Although the market has been lifted by optimism that the worst crisis since the Great Depression is easing, the news from corporate America may provide clues about whether and when recovery is coming, say analysts.

The Dow Jones Industrial Average climbed 3.1 percent in the week to Friday to close at 8,017.59, capping four sizzling weeks that added some 22 percent to the blue-chip index.

The Standard & Poor's 500 index advanced 3.25 percent to 842.50, capping a 24 percent gain from lows hit March 9.

The tech-heavy Nasdaq powered higher by 4.96 percent on the week to 1,621.87.

The market managed to shrug off weak economic news in the past few sessions, amid a growing consensus that the worst may be over.

"While the economic news continues to be awful, recent news, including the small incremental bump in auto sales, factory orders and (a purchasing manager survey on) manufacturing, are leading many investors to believe the end of the economic recession is finally coming into sight," said Fred Dickson, chief market strategist at DA Davidson & Co.

"We are holding to our view that the rate of decline in the economy is beginning to slow, leading us to believe the economy has a good chance of bottoming out this summer."

Dickson said the rally has gained momentum as short sellers scramble to take profits and cover positions, and money managers with big cash positions "are becoming more nervous about missing the normal big early cycle move that traditionally leads an economic recovery."

But he said a key test will be upcoming with first-quarter earnings reports that will begin to hit the tape over the next few days.

"That will be a real test to see if the current rally is just a technical rally within the overall context of an ongoing bear market or the first leg of a new bull market," he said.

"Investors are very focused on what the economy will do in the second and third quarters," said Hugh Johnson at Johnson Illington Advisors.

"To get an idea of what the economy and earnings will do you have to look carefully at these earnings reports."

Many reports will be dismal but a key factor will be how companies see demand and whether they retrench further or gear up for better times.

In the coming week, Tuesday's quarterly report from aluminum giant Alcoa provides the traditional kickoff for earnings season. Earnings will get into full swing in the following week with results from key firms such as Google, Citigroup and General Electric.

Analysts said the market took in stride Friday's report showing a rise in the unemployment rate to 8.5 percent as 663,000 jobs were shed.

Douglas Porter, economist at BMO Capital Markets, said the view looking forward is not as bleak as in the rear-view mirror.

"Employment will be among the last major indicators to turn the corner," he said.

"First, sales must revive, and then be sustained, then business will try to squeeze more out of remaining employees, then add hours to the workweek, and only then add to payrolls. So, even as jobs spiral lower, another broad array of indicators this week suggested that the howling recession winds may be easing a touch."

Aaron Smith at Economy.com said the latest payrolls report was consistent with a 6.0 percent drop in US economic activity in the first quarter, which is terrible but not as bad as the 6.3 percent pace of decline in the fourth quarter.

"Economic data, growth momentum and policy have turned more supportive for equities," he said. "The next big hurdle will be first-quarter earnings due out over the next several weeks."

Bonds fell sharply for the week on improved appetite for stocks. The yield on the 10-year US Treasury bond rose to 2.907 percent from 2.761 percent a week earlier and that on the 30-year bond increased to 3.721 percent from 3.618 percent. Bond yields and prices move in opposite directions.

Aziza1121

April 6th, 2009, 07:58 AM

What's the situation with issue of CCT?

I am negotiating to buy a resale from Vivant at Alabang. The owner does not have the CCT! I spoke with operations and they told me that the CCT's should be ready sometime this year. Something to do with this being a "Shared Development". Can anyone shed any light on this matter?

From my understanding CCT's are issued within 6 months of acceptance of the unit.

Hi, tafftrader. I bought a residential corner lot in Palawan from Filinvest. It is a joint venture project. I paid it in cash, Im the rightful owner, but I dont have the lot title in hand. Only a certification from the developer proving that I purchased the said lot and I am the rightful owner. I didnt pay the retention fee yet because I want to sell it before the title will be transferred to my name. In this case, there will be no taxes yet due for the sale. Only a minimal amount for the transfer of ownership and redocumentation. But if there's a sure buyer and requires the title, I will pay the retention fee. Maybe, just maybe, the same kami ng plan ng unit seller mo.

But ask them to explain to you clearly and specifically what is that something in it being a shared development that delays the CCT. They have to give you in writing the specific date that the CCT will be available. Check direct with the office and ask for proof that the seller is the rightful owner.

I believe shared development and joint venture is same. Hope this helps.

terman1718

April 8th, 2009, 05:46 AM

The Five Vs Before Buying Philippine Property
Source: http://www.realestatephilippinesblog.com/the-five-vs-before-buying-philippine-property/

Here are the five Vs or the 5 Verifys every buyer must remember before investing any in the Philippine property and declaring it “Safe to Buy”:

V1.) Verify if the Transfer Certificate of Title (TCT) is authentic by getting “Certified True Copy” of the title from the Register of Deeds. This office is usually located at the city or municipal hall where the property is located. Ask the seller of the property for a photocopy of the title since you will need the title number and the name of the owner get a certified true copy of the title from the Register of Deeds.

V2). Verify that title is free of liens & encumbrances, or that there are no mortgages or claims on the property by other parties. You can see that at the back of the title with the heading “Encumbrances”. This section must be blank. (sometimes the space for the technical description is too long that it reaches “Encumbrances” page, which is ok)

V3). Make sure that the sellers are the real owners. If you are buying from an individual property owner, ask for identification papers like passport or driver’s license. You can also ask from the neighbors if they are indeed the true property owners.

V4). Verify if the yearly real estate taxes (“amilyar” in Tagalog) are paid. Ask for certified true copies of the Tax Declaration and original Tax Receipts to confirm that real estate tax payments are up to date.

V5). (Applicable to Land Titles) Verify if the land described on the title is the actual land that you are buying. You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don’t have any street name and number, so it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title

Just remember these 5 Verify’s before buying ANY Philippine Property to make sure you’re placing your money in a truly safe investment. Happy Hunting Folks! :-)

terman1718

April 8th, 2009, 05:13 PM

Hmmm.. you can PM me mr. Tony about that Rent-to-Own option if you want. It won't be easy and it will take time, but you will sell your unit faster :-)

3cr

April 11th, 2009, 11:28 AM

Global Economy Should Not Rely On U.S., Stiglitz Warns
By Rupert Walker
Business Week
http://www.businessweek.com/globalbiz/content/mar2009/gb20090325_202191.htm

Professor and Nobel laureate Joseph Stiglitz, says that the world can no longer count on the U.S. consumer, anticipates a new economic world order...

Policymakers are focusing too much on the costs of fiscal stimulus packages, rather than their benefits, said Joseph Stiglitz, Nobel laureate and former chief economist at the World Bank, on the opening morning of the Credit Suisse Asian Investment Conference in Hong Kong yesterday.

Consequently, these spending programmes may be too tepid, especially when, as in the United States, they contain too great an emphasis on tax cuts, and are neutralised by a contraction in expenditure by revenue-starved local authorities that are compelled to balance their budgets.

Stiglitz was also sceptical about US Treasury secretary Timothy Geithner's plan for a public-private partnership to buy "toxic assets" from banks because it might turn a "zero sum" game into a "negative-sum" game, by leaving taxpayers with losses while providing opportunities for profits for gamblers and fraudsters in the private sector.

In response to concerns about governments and central banks laying the seeds for future inflation through their massive spending programmes and ultra-loose monetary policies, Stiglitz argued that deflation would be far worse. It creates a deleterious chain of damage, as fixed debt obligations become more expensive, leading to individual payment defaults, worsening bank balance sheets and a further contraction in credit. The subprime calamity is already morphing into a wider crisis as it spreads to prime mortgages, car loans and credit cards.

But Stiglitz did warn that inflation can happen suddenly and unexpectedly, and that the US Federal Reserve was courting danger by artificially reducing long-term interest rates by buying commercial assets, such as corporate bonds, rather than just Treasury bills.

However, he was also scathing about the past behaviour of Federal Reserve officials and commercial bankers who, he argued, have a myopic concentration on price stability, while missing the far bigger threat of inflated asset values supported by inadequate financial structures. The housing market was the most egregious manifestation of that short-sightedness.

Stiglitz, who is currently a professor at Colombia University, pointed out that the past economic model—US consumption supporting world trade—is unlikely to be resurrected, as the US savings rate increases in tandem with the uncertainty of a higher unemployment rate. So, we should not anticipate a return to the conditions similar to the beginning of the boom in 2002. Most importantly, US exports and investments must show signs of picking up, while the engine of domestic demand must shift to other parts of the world.

Stiglitz is "very optimistic" about China, although he is conscious that as an outsider he might be viewing the country with rose-tinted glasses. He praised the recent fiscal stimulus programme, with its emphasis on developing a social safety-net by devoting spending to education, health services, insurance and pensions. The population should feel more secure, he said, which would lead to a pick-up in domestic consumption and moving the economy away from its reliance on exports. However, he noted that the Chinese savings rate is not abnormally high; it's just that household income as a proportion of GDP is low, while corporate profits are correspondingly high. Hence, wages need to increase, which might be facilitated by an expansion of the small-and medium-sized enterprise sector. However, he is worried that too much consolidation in key industries might reduce China's efficiency, and that the government may be reluctant later on to cut what are effectively subsidies for natural resources that will artificially boost corporate profits.

Commenting on Asia in general, Stiglitz said that it is understandable that the "class of '97", the Asian countries whose sovereignty was effectively taken away by the International Monetary Fund and US Treasury policies during the crisis a decade ago, has focused on building up foreign exchange reserves above all else since then. However, as a result they have become victims of the "paradox of thrift", ever dependent on a profligate US consumer to support positive trade balances.

But, he was encouraged by developments such as the expanded Chiang Mai Initiative currency swap arrangement, which he sees as a potential nascent regional currency reserve system that, if combined with similar support agreements in Latin America, for instance, might evolve into a viable global reserve system, replacing the increasingly discredited US dollar. The dollar, he said, is no longer a good "store of value": It is volatile and diminished by the printing press, and the confidence on which it should be predicated has been lost due to political and economic instability.

One day, Stiglitz believes, the world will have a genuine "super currency" as Keynes originally desired back in 1944 at the Bretton Woods meeting, which did so much to shape the post-war financial landscape.

barisalvador

April 11th, 2009, 11:39 PM

HI TO ALL!!!..ANYONE THERE WHO CAN HELP ME IN REFERRING A MID-RISE RESIDENTIAL BUILDING CONSULTANT???I NEED ASAP,,,I CANNOT AFFORD THE FEE THAT THE WELL KNOWN FIRMS NAY CHARGE ME,,SO I NEED THOSE THAT ARE COMPETITIVE AND REASONABLE SINCE I AM ALSO AN ARCHITECT...THIS IS JUST TOO MUCH FOR ME TO HANDLE...WHO KNOWS THEY CAN BE MY BUSINESS PARTNERS...

D_Trump

April 12th, 2009, 09:12 AM

I think Paul B's spreadsheet above has some error in rental income stream assumption.
Yr1 = 32,000/mo(384,000/12), Yr2=66,280/mo(792,960/12) which is 106% from year 1, Yr3 = 102,375/mo which is 55% from year 2.... and etc... i don't thinkit's a realistic assumption.

3cr

April 12th, 2009, 10:03 AM

U.S. unemployment rate may reach 10 percent, labor market expert warns
by Xinhua writer Hu Guangyao
April 10, 2009
http://balita.ph/2009/04/10/us-unemployment-rate-may-reach-10-percent-labor-market-expert-warns/

CHICAGO — The U.S. unemployment will continue to get worse and the rate of unemployment may reach 10 percent by the end of this year, a U.S. labor market expert has predicted.

In an exclusive interview with Xinhua this week in downtown Chicago, John A. Challenger, Chief Executive Officer of the Challenger, Gray and Christmas Inc., said: "We haven't seen unemployment rate at this level in 25 years and it looks like the rate will continue to get worse before it gets better, so we may see an unemployment rate of 10 percent this year."

Founded in the early 1960s, Challenger, Gray & Christmas Inc. is one of the oldest and premier outplacement consulting firms in the United States. Its primary goal is to help displaced workers make the transition to reemployment.

"There is another number called under-unemployment, under- unemployment includes also people who are looking for a job for the last year rather than last month and they are not counted in the unemployment rate," said Challenger.

Asked about the under-unemployment rate, he said: "There are also people who are working in part time jobs and for economic reasons, they will prefer a full time job, but they could only find part time jobs, so the under-unemployment rate is around 15 percent."

According to a report by the U.S. Labor Department , the unemployment rate in the United States rose to 8.5 percent, the highest level since late 1983, as employers slashed 663,000 jobs in March.

Asked who are suffering most from the rising unemployment, Challenger said: "It does seem that the people of the least education suffered most."

"The jobless rate for the people with college education is less than half of what it was for the population as a whole, so each level down in education means more hardships," he added.

Asked when the job market will start to recover, Challenger said: "Always after a recession, there is a period of jobless recovery."

"Companies are slow to start creating jobs, because they worried that business might turn down again, so they become very cautious about hiring at the beginning period after the recession ends," he explained.

He also warned that the United States must be very careful about losing labor flexibility in dealing with the current economic crisis.

"The U.S. labor market is well integrated with free trade, if the U.S. becomes scared of labor flexibility and closes borders to U.S. businesses, that would be damaging U.S. labor flexibility that makes U.S. economy strong," he said.

3cr

April 12th, 2009, 10:15 AM

Channeling remittances to spur economic growth (Part 2)
By LEE C. CHIPONGIAN
April 10, 2009
Manila Bulletin

Global fund transfers in 2008 were estimated to have reached $305 billion, so significant that the discussion and research exchanged during the central bank hosted event was considered very timely since countries, including the Philippines, have been developing strategic policies to make sure remittances have more of an impact in the GDP tally especially now that there is some urgency in this since, according to the World Bank, remittance flows will slow down this year.

This was the second time that the central bank hosted this event and the first one was with the Bank for International Settlements. This year’s theme, which was “The Macroeconomic Consequences of Remittances: Implications for Monetary and Financial Policies in Asia ” focused on the trends among emerging economies over the past decade as far as remittance policies are concerned.

The participants of the conference attempted to answer the question of how to harness remittance flows so that it could be more significant and permanent as a growth driver.

According to Ratha, remittances as a share of GDP are expected to fall this year and in 2010, but the economist qualified that the decline will not be the same extent as private flows or official development assistance funds. “Migration flows from developing countries may slow as a result of the global growth slowdown, but the stock of international migrants is unlikely to decrease,” said Ratha.

Remittances' still on the positive

The BSP and the rest of the world central bankers have an ongoing debate on the “pro-cyclicality” of remittance flows. In the case of the Philippines , unlike in other countries such as India which has heavy reliance on remittances as well.

Tetangco said the effect of remittances is not countercyclical but is instead procyclical. This means remittances can go their own way seemingly undistracted or unaffected by foreign exchange trend or business cycles. Its procyclical trends bode well for households that depend on remittances, especially in a volatile exchange rate market.

And then there is the issue of whether remittances are creating a nation of unproductive citizens who are content to just laze around waiting their monthly fund transfers.

In a 2007 study, the BSP said there is no evidence of “Dutch disease” despite government’s tendency to depend on these remittance flows.

According to a BSP paper “Philippine Overseas Workers and Migrants’ Remittances: The Dutch Disease Question and the Cyclicality Issue,” while remittances play a significant role in the economy, there is still “no strong evidence to suggest that remittances have led to a Dutch disease phenomenon.”

Dutch disease, which describes the deterioration of the manufacturing sector in the Netherlands in the 1970s due to strong reliance on natural gas production, is an economic theory that explains that de-industrialization of a nation because of its dependency on other revenue sources, specifically, foreign exchange inflows.

According to the BSP paper, this has not happened to the Philippines yet, despite that remittances have become the second largest source of foreign exchange for the Philippines , after exports.

As for the other issue of the remittances’ impact on the exchange rate, the study said it “finds evidence pointing to the procylicality of remittances.”

Cyclicality, as used in the paper, is defined as the correlation between the inflow and GDP.

Policy directions

The central bank's policy directions as far as remittances are concerned, has always been to answer the question of whether remittances can support consumption, especially now under these external financial conditions.

“Although remittance flows now constitute increasingly larger portions of recipient countries’ GDPs, these still cannot be readily counted upon to moderate ‘sharp’ fluctuations or swings in the economy or to hedge against macroeconomic shocks,” said Tetangco.

“Indeed policymakers would be wise not to be drawn into complacency that remittances can help the economy comfortably weather economic downturns.”

Last year, the services sector, which constituted nearly half of total GDP, grew by 4.9 percent. This translated to a 2.3 percentage-point contribution to the 4.6 percent GDP growth in 2008. Real estate led the growth in the services sector, owing to strong demand from the OFWs. However government consumption growth markedly fell, increasing only by 4.3 percent, lower than 2007’s 8.3 percent.

Guinigundo said the first step will hardly be realized unless there is a supportive policy environment that facilitates the flow of remittances through formal channels.

Aziza1121

April 12th, 2009, 02:59 PM

I noticed the above was your first post. Welcome to SSC, D_Trump!

3cr

April 13th, 2009, 02:40 PM

Economic cycle movements are about demand management
Rudy Romero
Daily Tribune
04/13/2009
http://www.tribune.net.ph/commentary/20090413com3.html

Around the world there is increasing frustration over the fact that the hundreds of billions of dollars being dispensed by governments to certain industries and institutions still haven’t stopped the world economy’s drift toward recession. Undoubtedly, the frustration appears to be greatest in the US, which has been the No. 1 dispenser of stimulus and bailout financing.

The frustration has been generated by the fact that no day passes by without news of fresh layoff, sales decline, factory shutdowns, operating losses and corporate bankruptcies. In the US, factory shutdowns are occurring with frightening frequency, and the rate of worker layoffs remains at around 500,000 to 600,000 per month. Operating losses are at levels that suggest operational unsustainability.

In attempting to arrive at an explanation for the perceived inefficacy of the financial measures that have been taken to combat the economic slowdown, perhaps the most rational approach is to review the pattern and direction of the approximately US $2 trillion worth of bailouts and fiscal stimuli that have been approved by the governments of the US and other major Western countries. In that manner one can arrive at a determination as to whether the programs have constituted the best strategy for dealing with the worst slowdown in the world economy’s post-World War II history.

The $803-billion bailout package approved by the US Congress in the waning days of the administration of George W. Bush was intended for the banking sector, with the objective of trying to get the flow of credit going again. The $785-billion stimulus package of the administration of Barack Obama had a Keynesian flavor to it and was intended largely for the public sector, with infrastructure and health care projects together receiving the lion’s share. Since then the Obama administration has approved bailout loans for the US car industry totaling close to $60 billion.

Financial assistance programs usually take time to produce the desired results, and, given the extraordinary circumstances in which they are being undertaken, the US government’s bailout and fiscal stimuli are bound to take time to achieve their objective, which, for the immediate future is the cessation of the downturn of the US economy. But that having been said, there nonetheless is reasonable basis for asking why the slide appears to be continuing.

The issues that need to be addressed in this regard relate to the choice of beneficiaries for the initial resuscitational efforts of the US Treasury. Were the US chosen beneficiaries the right choices from the standpoint of economic strategy? And if they were not the right choices, to which sectors of the US economy should the initial bursts of government assistance have been directed instead?

There are many observers within and outside the economic profession who believe the decision to bailout the commercial and investment banks first was strategically wrong from the standpoint of economic strategy. I concur in that judgment.

The current crisis came into being principally because the numerous sub-prime borrowers to whom the banks lent money or for whom they packaged clever loan instruments, for home-financing purposes now found themselves unable to keep up their mortgage payments. The US government chose to bailout the bad lenders rather than the bad borrowers. The bad borrowers it chose to allow to fall through the cracks. I think that it chose wrongly.

For one thing, the US Treasury did violence to two concepts that are vital to good management of the business cycle. The concepts are protection of aggregate demand and maintenance of confidence. In bringing about the near collapse of one of America’s key industries — through the cessation of lending and through foreclosures — George Bush’s Treasury Chief Henry Paulson set in train an avalanche of sales losses, plant closings, employment cuts and income declines that brought about a sharp decline in America’s aggregate demand. The movement in the gross domestic product (GDP) of the world’s No. 1 economy has turned negative in 2009.

The cornerstone of the theory and practice of business-cycle management is the C word — confidence. Confidence, in economics, as in other fields of human endeavor, is a fragile flower with frail petals and when news of trouble in a major sector begins to spread, disaster in the rest of the economy is not far behind. An input-output study (inter-industry relations matrix) for almost any country shows how housing demand is central to the demand for the products of a large number of manufacturing (steel, cement, timber and glass particularly) and retail industries.

What the US government should initially have done with the Toxic Assets Removal Program funds was to restore order in the home mortgage market by making funds available for preventing threatened foreclosures and even reversing foreclosures already undertaken. Since the souring of the sub-prime home mortgage market was the primal problem, there, logically, was where the federally funded solution needed to be applied.

Merely making available to the banks funds with which to take out their so-called toxic assets did not represent the pinpoint approach that was needed. True, the failing banks’ balance sheets underwent improvement, but the root problem was not addressed. The foreclosures of sub-prime mortgage loans continued apace, dragging down with them industries and activities associated with the housing sector.

Another flaw in the $803-billion bailout program for the banking industry — a flaw perceived by many observers within and outside the economic profession — has been the morality of throwing a lifeline to those who were responsible for the packaging of all those high-risk loans and not one to those who have been, and continue to be, dispossessed of their homes as a result of availment of the loans. In the opinion of the observers, which I share completely, the bailout program as structures appear to be a reward for the making of unsound banking decisions. The current situation smacks more, in the observers’ collective view, of toxic bankers than toxic assets.

Back to the requisites of effective business-cycle management.

The real tragedy in the current economic recession, as in past ones, is that the downward movement of aggregate demand was not stopped dead in its tracks by resolute and pragmatic government action. Like an avalanche, once a snowball starts moving, there is no stopping its gradual enlargement. A recessionary snowball gathering strength: That is what has been happening — better yet, has been allowed to happen — in 2008 to 2009.

As demand for goods and services has been declining industry by industry, confidence, the C word, has been allowed to wane. The hour has come, late though it be, to put an end to the economic rot. Fresh plant closures and workforce cuts, with their deleterious effects on purchasing power, must be anticipated and averted. When that is done, the process of confidence restoration will have begun.

3cr

April 14th, 2009, 04:21 AM

Peso seen to weaken to 52:$1
By Des Ferriols
April 14, 2009
PhilStar

MANILA, Philippines - The peso could weaken to as low as 52 to $1 this year as a result of the slowdown in foreign exchange inflows from overseas Filipinos (OFWs) as well as the decline in interest rates.

Hong Kong-based brokerage and investment group CLSA Asia-Pacific Markets said in its second quarter 2009 outlook entitled “Eye on Asian Economies,” that the peso could drop to as low as 52:$1 by the end of this year despite the country’s current account surplus.

“We expect that slowing growth will combine with slowing remittance flows and falling interest to bear down on the peso,” CLSA said.

According to CLSA, the country’s current account surplus could also drop to $6.1 billion or 3.8 percent of gross domestic product (GDP) this year and to $5.1 billion or 3.2 percent of GDP in 2010 from $7.6 billion or 4.6 percent of GDP last year.

“We expect the current account surplus to narrow over this year and next,” CLSA said.

The weakness of the peso is widely expected, however. The Bangko Sentral ng Pilipinas (BSP) had already revised its foreign exchange rate assumption to 46 to 49 to $1 from the previous assumption of 45 to 48 to a dollar.

According to CLSA, it is also expecting consumption to slow down to four percent this year and to two percent next year from 4.5 percent in 2008 mainly due to the decline in remittances from overseas Filipinos.

“Remittance inflows, a key driver of consumption spending in the current business cycle, are slowing,” CLSA said. “Slowing remittance inflows coupled with deteriorating job market prospects and consumer sentiment leaves us forecasting that real spending will slow again this year to four percent.”

On the other hand, CLSA said it is projecting an 11.7- percent increase in government spending this year as a result of the Arroyo administration’s economic stimulus package.

Government spending, CLSA said would be accompanied by a sharp rise in the budget deficit that is expected to swell to 2.7 percent of GDP this year from 0.9 percent last year.

Inflation, on the other hand, is projected to ease to 5.7 percent this year and 4.9 percent next year from 9.3 percent while the yield of the 91-day Treasury bills would decline to four percent from 5.9 percent.

In all, CLSA said it expected the GDP to grow only by 0.8 percent this year and by 0.7 percent next year from 4.6 percent last year due to the global economic slowdown.

“Our below consensus view reflects our bearish global view,” the investment bank said.

__________________________________________

10-20% remittance dip seen
Written by Erik de la Cruz
Business Mirror
http://www.businessmirror.com.ph/home/top-news/8825-10-20-remittance-dip-seen-.html

GIVEN the severity of the global economic downturn, remittances from overseas Filipino workers (OFWs) may fall by 10 percent to 20 percent this year even if many of them are in recession-proof sectors and in countries that are unlikely to plunge into recession, according to Moody’s Investors Service.

“Compared with the government, we are more pessimistic on OFW inflows this year,” said Thomas Byrne, Moody’s senior vice president and regional credit officer.

Moody’s forecast was more grim compared with the World Bank’s projection of a 4-percent drop in remittances this year.

The Bangko Sentral ng Pilippinas (BSP) recently said remittances this year might still match the $16.4-billion inflow seen last year, noting the double-digit growth in the number of deployed OFWs in January that it expects should add to the base of potential remitters.

Latest BSP data showed growth in remittances decelerated to 0.1 percent in January, but the figure was still above the $1-billion mark. The increase was modest due to the slowdown in deployment in November, followed by a contraction in December, and the reported displacement of some land-based workers.

Growth in remittances, a key pillar of the Philippine economy since it helps boost private consumption that accounts for almost 70 percent of the gross domestic product (GDP), has slowed since November.

Despite the slowdown, banks expect the amount of money to be sent home to remain substantial, and some of them appear to be in a rush to get more remittance partners here and abroad to boost—or at least maintain—their market share during a time of recession.

“The diversity in the skills and geographical location of workers would buffer such remittances from regional economic recessions, but not from a global recession,” says a Moody’s report authored by Byrne. “In 2001, when the recession was limited to the US, OFW remittances fell only very slightly, 0.3 percent, but that downturn was not global, or as severe as the current one.”

Moody’s noted, however, the shift in the composition of OFWs toward higher-skilled and higher-paid jobs, such as those in the health-care industry. This should help cushion the “inevitable downturn” in remittances from the global recession.

Given its pessimistic outlook for remittances and a “sharp” decline in investment and exports, the debt watchdog expects the Philippine economy to grow 2.0 percent this year, lower than government forecasts of 3.7-4.4 percent.

It said exports will likely fall between 20 and 30 percent this year, but the country’s current account will remain in surplus in 2009 and 2010—somewhere around 1 percent of GDP—extending a string of surpluses since 2003.

The strong 13.7-percent growth in remittances last year, which accounted for 20 percent of current account receipts and about 10 percent of GDP, fortified the country’s external payments position, it said.

“Despite the slowdown, the Philippines’s growth performance will probably be better than most other countries in the Asia region, which are more heavily dependent on exports, with the exception of Indonesia, India, and Vietnam,” the Moody’s report says.

jbkayaker12

April 15th, 2009, 05:32 AM

Good news for Vegas even during these tough economic times.

-----

There is some light at the end of the tunnel for the Las Vegas housing market. Instead of seeing more homes go up for sale, valley residents are deciding to invest.

As time goes on, for sale signs may be harder to come by because more and more people are realizing it truly is a buyer's market. They're pushing their fears aside and are finally ready to take advantage of it.

For months all you saw was house after house with foreclosure signs out front. But now, after months of bad news, empty homes are finding new owners at a fast rate.

"I paid a lot less for it than somebody paid for it in 2005. It was about 40-percent less than what it sold for in 2005," said Jackie Burke.

Just like Burke, thousands of valley residents are in line to buy resale houses. It took only two months for Burke to look, find, and close on her new home, saying the bank was more than willing to cooperate.

But she wasn't alone. "I did put bids in on two other homes before I took this property and there was that issue where they had multiple offers to look at," she said.

Applied Analysis says during the first week of April, there were more than 10,000 Las Vegas homes in contracted status, just waiting to be closed on. That's double the number from the same time in 2008.

Debbie Vocum-Runyan with Fidelity National Title says they've seen an increase in their closings and foreclosures are the hot picks. "Definitely foreclosed homes. Two-thirds of every transaction that is closed on resale right now is a foreclosure," she said.

She says inventory is also down, which is a good sign of a shift in the housing market. "We are definitely in a buyers market. We are not in a seller's market yet, by any means, but when your inventory starts to go down, you are getting closer to a seller's market," she said.

And although thousands became victims of a bad housing market, new homeowners like Burke say the wait to buy paid off.

Applied Analysis expects this trend to continue during the next two months. This is usually the busy time for realtors as potential buyers tend to stop looking as aggressively during the hot summer months.

www.Lasvegasnow.com

RonnieR

April 15th, 2009, 08:03 AM

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSMAN11915520090415?rpc=401&

MANILA, April 15 (Reuters) - Ayala Land Inc (ALI.PS), the Philippines' largest property firm, said on Wednesday it has secured a 7-year loan worth 1 billion pesos ($21 million) from Landbank of the Philippines to fund capital spending this year.

"Proceeds from the facility will be used by the company for general corporate purposes, as well as financing its capital expenditure program," Ayala Land told the Philippine Stock Exchange.

State-run Landbank will be the sole lender and arranger of the floating rate notes to be issued by Ayala Land.

Ayala Land, a subsidiary of the country's oldest conglomerate Ayala Corp (AC.PS), lowered its capital spending by 8 percent to 17.4 billion pesos this year, with consumers expected to cut back on spending due to a slowing economy.

The company, a builder of residential communities, high-rise apartments, office buildings and upscale malls, has said much of its capital spending this year would fund the completion of ongoing real estate projects.

Ayala Land's net profit grew 9.6 percent in 2008 despite the economic slowdown. Its shares gained 3.57 percent to 5.8 pesos on Wednesday, outperforming the main index .PSI which slid 0.72 percent. ($1 = 47.78 Philippine pesos) (Reporting by Karen Lema; Editing by Muralikumar Anantharaman)

bustero

April 15th, 2009, 10:47 AM

So pataas na nga ba talaga ito o floor pa lang na baka matagaltagal pang umakyat ang values?

jbkayaker12

April 15th, 2009, 11:14 AM

^^^^With around 10,000 deals waiting to close just for the first week of April, it is definitely looking good for Vegas. The price and the mortgage interest rates are in their lowest not seen in a while so people are taking advantage of it. Add the fact that the government is giving back $8000.00 for first time homebuyers, the deal is just too hard to pass at the moment. As far as home values, I doubt it'll go up in value anytime soon at least not as fast as it did in years past. I dont mind and I'm not in a rush to sell.

tafftrader

April 16th, 2009, 05:52 AM

Thanks. I'm still not 100% sure about this shared development arrangement.

Lili

April 17th, 2009, 01:00 AM

I have a question. I have a titled property in Antipolo but there is no road there yet. I went to the Municipal Engineer's office before (in 2005) and they were able to give me the captured GPS image of the land. It's a good thing that it is not occupied yet.

Are there private land surveyors or engineers available to survey the land and establish its metes and bounds notwithstanding that there is no road there yet?

Who or what agency do I approach for this kind of service?

3cr

April 17th, 2009, 07:18 AM

Impact of global crisis may last until 2012–govt
By Darwin G. Amojelar, Reporter
Manila Times
http://www.manilatimes.net/national/2009/april/17/yehey/top_stories/20090417top5.html

The global financial crisis has forced Philippine economic managers to lower the country’s economic targets from 2009 until the end of President’s Gloria Arroyo’s term in 2010 and beyond.

The Development and Budget Coordinating Committee on Thursday cut the gross domestic product (GDP) forecast this year to between 3.1 percent and 4.1 percent from an earlier target in February ranging from 3.7 percent to 4.7 percent.

A proxy for economic output, GDP refers to the total value of goods and services produced in a country in a year.

Last year, the economy grew 4.6 percent and in 2007, 7.2 percent.

Dennis Arroyo, director of the National Economic and Development Authority’s (NEDA’s) national planning and policy staff, blamed the cut in economic growth on the much lower projections of exports and imports, flat growth in overseas Filipino workers remittances for 2009 (as announced by the central bank), and the decline in factory output by 19.9 percent in January this year.

The Asian Development Bank (ADB) cut the country’s GDP growth forecast by 2.5 percent this year, while the World Bank predicted only a 1.9-percent growth. The International Monetary Fund saw 2.25- percent growth.

Global crisis

Socioeconomic Planning Secretary Ralph Recto also blamed the cut in GDP forecasts on the threat of lower incomes from falling exports and layoffs here and abroad. He added that those trends are forcing people to spend less.

“That’s the main reason for the reduction, but like I said, it doesn’t mean we’re throwing [in] the towel,” he added. “We’re looking at these projections. There might still be a pleasant surprise. I think the lowest growth will be in the first quarter.”

For next year, the Development Budget Coordination Committee (DBCC) predicted GDP to expand between 4.3 percent and 5.3 percent, lower than a forecast in February of between 4.9 percent and 5.8 percent.

For 2011, the economy is predicted to grow between 5.5 percent and 6.4 percent, also down from February’s forecast of between 5.7 percent and 6.6 percent. In 2012, the economy is forecast to expand between 5.9 percent and 6.8 percent, also down from an earlier prediction of between 6.1 percent and 7 percent.

Higher jobless rate

Economists interviewed by The Manila Times said more Filipinos are poised to lose their jobs because of the slower than expected growth.

“Unemployment will worsen definitely because of the lower economic growth,” Benjamin Diokno, an economics professor at the University of the Philippines, told The Times.

A former member of the Estrada administration economic team, Diokno predicted the unemployment rate to rise in April to between 8 percent and 8.5 percent.

“Definitely a higher unemployment rate [will accompany slower growth],” Victor Abola, economist at the University of Asia and the Pacific, also told The Times. “The government intervention may not [be] sufficient to offset the lost employment in the private sector, particularly the export-oriented firms.”

He projected an unemployment rate this year of between 8 percent and 9 percent.

Abola said the government could only create between 400,000 and 500,000 jobs this year, missing by a wide margin its one million annual target. He added that more jobs would be generated by government and by private construction projects, as well as the business process-outsourcing sector.

The economic managers are projecting exports to contract between 15 percent and 13 percent, a sharper reduction from an earlier estimate of a drop of between 6 percent and 8 percent.

By 2010, exports are expected to grow between 5 percent and 7 percent, down from earlier estimate of between 8 percent and 10 percent. For 2011, exports are forecast to grow from 8 percent to 10 percent; and for 2012, from 10 percent to 12 percent.

Imports are likely to contract between 14 percent and 12 percent this year. Earlier, it was projected to fall between 8 percent and 10 percent. For 2010, imports are projected to expand from 10 percent to 12 percent; for 2011, from 12 percent to 14 percent; and 2012, from 14 percent to 16 percent.

borntrippy

April 17th, 2009, 01:59 PM

im getting a 40sq unit - which would essentially be turned over as a studio, but the idea is we modify it to be a 1 or 2 br ourselves. For me parang mas gusto ko rin ganun kasi pwede ko gawin yung exact arrangement of room/s and living area that works for me.

I checked costs and hindi naman ganun kamahal magpalagay ng walls, I think if it is the same floor area pero super laki ng difference ng price ok rin to get the studio and do the modifications yourself para ma dictate mo pa yung layout.

That is, kung pwede, and if you actually enjoy designing the layout yourself ..

bitoy

April 17th, 2009, 07:40 PM

borntrippy

April 17th, 2009, 08:02 PM

parang ok ang condo to live in on a daily basis, tapos may investment na lot sa mga places na mura pa lang pero magaapreciate naman...and pag nagkafam na, sell both to get a house in a good location =)

gusto ko rin yung idea na condo + inexpensive vacation home outside the city for weekends. ang sarap naman ng weekends kung ganun..

tonyboy

April 19th, 2009, 01:20 PM

jr_laverga

April 20th, 2009, 03:46 PM

^^ this is perfect! actually thats how I want to settle in the future..condo in the city(BGC) and house away from the city on weekeneds.(Quezon province). city life on weekdays, relaxation on weekends with my family :) :cheers:

3cr

April 22nd, 2009, 04:56 AM

House panel OK’s perks for REITs
Business World
http://www.bworldonline.com/BW042209/content.php?id=048

THE HOUSE ways and means committee has approved giving tax incentives to real estate investment trusts (REITs), a mechanism that will allow investors to co-own income-generating property.

Antique Rep. Exequiel B. Javier, committee chairman, said tax perks sought by the bill authored by Aurora Rep. Juan Edgardo M. Angara, were necessary to promote REITs.

Under the measure, a REIT be will exempted from the following taxes: corporate income tax, creditable withholding taxes of income payments; documentary stamp tax (DST) and creditable withholding tax on the transfer of real property; DST on the sale, barter, exchange or other disposition of listed investor securities though the stock exchange, including block sales or cross sales for five years; and the tax on initial public offering and secondary offering of securities.

REITs will have to pay the DST on the original issuance of investor securities; the stock transaction tax on the sale, barter, exchange or other disposition of securities through the stock market, including block sales or cross sales; the final tax of 10% on cash or property dividends.

Francis Ed. Lim, president of the Philippine Stock Exchange (PSE), said the bill has safeguards so that tax incentives would not be abused. "[The] apprehension is valid, but we already have put safeguards in place to avoid concentration of wealth in the hands of a few," he said during the committee’s meeting yesterday.

The bill states that to qualify as a public company, a REIT must have at least 1,000 shareholders.

Half of the stock should not be owned, directly or indirectly, by five persons or less and no person must beneficially own or control, directly or indirectly, more than 30% of the outstanding stock in a REIT.

The House bill requires a REIT to have a minimum paid-up capital of P1 billion, higher than the P100 million required under the Senate version earlier approved on second reading.

Finance Undersecretary Gil S. Beltran reiterated the Finance department’s opposition to the bill, saying that "even without incentives, the instrument would be attractive to investors."

3cr

April 22nd, 2009, 04:56 AM

portludlow

April 23rd, 2009, 05:19 AM

kakatakot and mag invest ngayon...... lahat na lang pababa, kahit saan ka lumingon walang pagkakakitaan.

I totally missed the equities rally since March 10 with the S&P gaining 25%. I was actually shorting financials and was forced to cover my positions.:ohno:
Emerging markets including the Philippines are also way up since the beginning of the year outperforming the developed markets by a mile. hmmmm late bloomer na decoupling ba yun.

People are scared....some economists who predicted this mess we are in are now talking about deflation. Look at whats happening in Europe like Spain, prices are dropping:nuts: sana wag naman. :)

3cr

April 23rd, 2009, 08:36 AM

Naku eto na ang mga tama/epekto ng global crisis sa Pinas... :ohno: :ohno: :ohno:

IMF downscales '09 economic growth for RP to zero, 7.1% decline in remittances
abs-cbnNEWS.com | 04/22/2009 9:44 PM

The International Monetary Fund (IMF) has further lowered its 2009 growth projections for the Philippine economy and remittances from overseas Filipino workers.

In its latest World Economic Outlook (WEO), the IMF has revised its gross domestic product (GDP) growth to zero after its 2.25 percent forecast made only in February. It cited the declining trade and slower consumer spending.

“The revision [in the Philippines’ growth outlook] reflected the prospect of a significant contraction in exports and imports and a weakened outlook for remittances, which we now anticipate to decline by 7.5 percent in 2009,” IMF resident representative Botman told reporters in a press conference late Wednesday.

Botman said the Philippines' trade performance will be dragged by slowing world trade. IMF projected global trade to decline by 1.25 perccecnt in 2009--the first decline since the Second World War and by far the deepest global recession since the Great Depression.

Philippine exports data showed it has been declining at double-digit pace for 5 consecutive months.

The international lender said the risks to the outlook for the region remained “tilted squarely to the downside,” adding that the key concern was a deeper and longer recession in advanced economies outside Asia.

Botman said the Philippines will post a modest but delayed recovery in 2010.

Remittances, too

The IMF is also expecting remittances to the Philippines to decline by 7.1 percent. Previously, it echoed the Philippine government's projections that last year's $16.4 billion will be maintained this year.

Remittances have previously been resilient despite previous crisis at home and, in 1997/98, in Asia. It allowed the Philippine economy to continue posting healthy growth levels since it fueled consumer consumption.

Botman said it expects consumption to grow slower by 2.7 percent as remittances decline.

Nonetheless, Botman said the increased government spending is likely to pick up the slack in remittances.

“The recent announcement to increase the deficit target to close to 3 percent of GDP is appropriate and provides an upside risk to our growth projections while not affecting investor confidence,” Botman said.

Debts

What concerns the IMF about the Philippines is its high level of debt that could be made worse by higher deficit spending and higher borrowing.

“Given the still-high level of public debt, there should be a measured fiscal stimulus to avoid compromising fiscal sustainability and policy credibility,” the IMF said in the report.

“To provide more scope for fiscal easing and outlays on well-targeted pro-poor cash transfers, [IMF] directors suggested raising the tax collection effort, broadening the tax base, and rationalizing tax incentives,” it added.

The government announced Wednesday that it is likely to borrow more overseas as first quarter budget deficit swelled to P120 billion, already nearing the entire year's official deficit target of P199.2 billion.

___________________________________

IMF’s worst forecast ever makes reforms urgent matter
Manila Times
http://www.manilatimes.net/national/2009/april/29/yehey/opinion/20090429opi1.html

THE Philippine economic outlook is getting direr by the month. Last week the International Monetary Fund (IMF) issued the worst forecast yet for the country. The world’s so-called lender of last resort said the Philippines would register no growth this year. If accurate, this would be the country’s worst economic performance in a decade.

Before the IMF, the World Bank also saw a sharp slowdown of less than 2 percent from last year’s 4.3 percent, which in turn was a significant drop from the three-decade record expansion of 7.3 percent.

It appears the Philippines has yet to break free from a boom-bust cycle that has hounded it for so long.

The last contraction happened in 1998, when the country’s gross domestic product shrank 0.8 percent as it joined other Asian nations in a regional currency crisis.

What mitigated that crisis was the surge in remittances, as overseas Filipino workers (OFWs) increased the amount they sent home.

No OFW remittance rescue anymore?

No such rescue appears forthcoming, as the current crisis is bigger in scale, hitting not only the Philippines’ export markets, but also OFW host-countries.

Indeed the dismal outlook for the Philippines stemmed from the feared contraction in remittances, which has fueled domestic consumer spending, the main driver of economic expansion.

A growing number of pundits see OFW money falling this year, the first time in a crisis year.

The country’s exports have been contracting for half a year, pushing up unemployment in the manufacturing sector.

Worse, the faster pace of decline in exports has widened the current account deficit.

Policymakers have understandably chosen to see the bright side, pointing to the local business process outsourcing (BPO) sector, which seems to be enjoying a run up as US and European multinational companies cut down costs by outsourcing jobs.

But the Philippines’ share of the global offshoring market has been paltry at less than 10 percent. It doesn’t look like the country could raise this share faster in the near term.

The Bangko Sentral ng Pilipinas (BSP) also has cited the country’s ample foreign exchange reserves, built up during the country’s recent yet short-lived economic expansion.

The problem is the worsening outlook for the global economy is putting pressure on governments—Malacañang included—to crank up public spending and prevent the world from sliding into another depression.

For the Philippines, the slowing economy has compounded an already challenged revenue effort, as dwindling incomes both at the corporate and household fronts would dampen tax collections.

In the first quarter, the government’s budget deficit more than doubled from last year, and exceeded this year’s ceiling.

We’ve just entered the second quarter and the fiscal gap is already more than half the full-year program. Besides higher spending, the Department of Finance (DOF) blamed the wider deficit.

Pressure on Finance department

The Finance department would then have to raise money fast, which is why it would schedule the sale of remaining state assets in the third quarter. We hope and pray these assets fetch big bucks. But unless new positive developments come, in the prevailing depressed market conditions the government could not demand a high price for these assets. We pray the government is not forced out of desperation to dispose of those assets at fire-sale prices.

Very wisely, perhaps realizing the bad timing for any asset-sale, the Finance department has also announced plans to return to the international debt market in the fourth quarter. It already completed this year’s foreign commercial borrowing program last January. Going back to the lender’s market when other countries are similarly seeking loans—and when everyone knows you’re desperate—would drive up the premium on any additional borrowing.

With that, we doubt whether our reserves would remain ample—and that is the crux of the matter.

We don’t see the country returning to the twin-deficit dilemma in the near term, but we’re slowly building the case for such a scenario.

Our challenge to the government is to not let up on its fiscal reform tack, even as it restructures the country’s incentives scheme to broaden our foreign exchange-earning capacity.

Nothing new here, but a reiteration of the need to make much-delayed economic reforms.

bustero

April 24th, 2009, 06:10 AM

^^ i think that's a bit on the extreme range, most do not predict no growth, from the ground it also surely does not seem that way

bulakeno

April 24th, 2009, 01:28 PM

^^
Originally Posted by 3cr
Kailangan talaga sariling sikap at hindi dapat umasa sa iba o irason ang global economy sa pagsama ng ating economy. Kung walang external demand then kailangan magkaroon ng internal demand for our goods and services. Isama na rin ang increased infra & agri spending for sustainability at bawasan na ang corruption na yan para naman magsurvive ang ating bansa. Yan dapat trabahuhin ng ating gobyerno ngayong may global crisis pangeconomiya. Of course we also have to do our share. Kailangan tayo maging mas masipag at mapursige

..at di maging tamad at mayabang (living beyond our means)...
:bow:^^

In terms of investing in Real Estate, we should really live below our means, instead of living beyond our means.

Hmmmm, maybe this calls for a separate thread.

why don't you? the worse thing that can happen is your thread being deleted by that kind gentleman ....very nice and understanding mod kimber. :cheers:

Hmmmmm. Pero si TC ang mod dito. Mas stricto yata sya. He does have the weird propensity to change the thread title 2-3X . Perhaps I will ask him first. I know he can always delete or transfer the thread, or worse even ban me. :ohno:

Okay..I'll give it a try.:)

bulakeno

April 24th, 2009, 02:22 PM

Inspired by 3CR and Tonyboy, I honestly believe that this thread is very relevant for all of us in this time of global economic crisis.

For what is every Filipino's (Fil-American, OCW/OFW or from where else) dream? Is it not to buy a vacation/retirement home in the Philippines? Of course it is!

Ten years ago, our family had a serious get-together. We decided to invest in a 600 square meter property that our parents bought in San Jose del Monte, Bulacan.

Because two of my siblings got laid off, I bought their 1/7th shares to help them out, with my promise that they can have them back when they can afford to. Our youngest, single and smartest brother went to Brazil to try his luck. The other, next to the youngest sister and her husband migrated to New Zealand. :ohno:

The common denominator for my young two siblings was: they didn't have emergency plans. They didn't have the foresight of saving for "the rainy day." They unfortunately did not live beneath their means.
:ohno:

bulakeno

April 24th, 2009, 02:28 PM

hehehe...i dunno what you learned from me..but i agree that i have considerably learned a lot more from you :master: (your timely news updates/living beneath our means/ re diversification) and the insightful posts of port, peter, susan/ocdiva (revocable living trust (http://www.wsba.org/media/publications/pamphlets/revocable.htm)), therick, rene, bulakeno, lili, terman, jb, marites' mayan calendar (http://www.adishakti.org/mayan_end_times_prophecy_12-21-2012.htm),

Thanks for listing me. ^^ I'm flattered. But as I recall, I posted mostly questions.

BTW, what's with the Mayan Calendar???

bulakeno

April 24th, 2009, 02:54 PM

I once started a DIY thread here in Pinoy SSC but I cannot find it anymore. :ohno: Maybe, one of the mods deleted it! :nuts:

Since the recession, many of my neighbors have been doing chores around their homes by themselves. For example, lawn mowing, landscaping, tree pruning, etc. :banana:

I call this being smart and frugal! :lol:

Lili

April 24th, 2009, 03:17 PM

Nice thread @bulakeno. I'll think up of ways. :)

bartman

April 24th, 2009, 03:26 PM

bulakeno

April 24th, 2009, 03:49 PM

Nice thread @bulakeno. I'll think up of ways. :)

Thanks lili! :)

I have two relatives working in Manhattan, NY and in Atlantic City, NJ presently renting their apartments. Their dream is to own a place they can call their own. Surely, they can learn from you how you did it! :master:

bulakeno

April 24th, 2009, 04:11 PM

most of us who have bought properties are aware and already do this. it's precisely the reason we've been able to put some money away. and it's not just about our philippine properties; prudence also needs to be exercised to keep our primary residences, especially those in the US whose home values have gone down several hundreds of thousands of dollars while still managing the same mortgage payments.
^^
:righton: @bartman!

Surprisingly, my two siblings :ohno: weren't aware or fully understood this! They totally ignored, :bash: your advice (despite our parents' mantra of prudence/frugality). Unfortunately, they were into conspicuous consumption (http://en.wikipedia.org/wiki/Conspicuous_consumption) NOW not later.

tonyboy

April 24th, 2009, 09:12 PM

By Mark Pittman http://media.linkedin.com/mpr/mpr/shrink_80_80/p/1/000/002/02b/0250910.jpg

April 24 (Bloomberg) -- The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed.

In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer.

The losses on securities backed by assets such as home loans in Florida and California signal that U.S. taxpayers may be forced to reimburse the central bank through the Troubled Asset Relief Program, according to Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics.

“The numbers basically confirm that Treasury is going to have to take some TARP money and reimburse the Fed,” said Whalen, whose financial-services research company analyzes banks for investors. “It is essentially up to the Treasury to get the Fed out of this.”

The central bank :bash: lent $2 trillion to financial institutions and hasn’t disclosed information about most of the collateral backing those loans.

Treasury spokesman Andrew Williams declined to comment.

The Fed report follows requests from lawmakers to identify the collateral and a lawsuit by Bloomberg News. Fed Chairman Ben S. Bernanke pledged to expand disclosure, assigning Vice Chairman Donald Kohn to lead the effort.

The central bank has refused to name the borrowers, the amounts of loans or the assets banks put up as collateral under most of its programs, arguing that doing so might set off a run by depositors and unsettle shareholders. That would be less of a concern for New York-based AIG, now 80 percent owned by the federal government, and Bear Stearns, taken over by New York- based JPMorgan Chase & Co. a year ago.

Bloomberg, the New York-based company majority-owned by New York Mayor Michael Bloomberg, sued Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit. The public is an “involuntary investor” in the nation’s banks, according to an April 15 court filing by Bloomberg.

In the report, the Fed detailed its assets in three limited liability corporations, all called Maiden Lane, after a street in Lower Manhattan that runs past the New York Fed.

The $9.6 billion in losses are unrealized because they represent the difference between the fair value of the security under accounting rules and the amount outstanding. The losses become real if the principal isn’t returned.

Maiden Lane I is a $25.7 billion portfolio of Bear Stearns securities related to commercial and residential mortgages. JPMorgan refused to buy them when it acquired Bear Stearns to avert the firm’s bankruptcy.

The Fed’s losses included writing down the value of commercial-mortgage holdings by 28 percent to $5.6 billion and residential loans by 38 percent to $937 million as of Dec. 31, the central bank said. Properties in California and Florida accounted for 45 percent of outstanding principal of the residential mortgages.

AIG Counterparties

Maiden Lane II contains almost $11 billion of outstanding subprime mortgage-backed securities from the AIG transaction that the Fed said lost $180 million so far. The fund also contains $6.2 billion of Alt/A adjustable-rate mortgage-backed securities that the report said has $936 million of unrealized losses. The Fed values $11.4 billion of assets in Maiden Lane II with mathematical modeling, the same methods used by banks and AIG itself.

About 19 percent of the mortgage-backed securities are rated speculative grade, or BB+ at Standard & Poor’s, according to the Fed. About 40 percent are given the top rating of AAA.

Maiden Lane III has lost $2.6 billion after being created Oct. 31 to buy collateralized debt obligations from AIG counterparties, according to the Fed. CDOs in this unit include three parts of a high-grade asset-backed security known as TRIAX 2006-2A, totaling about $3.2 billion. Maiden Lane III also has two parts of a commercial mortgage-backed CDO called MAX 2007-1 A-1 with a face value totaling $7.5 billion. The fair value of those two is less than half that much, or $3.3 billion, according to the central bank.

A third of the amount outstanding in the Maiden Lane III CDOs are speculative grade, or deemed by ratings companies as having a greater chance of default. Another 27 percent are rated AA+ to AA-, the second-highest tier of S&P’s scale, the Fed said in its report. All but $155 million of the $26.8 billion in CDOs are classified as Level 3 assets, or those valued with mathematical models instead of market prices.

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

Last Updated: April 24, 2009 09:48 EDT

source: http://www.bloomberg.com/apps/news?pid=20601015&sid=aP2XyOHiRSGI#

Lili

April 24th, 2009, 09:20 PM

Thanks lili! :)

I have two relatives working in Manhattan, NY and in Atlantic City, NJ presently renting their apartments. Their dream is to own a place they can call their own. Surely, they can learn from you how you did it! :master:

Renting in Manhattan is way too expensive. If they have enough money to put in for downpayment, their credit is good and have relatively stable jobs, I would suggest that they buy property instead of renting. It is a buyers' market now since property prices are going down. There are thriving places in the outer boroughs that are very promising. A lot of hipsters are going there and buying. Prices in New Jersey are good, too, and there are places in New Jersey that are near Manhattan that offer condos that are high-end looking, Manhattan-quality and they are the ones benefitting from the majestic view of the NYC skyline.

Believe me, I had my days of conspicuous consumption, too. You know -- spas, travels, recreation, latest gadgetry, books... etc. Even my Philippine condo investment now seems to be a conspicuous consumption. Sometimes, we just want to reward ourselves for hard work. But this time, the lesson learned is for austerity and back to simplicity.

tonyboy

April 25th, 2009, 02:43 PM

tonyboy

April 25th, 2009, 02:58 PM

Thanks for listing me. ^^ I'm flattered. But as I recall, I posted mostly questions.

BTW, what's with the Mayan Calendar???

methinks..marites was just being provocatively cute...imho..she basically said that we all should not worry so much about this present big subprime slimy mess :bash: we are in .....because come dec 2012..the whole world will end...:lol:

remember .....you also advised me not to rant too much in this thread..hehehe:cheers:

twinstar633

April 26th, 2009, 03:56 AM

^^
One practical consideration is the amount of floor area you can afford in deciding between a loft and a flat. Loft requires additional space for the staircase. While this may sound insignificant, the fact that most condos nowadays are below 100sqm means every square meter counts.

e.g. in a typical condo configuration of today- a loft of 80-90sqm will likely give you a 2BR with no utility room provision while the same flat size would typical deliver a maid's quarter and a roomier living/dining area. Same consideration applies to a 1BR. When you have a total floor area of 50-70sqm, you will have to decide whether you are happy allotting ~20% of that to a staircase.

Of course, ultimately it boils down to individual preference/priority.

3cr

April 26th, 2009, 03:19 PM

^^ Wow Thank You for the compliments. As I've said before, the good thing about this forum is we get to learn from one another's experiences. And since life is a continuing work in progress and I'm no spring chicken anymore, let's just say I've learned my lessons well going through my own life's experiences, especially the hard ones, and am just sharing some of the insights learned from these life lessons in the forum threads. Really happy and honored if as a result of these postings, I am also able to be of some inspiration to other members here in the process. Thanks again and God Bless! :)

bustero

April 27th, 2009, 05:29 AM

Do you mean "Beneath your means" or "within your means" ? How do you distinguish the two?

bustero

April 27th, 2009, 05:34 AM

Lofts are popular here because from the buyer side even their small units look much bigger and brighter and from the developer side, it's cheaper to add space that way.

3cr

April 27th, 2009, 05:37 AM

I would think mas magastos sa cooling/airconditioning ang mga loft units especially when they have floor to ceiling windows and
facing the afternoon sun. Mahal pa naman ang electricity sa Pinas. I also agree that the stairs eat much valuable sq. footage.

3cr

April 27th, 2009, 05:45 AM

Or maybe "not living beyond your means"?

Zodiac18

April 27th, 2009, 02:58 PM

Thanks for starting this thread, Bulakeno! We are right now starting seriously to down-size! :ohno:

As far as I know "within your means" and "not living beyond your means" have the same meaning. It's easier thing to accomplish. As Bartman has written - most of us

..are aware and already do this. it's precisely the reason we've been able to put some money away. and it's not just about our philippine properties; prudence also needs to be exercised to keep our primary residences, especially those in the US whose home values have gone down several hundreds of thousands of dollars while still managing the same mortgage payments.

Do you mean "Beneath your means" or "within your means" ? How do you distinguish the two?

Or maybe "not living beyond your means"?

How do I to tell the difference?

"Beneath your means" IMHO, means one step further - a much harder thing to do.

I started a thread in our local forum wherein I complained about how I and my neighbors were being taxed higher and higher on our real estate properties while our property values are getting lower and lower. I personally wrote a complaint letter to our local comptroller's office last year but todate, I haven't received any reply! :ohno:

For example:

We want to sell our present home with an acre lot to downsize to a humble condo which is cheaper to maintain but nobody is buying. In our neighborhood, there are many houses for sale but it seems those signs have been there for months. And more homes seem to be sprouting up - with them for sale signs. :nuts:

Given a choice, my wife and I would rather keep our real estate investment in the Philippines as primary retirement place and have the condo here as a secondary residence. To achieve this goal, my wife and I believe that the only recourse is to tighten our belts more and really, really live way below our means - not just within our budget.

bartman

April 27th, 2009, 03:18 PM

beneath, below, within... i suppose we all know what bulakeno meant; let's not split hairs :)

Lili

April 27th, 2009, 07:12 PM

Or maybe "not living beyond your means"?

^^ I think that is more apropos. But for those who would like to scrimp and save in these uncertain times, it would be living "beneath your means".

3cr

April 29th, 2009, 11:11 AM

terman1718

April 29th, 2009, 04:31 PM

Philippine Real Estate Attracting Investors
http://www.realestatephilippinesblog.com/philippine-real-estate-attracting-investors/

Filipino investors reluctant to put their money in financial instruments are instead investing in Real Estate Philippines, according to Philippine Daily Inquirer article that came out this Monday (click here for the article).

The statement comes from Eton Properties president Danilo Ignacio, who added that confidence in the property sector had bounced back in the first quarter. As proof of this, Eton Properties posted a very encouraging p400 million in sales during this past quarter, which was higher than the 3rd and 4th quarter of 2008.

Mr. Ignacio has attributed the strength of this quarter’s sales to the fact that Philippine Property prices have held up well despite the times, unlike other portfolio instruments which have lost money recently like stocks and derivatives. In fact, he says, Eton was even able to increase prices by “suppressing the supply” of properties, just like what other developers did.

Also, there was an increase in the number of buyers willing to give a higher cash down payment for their property purchases, and so they get higher discounts as an incentive for these higher downpayments. I believe this is so because investors are simply transferring their money from losing investments to more lucrative ones, making sure that their money still works and earns for them.

It looks like that previous articles I posted (click here to read related article) have proven to be true – that Real Estate Philippines is indeed a safe and resilient investment in these trying times. Indeed, even if the Philippine economy would slow down to 1-3 percent, this is still better than other countries since they are experiencing negative growth or recession.

Because of this, Eton Properties has launched new projects slowly but surely. First, they launched West Wing Residences in North Belton Novaliches Q.C. and the One Archers West Tower in DLSU Taft (click here). Now, they are planning to open an 8.6-hectare subdivision project in San Bartolome, Fairview, Quezon City. They also plan to release the 20-hectare third phase of Eton City, a 1000-hectare township development in Sta. Rosa, Laguna.

So, for those investors who still don’t know where to put their hard earned money, it’s time to put it into Real Estate Philippines. Inquire and earn now!

portludlow

April 30th, 2009, 03:41 AM

bulakeno

April 30th, 2009, 02:48 PM

Thanks for starting this thread, Bulakeno! We are right now starting seriously to down-size! :ohno:

As far as I know "within your means" and "not living beyond your means" have the same meaning. It's easier thing to accomplish. As Bartman has written - most of us

How do I to tell the difference?

"Beneath your means" IMHO, means one step further - a much harder thing to do.

I started a thread in our local forum wherein I complained about how I and my neighbors were being taxed higher and higher on our real estate properties while our property values are getting lower and lower. I personally wrote a complaint letter to our local comptroller's office last year but todate, I haven't received any reply! :ohno:

For example:

We want to sell our present home with an acre lot to downsize to a humble condo which is cheaper to maintain but nobody is buying. In our neighborhood, there are many houses for sale but it seems those signs have been there for months. And more homes seem to be sprouting up - with them for sale signs. :nuts:

Given a choice, my wife and I would rather keep our real estate investment in the Philippines as primary retirement place and have the condo here as a secondary residence. To achieve this goal, my wife and I believe that the only recourse is to tighten our belts more and really, really live way below our means - not just within our budget.

You're very welcome, Zodiac18! :) I like your examples! To me they seem to clarify more the definitions/semantics which appear to be a bone of contention here.

Allow me to suggest that the original thread title remain the same. I'm basing this on the posts of Lili, Portludlow and Zodiac.

With due respect to our friends (Peter/Bustero and Bartman) who don't know the difference because in my opinion they both already are prudently successful in maintaining their primary and secondary residences here and/or abroad, with little or no effort at all. It's second nature to them!

Whereas to the rest of us, we really have to struggle hard during this trying times - for me - harder than most.

bulakeno

April 30th, 2009, 02:54 PM

Renting in Manhattan is way too expensive. If they have enough money to put in for downpayment, their credit is good and have relatively stable jobs, I would suggest that they buy property instead of renting. It is a buyers' market now since property prices are going down. There are thriving places in the outer boroughs that are very promising. A lot of hipsters are going there and buying. Prices in New Jersey are good, too, and there are places in New Jersey that are near Manhattan that offer condos that are high-end looking, Manhattan-quality and they are the ones benefitting from the majestic view of the NYC skyline.

Believe me, I had my days of conspicuous consumption, too. You know -- spas, travels, recreation, latest gadgetry, books... etc. Even my Philippine condo investment now seems to be a conspicuous consumption. Sometimes, we just want to reward ourselves for hard work. But this time, the lesson learned is for austerity and back to simplicity.

As usual, your post is very insightful, Lili! :)

My close relative had no choice as to where to live and work. Manhattan was the only place she could find employment. She is a hard worker. She shares the rental cost of her humble apartment with two other co-workers.

bulakeno

April 30th, 2009, 03:04 PM

Question... when one actually has just enough finance to cover all expenses in full (and not just min. payment in credit cards for example which incurs interest) for a given time period, say every month, does that qualify as living within means? Just wondering what "living within means" is to others... :)

Just that I think we need to first establish a general baseline understanding of what "living within means" is in order to be able to intelligently discuss what constitutes "living beneath our means" and how to be able to achieve this goal during this very trying economic times we are currently in.

Personally, I believe that using a credit card and not paying the whole balance in full each month is living beyond my means. According to Suze Ormand, it's not prudent to carry a 10-20% APR interest for non-essential expenses. :ohno:

Credit cards should always be used for only convenience, e.g., on-line purchases, buy bus/plane tickets to earn travel miles, when cash is not readily on hand, etc.

bulakeno

April 30th, 2009, 03:14 PM

^^ i think thats what you call living on a prayer errrr.....paycheck to paycheck. :)

conventional wisdom is that you must have six months of emergency living expenses and save at least 20% of your income for the rainy days.

in todays current financial crises there are new paradigm emerging and myths that were dispelled. saving to buy and hold equities and real estate always goes up mantra were shattered. :ohno: in those situations would you rather enjoyed the fruits of your labor than save and invest in the casino called wall street? life is short. people are really at a loss on what to do. :lol: i guess diversification is the key.

Thanks Portludlow! In my book, the usual conventional wisdom of six months emergency cash is living within my means. My budget calls for putting (plano pa lang) money in CDs every month.

In the past, the terms scrimping/being kuripot used to have negative connotations. Now, it's the accepted norm for prudent frugal savers. :ohno:

bartman

May 2nd, 2009, 02:37 AM

beneath, below, within... i suppose we all know what bulakeno meant; let's not split hairs :)

With due respect to our friends (Peter/Bustero and Bartman) who don't know the difference ...

sows akala ko pa naman naiintindihan ko, hindi pala (daw)!!! :nuts:

tonyboy

May 2nd, 2009, 04:26 PM

You're very welcome, Zodiac18! :) I like your examples! To me they seem to clarify more the definitions/semantics which appear to be a bone of contention here.

Allow me to suggest that the original thread title remain the same. I'm basing this on the posts of Lili, Portludlow and Zodiac.

With due respect to our friends (Peter/Bustero and Bartman) :bow: who don't know the difference because in my opinion they both already are prudently successful in maintaining their primary and secondary residences here and/or abroad, with little or no effort at all. It's second nature to them!

Whereas to the rest of us, we really have to struggle hard during this trying times - for me - harder than most.

:ohno:^^count me in as belonging to the rest of us....:nuts:

sirhc aziledrolf

May 4th, 2009, 05:01 AM

I read this from a Rich Dad Poor Dad book.

Based from the author, living below one's means is a poor advice. Poor people tend to reduce expenses during trying times. They usually give up comfortable living to save cost. But rich people do not do that, they still maintain their lifestyle but they usually increase their source of income. Increasing one's source of income is better than reducing expenses because it will make you better prepare when crisis hits again. You do not want to change your lifestyle every trying time.

TheRick

May 4th, 2009, 06:20 AM

Can't you do both?
Save and find ways to increase your source on income at the same time.

I think step 1 is to save money (reduce the expense) and the money you save could be used to increase your source of income.
Even if you do have the resource to increase your income, I still don't see any reason why you should not reduce your expenses.
Especially, If they are just wasteful expenses.

Isn't there a saying... "Its not how much you earn but its how much you save"

sirhc aziledrolf

May 4th, 2009, 06:37 AM

Lili

May 4th, 2009, 06:40 AM

sirhc aziledrolf

May 4th, 2009, 06:53 AM

FICO score? This is the credit standing score right? hmm i guess i should also check her book :)..

Lili

May 4th, 2009, 07:11 AM

^^ It may provide a good counterbalance to Robert Kiyosaki's book.

Kiyosaki is really into leveraging, creating passive income and significant risk-taking. In these uncertain times, one cannot undervalue the significance of risks in certain investment vehicles. So, you are right about investing wisely. But wise investment is dependent on careful study of investment vehicles, their performance, and ultimate outcome, which during these times, most people do not have control over. So, apart from doing one's homework and putting in the actual work, it is important to have that safety net.

TheRick

May 4th, 2009, 07:22 AM

^^ yes you are correct. But investing is also an expense, so you really didn't save but you spent your money wisely. But unlike other expenses this is not a liability but an asset.

So you see you did not save but spent.

As for the expenses, I used the term in it's general meaning.

True. But if you don't save (cutting wasteful expenses) you won't have anything to invest (unless you take out a loan).
By investing your saved money are actually increasing your asset (provided your investment yields good) hence you are saving.

TheRick

May 4th, 2009, 07:37 AM

Suze Orman espouses not buying anything beyond what you can afford, having emergency reserve funds and taking care of one's FICO score.

Guess who is the more in-demand author/ speaker and financial guru right now? Suze Orman or Robert Kiyosaki?

Who? (Joke) :lol:

Good point. Sound fundamentals is what you need especially in a slow economy like this.

Cash is King. Save and save until you find the right timing and right investment.

tonyboy

May 4th, 2009, 07:16 PM

I read this from a Rich Dad Poor Dad book.

Based from the author, living below one's means is a poor advice. :bash: Poor people tend to reduce expenses during trying times. They usually give up comfortable living to save cost. But rich people do not do that, they still maintain their lifestyle but they usually increase their source of income. Increasing one's source of income is better than reducing expenses because it will make you better prepare when crisis hits again. You do not want to change your lifestyle every trying time.

hi chris...correct me if i am wrong...you must have read this..
Why the Cheap Will Never Get Rich (http://finance.yahoo.com/expert/article/richricher/153515)...:nuts:..by rk....

btw...a nice well written article...the gist of which i don't buy..:ohno:..:cheers:

Lili

May 4th, 2009, 07:46 PM

Here's my take... never give up comfortable living. We need to have an abundant mentality for us to prosper more.

But one can give up extravagant living and ostentation. :)

So, it will depend on one's level of comfort. For me, simple abundance is good enough and occasional pampering is life's just rewards. :)

--SuperB0y--

May 4th, 2009, 07:55 PM

afterall, life is short. as they say, what you accumulate you can't bring in heaven. that's why living comfortable is very important. enjoy life, but just in moderation so that you could still save something for your retirement.

sirhc aziledrolf

May 5th, 2009, 04:35 AM

Nope, the title is: Increase Your Financial IQ

Because of the current time, Iam forced to read such books. Hahahaha

hi chris...correct me if i am wrong...you must have read this..
Why the Cheap Will Never Get Rich (http://finance.yahoo.com/expert/article/richricher/153515)...:nuts:..by rk....

btw...a nice well written article...the gist of which i don't buy..:ohno:..:cheers:

tonyboy

May 6th, 2009, 07:52 PM

Suze Orman espouses not buying anything beyond what you can afford, having emergency reserve funds and taking care of one's FICO score.

Guess who is the more in-demand author/ speaker and financial guru right now? Suze Orman or Robert Kiyosaki?
-----------------------------------------------^^
lemme guess...suze orman..... http://upload.wikimedia.org/wikipedia/en/thumb/4/46/Suze_Orman_Senate_Committee.jpg/225px- ....i base this on our family's tv viewing habits/history..only once did we see rk on public tv..on the other hand..suze seems to be everywhere all the time on the tube..pbs, cnn, cnbc..etc..:)

another thing..suze in 2008 was named as one of the most influential person in time magazine... (http://en.wikipedia.org/wiki/Suze_Orman):banana:

one last thing..my wife bought all of suze's books ever published...no one has even bought/borrowed from the library any of rk's book..:ohno:

a few negative comments...

Kiyosaki's books and teachings have been criticized for focusing on anecdotes and containing little in the way of concrete advice on how readers should proceed.[13] (http://en.wikipedia.org/wiki/Robert_Kiyosaki#cite_note-12) Kiyosaki responds that his material is meant to be more of a motivational tool to get readers thinking about money, rather than a step by step guide to wealth. He also says the books are supposed to be "interesting" to people, which precludes involving a lot of technical material.[14] (http://en.wikipedia.org/wiki/Robert_Kiyosaki#cite_note-13)

There is also disagreement over how blurred the line is between fiction and anecdote in many of his works. Critics believe that Rich Dad is fictional and that Kiyosaki created him as an author surrogate (http://en.wikipedia.org/wiki/Author_surrogate) (a literary device (http://en.wikipedia.org/wiki/Literary_device)). In the past, Kiyosaki has maintained that Rich Dad actually existed, but that he died decades before the book was first published.[citation needed (http://en.wikipedia.org/wiki/Wikipedia:Citation_needed)] However, he has never revealed his name or any other identifying information. Attempts by outsiders to determine Rich Dad's identity have not revealed a conclusive candidate, despite the prominence such a wealthy individual would likely have had in Hawaii in the 1950s.

source: wikipedia (http://en.wikipedia.org/wiki/Robert_Kiyosaki#Books)

Lili

May 6th, 2009, 08:18 PM

tonyboy

May 6th, 2009, 08:26 PM

Nope, the title is: Increase Your Financial IQ

Because of the current time, I am forced to read such books. Hahahaha

i see...http://images.alibris.com/isbn/9780446509367.gif
-------^^
a few negative comments about robert kiyosaki's book...

Kiyosaki loves to play the rogue, offering unconventional suggestions for building wealth. He’s a vocal detractor of mutual funds, for example, and frequently seems to be pushing a new “hot” investment: real estate, oil, gold, silver. He likes to make provocative claims like “people should not live below their means”.

Yet if you dig a little deeper, it becomes clear that Kiyosaki is saying a lot of this just to get attention. It’s a marketing ploy. He really does think it’s important to spend less than you earn — he just thinks the best approach to a budget deficit is to raise your earning power instead of reducing spending. Armed with my own advice about how to read a personal finance book (http://www.getrichslowly.org/blog/2007/08/28/how-to-read-a-personal-finance-book/), I decided to give Increase Your Financial IQ a chance. I approached it with an open mind. Ultimately I read it three times. I’m still not sure what to think of it.

Financial Intelligence
“It is not real estate, stocks, mutual funds, businesses, or money that make a person rich,” Kiyosaki writes. “It is information, knowledge, wisdom, and know-how, a.k.a. financial intelligence, that makes one wealthy.” He notes that buying a new set of golf clubs won’t improve your game, but paying for lessons will. It’s his hope that Increase Your Financial IQ can help readers improve their money “game”.

Kiyosaki divides financial intelligence into five “Financial IQs”:
Making more money. This is measured by how much money you earn. If you make $100,000 a year, you have a higher Financial IQ than someone earning $30,000 a year.
Protecting your money. Once you earn your money, you need to hold onto it. Protecting your money, especially from taxes, is the second Financial IQ.
Budgeting your money. “Being able to live well and still invest no matter how much you make requires a high level of financial intelligence,” Kiyosaki writes. This Financial IQ is measured by how much money you have left after expenses.
Leveraging your money. This Financial IQ is measured by return on investment. How well do you make your budget surplus generate more money?
Improving your financial information. Financial information doesn’t just mean knowledge of basic financial concepts — it also means detailed knowledge of the investments you make.

source: increase your financial iq (http://www.getrichslowly.org/blog/2008/05/07/robert-kiyosaki-increase-your-financial-iq/)

more...

What I liked and didn’t like

Like. Kiyosaki is a contrarian, which at times is a good thing. He believes more people should work for themselves to create wealth and alternative income streams (http://cashmoneylife.com/category/alternative-income/) instead of relying on trading your time for a paycheck.

This is contrary to what many people believe - go to school, get a good job, and save. Not everyone should run their own business, in my opinion, but everyone can do little things to increase their income.

Didn’t like. Kiyosaki is extremely harsh on the stock markets, which in itself is not a bad thing. But it is a bad thing when you make incorrect blanket statements about them. :ohno: Case in point: “You can train a monkey to save money and invest in mutual funds. That is why the returns on those investment vehicles are historically low.”

Obviously, this is a horrible statement. Many funds have high historic returns, as does the market as a whole. However, there are no guarantees with the market, and the US market is based on the US dollar, which has been steadily losing value for years. I believe this is Kiyosaki’s main contention with the markets.

Halaseh 01.21.09 at 4:04 pm (http://cashmoneylife.com/2008/03/21/increase-your-financial-iq-book-review/#comment-16158)
This is one of the worst books I have ever read… all the ideas in it can be summarized in maximum 10 pages!!!! He keeps repeating and repeating the same ideas, which are maybe correct in a computer game not in real life.

source: book review (http://cashmoneylife.com/2008/03/21/increase-your-financial-iq-book-review/)

tonyboy

May 6th, 2009, 08:45 PM

^^ of course, she has her critics, too, claiming that she over-simplifies financial matters.

But that's what I like about her -- she's a nuts and bolts type of person. The last thing I want to do is invest in something I don't understand.

In terms of investing, she is more conservative. So, I guess, it depends on the individual and that person's threshold for risks who he/she prefers to be his/her financial guru.

As Chris mentioned above, it is good to increase one's financial IQ by learning from a cross-section of tried and tested financial wizes, and not swallowing whatever is said hook, line and sinker.

It's a combination of education, research, savvy and gut instinct.
^^
@ lili..agreed..our family are simple folks..trying to learn the simple way...my parents' mantra..da kiss principle ---keep it simple senora..:cheers:

while in principle..i also dream of rk's ability to leverage purchasing a multitude of real estate investments...but nowadays..who can afford buying houses then selling or renting them out? it's tantamount to "flipping"..hmmm....isn't this how we got in trouble with the current slimy subprime mess in the first place???

sirhc aziledrolf

May 7th, 2009, 04:39 AM

Every successful person has at least 1 critic :)
Anyway those authors are just sharing their ideas and experiences, how to make it work will be up to you :)

bulakeno

May 7th, 2009, 06:20 PM

sows akala ko pa naman naiintindihan ko, hindi pala (daw)!!! :nuts:

That sentence was meant as an honest compliment. :)

bulakeno

May 7th, 2009, 06:51 PM

Nope, the title is: Increase Your Financial IQ

Because of the current time, Iam forced to read such books. Hahahaha

Good for you! We all need to increase our financial IQ! :banana:

yaluman

May 14th, 2009, 10:40 PM

tonyboy

May 16th, 2009, 11:31 PM

Hmmm.. you can PM me mr. Tony about that Rent-to-Own option if you want. It won't be easy and it will take time, but you will sell your unit faster :-)

thank you so much for your very kind offer terman..my relative has already found a new tenant..also..she doesn't want the option of rent-to-own...kasi daw as you posted above ^^ ..matagal and complicated ang ^^ processo..:ohno:

she has her rental property up for sale na...with or without the tenant... :)

siamu maharaj

May 17th, 2009, 10:24 AM

arnolds

May 19th, 2009, 07:13 AM

Hey guys, hello from a Pakistani forumer.

Today I saw this ad about the site liveyourdreams.ph, and how one could invest in the Philippines. As a real estate investor it got me interested. Unfortunately that site is designed as if it's for kids or something and is slow and poor, so I've come here for further info. I couldn't find a thread on real estate so I thought I'd start one. Basically I know nothing about the Philippines Real Estate sector so I was wondering if anyone here could help me out.

My take on Philippine Real Estate investment is that it is not a good play. With cap gain taxes (6%) based on selling price instead of actual cap gains, any short term accumulation is nullified with all the fees imposed.

High End condo units rentals (Rockwell, Greenbelt) are probably your best bet if you snagged an Expat renter who are willing to pay high prices.

terman1718

May 22nd, 2009, 01:49 PM

Hey guys, hello from a Pakistani forumer.

Today I saw this ad about the site liveyourdreams.ph, and how one could invest in the Philippines. As a real estate investor it got me interested. Unfortunately that site is designed as if it's for kids or something and is slow and poor, so I've come here for further info. I couldn't find a thread on real estate so I thought I'd start one. Basically I know nothing about the Philippines Real Estate sector so I was wondering if anyone here could help me out.

Hello Mr. Siamu! You are right in saying that there are only a few forums who talk about Philippine Real Estate, like this one and in Pinoymoneytalk.com. Try the link below...

http://www.realestatephilippinesblog.com/how-to-invest-in-philippine-property/

terman1718

May 22nd, 2009, 01:54 PM

I see. Your welcome Mr. Tony :-) Just let me know if you have any other questions...

ForwardTaguigCity

May 27th, 2009, 03:46 PM

yaluman

June 1st, 2009, 02:31 PM

Posted Friday, February 13, 2009 by Justin Fox http://justinfox.typepad.com/jandj.jpg

Excerpt:

Don't spend more than you make. Don't buy things you don't need. Save for a rainy day. If Americans had followed these simple rules over the past decade, there would be no financial crisis, no worst-since-the-1930s recession, no acrimonious Washington debate over what to do about it.

Now we seem to be starting to rediscover thrift. Debt levels are falling. Consumer spending is down. The savings rate is on the rise. Great, right? Not exactly. The sudden sobering up of the American consumer happens to be the No. 1 force driving the U.S. and global economies downward. We're saving more, yet we're all getting poorer.

This is what some economists call the paradox of thrift. The notion is generally credited to Englishman John Maynard Keynes--seemingly the source of every important economic idea these days--although he doesn't appear to have actually used the phrase. Paul McCulley, an economist and portfolio manager at bond giant Pimco, defines it like this: "If we all individually cut our spending in an attempt to increase individual savings, then our collective savings will paradoxically fall because one person's spending is another's income--the fountain from which savings flow."

I'm the business and economics columnist for TIME. Before joining the magazine in 2007, I spent more than a decade writing and editing for Fortune, which is in the same building (but, crucially, on a different elevator bank). I was Fortune's chief economics writer, but also covered topics ranging from international business to technology to investing to high-end Japanese cuisine. In 2000 and 2001, I was the magazine's Europe editor, based in London. I started this blog, the Curious Capitalist, on CNNMoney.com (Fortune's Internet home) in 2006.

Way back when, I also worked at the American Banker, the Birmingham News, and the (Tulare, Calif.) Advance-Register. I grew up outside San Francisco, went to college at Princeton, and lived in the Netherlands for a while. I'm married and have a son, and we live in New York City.

Oh, and I'm working on a book. Have been for years. It's titled The Myth of the Rational Market, and Collins signed me up to write it on the basis of this article in Fortune. It's due out in the spring/summer of 2009, although I still have to get some revisions back to my editor and financial panics (a.k.a. irrational markets) keep getting in the way.

Saving stimulates investment.

^^ - RE investment. ^^

Read more. (http://www.time.com/time/magazine/article/0,9171,1879195,00.html)
http://img.timeinc.net/time/columnist/105_thumbnails/105_col_fox.jpgJustin Fox

yaluman

June 1st, 2009, 02:37 PM

^^"But we do not do without anything necessary. We have phones, car insurance, health insurance, heat, water and food."
:okay:

From Michelle Scarbroughhttp://media.newsobserver.com/smedia/2009/03/15/08/488-cents_sensibility-315_G0RCHN7F.1+State.1st.WM_f.IMG1.mi_embedded.prod_affiliate.3.jpg

Source: NewsObserver (http://www.newsobserver.com/business/story/1443566.html)

manfriday

June 9th, 2009, 04:58 PM

Just want to share a blog that I wrote for the Inquirer.net

I hope it helps, in whatever little ways, in your real estate ventures.

http://blogs.inquirer.net/househunter/2009/06/08/what-you-should-know-about-rp-construction-industry/

Thanks

jun sanchez

tonyboy

June 10th, 2009, 01:53 AM

Optimism in the market is a good thing. It's a sign that, although we're not completely out of the mess, we're DOING SOMETHING to get out of it.

On another note, I hope Congress passes the Real Estate Investment Company Act, originally the Real Estate Investment Trust Bill as proposed by Sen. Edgardo Angara. The bills main selling point is that it allows retail investors to invest in real estate, residential, commercial or industrial, without having to buy an entire unit or building. Imagine mutual funds, but instead of investing in stocks or bonds or money market securities, you invest in real estate. I think the time is NOW to pass the bill while the philippine real estate market is still relatively bullish. We all say that real estate is the best investment that you can make but we all know that the amount of capital investment is prohibitive for most Filipinos. A law allowing Real Estate Investment Trusts will allow more and more Filipinos to invest in real estate

^^ amen to that....:cheers:

bulakeno

June 10th, 2009, 11:36 AM

Interesting thread, Bulakeno! :master:

BTW, Off topic - Are you the same Bulakeno in PEx posting in LBYM (http://www.pinoyexchange.com/forums/showpost.php?p=31054266&postcount=881) - Living Below Your Means? :)

Thanks! ^^ Yes Ma'am, I am! :)

OT: Welcome to SSC!

3cr

June 15th, 2009, 11:26 AM

Dang around P1M now for single slot parking in Makati! Super Expensive Na!

P1.2m for car park:

LUCIO TAN’s Eton Greenbelt, the taipan’s first foray in the premium residential condo market, has raised the bar in the price for parking slots, charging as much as P1.2 million for an above-ground slot nearest the elevators.

The price goes down to P900,000 for slots in the basement levels.

The P1.2-million tag is twice as as much the asking price, set about three years ago, for the now sold-out Greenbelt Residences, the three Ayala condominiums on the other side of the Greenbelt mall.

Even at P900,000, the Eton price is markedly higher than, say, the P750,000 pre-selling price for a car park in Senta, another planned Ayala condo in Greenbelt.

But, then again, Senta is a mid-market condo located four blocks away from Greenbelt mall, right next to the Union Church.

Senta’s price is about the same as that of another aggressive Greenbelt builder, Andrew Tan’s Megaworld, which charges anywhere from P680,000 to P780,000 for “parking rights.”

Condo buyers who could not afford to fork up the small fortune would have to jockey for a limited number of slots in commercial car parks or, if they are lucky, within the same condo. Current leases range from P5,000 to P7,000 a month, equivalent to nearly a month’s minimum wage.

terman1718

June 18th, 2009, 04:16 AM

Yes, Amen to that indeed :-) A mutual fund that involves Philippine Real Estate...

A recent news report says that OFW remittances went up 2% and that the U.S. is considering raising interest rates for the first time in months because their job losses last month were the lowest since the recession started. Hence, the stock market showed a recent rally.

Is this the start of the recovery? Hopefully... Only time will tell

5tar

June 22nd, 2009, 06:02 AM

That capital gains tax rate is for stock (5% up to P100,000, 10% over P100,000), and the capital gains tax rate for real estate is 6% according to the BIR: http://www.bir.gov.ph/taxinfo/tax_capgin.htm

Does anyone know if the capital gains tax is at the same rate for both Philippine citizens and for foreign citizens?

Ang liit naman pala ng selling price.. mas malaki pa yung mga tax na binayaran...

arnolds

June 22nd, 2009, 06:51 AM

Ang liit naman pala ng selling price.. mas malaki pa yung mga tax na binayaran...

And capital gains is based on the selling price...not the difference between the selling price and acquisition price.

So if you sell the condo for 10million pesos and acquired it for 9million, 6% is computed off the 10million selling price, not the 1 million gained.

And yes, do still will get charged a cap gains tax if you sold it a loss.
:ohno::bash::nuts:

rickb888

June 24th, 2009, 02:08 AM

Anybody here has info on any townhouses in makati area or manila that affordable?

pat3ck

June 24th, 2009, 05:43 AM

i'm a duplex developer. i have a project offering in paranaque though...if you're still interested gimme your email and i'll send you pictures.

my email is pat3ck@gmail.com

rickb888

June 24th, 2009, 03:42 PM

i'm a duplex developer. i have a project offering in paranaque though...if you're still interested gimme your email and i'll send you pictures.

my email is pat3ck@gmail.com

hi pat3ck ,

my email is rickb888@gmail.com where in paranaque ?

rickb888

June 28th, 2009, 08:10 AM

hi everybody,

i just want some feedbacks reagrding condos as investments :

1) for rental- based on my computations the usual RIO for renting out a condo is like average 10 years ? is this correct ? aalthough some salesperosn tell me its 5 yrs i think 5 years is too short whats the average RIO for renting out condos

2) pre selling then selling - i know some people get the condo at preselling prices and then sell it off ones its increased , is it safe to say that you can get a 20% increase from pre selling prices once its constructed

3) using your condo then reselling it - whats the drop off point of the prices of a condo? baka in 10 years time the price of yoru unit will depreciate due to the building gettting old already .and there are lost of new condos being built

4) has there been any condos taht have been demolished and teh lot sold again , i wonder what was teh valaue distributed to teh units owners once the lot has been sold , di dthey earn money kaya ? hehe

borntrippy

June 28th, 2009, 12:02 PM

if you dont get the parking space though, do they let you park in other areas within the property? i mean for those "community" types like the dmci projects. i know for ortigas/makati condos there really is no "other areas" to park.

Retro

June 28th, 2009, 12:20 PM

:dance2::dance2:
For DMCI project like medium rise building you have choices to leased via condo admin parking slot that are not yet sold. On the other hand DMCI high rise building project are usually have limited rental parking slot better get your own. Good example are Raya Garden along South SHway and Dansalan Garden in Mandaluyong City.

rickb888

June 28th, 2009, 04:10 PM

does it mean that if i got a 3m condo ill have to pay :
3,000,000 x 2.5%= 75,000 taxes annually?!

terman1718

June 28th, 2009, 04:58 PM

Good info. Reposting here.

Thank you 3cr for quoting my article :-) Im glad you found it very helpful

I think real estate is starting to pick up now, as I've noticed that our sales in Eton Properties in picking up. Maybe what they said about the 2nd half of the year is true - that the economy will start to grow again and recover. Sana nga

terman1718

June 29th, 2009, 03:39 AM

cebu2manila

June 29th, 2009, 04:45 AM

Guys let me enlighten about real property taxes applied on condos, from the document that was handed to me from Joya at Rockwell. according to my record taxes is computed as follows: $5/sqm/year as of May 2005. So if your condo has 79sqm. it would come out to $395/yr. If you need some more info about other payments-association due,ins./taxes on common areas, one time payment paid upon turnover of unit -Joya in particular- let me know and I'll be glad to provide you.

the 2.5% is the transfer tax of your property total purchased amount and its a one off payment . yearly property tax is based on the sized of the property, and only cost few thousand pesos per year.

cebu2manila

June 29th, 2009, 04:55 AM

I am sorry if this has already been asked: If I am going to rent out a condo unit, who usually pays the association dues? it is the person renting?

the owner of the condo will pay all the association dues. if you rent i think you only pay for the electricity and water plus phone landline usage.

leechtat

June 29th, 2009, 01:01 PM

^^ depending on the arrangements... oftentimes the lessor pays the dues...

Retro

June 30th, 2009, 06:18 AM

So you think parking in Makati is expensive?
By Don Gil K. Carreon, BusinessWorld | 06/30/2009

MANILA - People complain that parking rates in Makati should be called legalized highway robbery but a global study has found that charges in the central business district are actually among the cheapest in the world.

Colliers International’s 2009 global parking rate study, released yesterday, showed that Makati’s daily and monthly median rates of $2.65 (approximately P128 at P48.30:$1) and $42.40 (P2,048), respectively, are one of the cheapest compared among 21 Asia Pacific cities.

Hong Kong was the most expensive in the region in terms of monthly rates, at $748.20 or P38,138, although in terms of daily cost Tokyo was the highest at $52.50 (P2,536). The Japanese capital was just the fifth most expensive in the Asia Pacific in monthly terms,

Globally the most expensive was Amsterdam with a daily median of $70.77 (P3,418) and London-City’s monthly unreserved median of $1,020.29 (P49,280).

Makati’s rates are only more expensive than Jakarta’s ($27.20 or P1,313 per month, no figures for daily charges) and the daily rates in four Indian business districts: Bangalore ($1.50 or P72), Delhi ($1.28 or P62), Mumbai ($1.07 or P52), and Chennai ($0.96 or P46).

Francine C. Fernandez, an account executive for the magazine Tatler, said she usually shells out P125 per day for a parking space in Makati.

"It’s expensive. In Ortigas [the fee] its almost half that," she said.

While the rate is steep, Ms. Fernandez said she accepts it as "part of working in Makati."

Colliers said that in terms of monthly medians, the most expensive, in descending order, were London-City, London-West End, Amsterdam, Hong Kong, and Sydney.

In the Asia-Pacific, Hong Kong was on the most expensive followed by Sydney, Brisbane, Tokyo, and Perth.

The study noted that in the United States, few cities had seen a meaningful pullback in parking rates despite a loss of six million jobs and a significantly more challenging business environment.

"Daily and monthly parking rates in the US diverged over the past 12 months (ending June), with daily rates up 1.2% (US$0.18) and monthly rates sliding ever so slightly by 0.9% (US$1.47). The monthly median parking rate now averages US$154.23 in the US," a Colliers statement read.

The firm attributed the relative rate steadiness to a continued imbalance between parking supply and demand.

chinita8

June 30th, 2009, 11:22 AM

any news on Playa Calatagan nowadays? i have a relative who bought a prime seaview lot at phase 1 and wants to know if there are new developments there? i have actually seen 2 houses being built already at phase 1, any other?

chinita8

June 30th, 2009, 11:41 AM

the 2.5% is the transfer tax of your property total purchased amount and its a one off payment . yearly property tax is based on the sized of the property, and only cost few thousand pesos per year.

My real property tax (RET) for a small condo in makati does not cost me only a few thousands of pesos per year, it actually costs me 30K+ per year. Whew! Now, i want to get out of this city quick!

To all prospective condo buyers, I suggest that prior to closing a purchase, please inquire on how much real property tax (RET) is for your condo. This is the tax you pay to your city's municipal office (munisipyo) every year -- and mind you, every city charges differently. For example, Muntinlupa and Taguig costs far less than Makati's RET.

This is very important as you will be burdened in paying this year after year after year, whether you live in your condo or not. So long as your name is in the title, you are obliged to pay annually. Do not even attempt to be late in paying or be delinquent, as the "munisipyo" is quicker than lightning in charging you penalties or will even post your name in the newspaper if you opt to be delinquent in your RET payments.

TheRick

June 30th, 2009, 11:56 AM

I think all the roads on phase 1 are complete. The commercial area should be ready soon.
I think there are some more but I'm not sure. I've heard atleast 3 homes are completed.

jerseygeorge

July 1st, 2009, 02:18 AM

My real property tax (RET) for a small condo in makati does not cost me only a few thousands of pesos per year, it actually costs me 30K+ per year. Whew! Now, i want to get out of this city quick!

To all prospective condo buyers, I suggest that prior to closing a purchase, please inquire on how much real property tax (RET) is for your condo. This is the tax you pay to your city's municipal office (munisipyo) every year -- and mind you, every city charges differently. For example, Muntinlupa and Taguig costs far less than Makati's RET.

This is very important as you will be burdened in paying this year after year after year, whether you live in your condo or not. So long as your name is in the title, you are obliged to pay annually. Do not even attempt to be late in paying or be delinquent, as the "munisipyo" is quicker than lightning in charging you penalties or will even post your name in the newspaper if you opt to be delinquent in your RET payments.

I just paid my RET in Makati last Jan. I took advantage of 10% discount when u pay before Jan.20. It cost me 21,043.12 PhP/yr for 1 bedroom in m Makati.

bustero

July 3rd, 2009, 05:02 AM

Unfortunately the response of planning authorities is to require more parking per built up area. While this seems common sensical at first, the reality is that the capital needed to put up parking which is not a profit center for developers would have best been spent on improvements to other transport methods i.e. wider better sidewalks , mass transport, other public improvements. More parking means more cars, more cars means more traffic, there's just no way around it.

Climax777

July 6th, 2009, 09:59 AM

Furnished West Parc(Birch Bldg)New Studio Unit for Sale
near Alabang Town centre appr.400mts.away
Floor area: 38 square meters with air conditioner,refrigerator,bed,sofa,
diningroom set,microwave,stove and wardrobe closet.
Sale asking Price: 3.1M cash or for rent 25,000 per month.
for inquiries/interested PM me.

planetjester

July 11th, 2009, 05:56 AM

i just have a curious question.

obviously location is key when investing in a condo. places like makati, rockwell, fort, alabang, ortigas always have a great potential to yield a lot of renters.

wanted to know though if people here have invested in reasonably nice locations but not as prime as that mentioned above, is renting out still that lucrative? what's the market of renters like when the unit you want to lease out isn't in one of the 5 areas mentioned above?

reason i ask is me and some siblings want to invest in a condo development in sucat parañaque. while i do realize that the rent cannot compare to the rents charged in let's say makati, i just want to know if there still is a large market of renters in that area? and if investing for the purpose of renting it out is still a sound idea in not-as-prime-locations? i know there are a lot of condo developments too on my way driving to work, like the DMCI property along C5. nice developments, but again, are there renters?

i hope condo developers don't take any offense whatsoever in this post. I'm not saying properties in sucat or DMCI properties aren't up to par, i'm just curious to find out how the dynamics of renting out a unit change when the unit is in a not-so-obvious location.

thanks.

planetjester

July 11th, 2009, 06:28 AM

reittrader

July 11th, 2009, 08:54 PM

The first is obvious:

1. Shangri-La (Kuok Group) of Singapore

Then a far, far second:

2. Ayala

A notch below:

3. Megaworld

Eton maybe at Ayala or Megaworld's level but no track record yet as to finished product.

I've been trying to read up on the rep of a lot of condo developers online, and i go to this site for a lot of insight and insider information.

i notice that some of the comments/reviews in this post date back to 2005, but I wanted to ask if anyone here had some updates on who's a reliable developer and who isn't. i saw a thread online just recently citing the Best and Worst Real Estate Developers, and some of it can be pretty scary especially if you're an investor getting property from a developer with bad reviews.

what's the ranking of developers now? who's the best? who should we avoid?

who's solid in terms of delivery date, quality of the units overall upon turnover, quality of promised amenities, materials used were as promised, developers who don't overcharge or have hidden charges?

i look forward to reading some newer insights about the reps of condo developers here, especially since in 2009 there are lots of turnovers happening. if you have some info and did some looking into this, feel free to share what you know. thanks.

planetjester

July 12th, 2009, 04:36 PM

Thanks for the feedback reittrader.

Just wondering what made you say that Ayala is a far, far second? Have both Ayala and Megaworld had bad reviews lately with their properties and turnover? In what aspects are they far inferior/lacking compared to the Shangri-la group?

I did see the output of the St. Francis towers and man was I floored.

reittrader

July 12th, 2009, 04:56 PM

Shang has a world wide reputation -- even here in NYC they are building something joint with another developer.

And yes, their output is world class.

Can't say the same for any other Fil developer. But locally, Ayala has more satisfied customers than Megaworld and has a name premium. There is also a rent premium for Ayala properties.

leechtat

July 13th, 2009, 08:07 PM

I've been trying to read up on the rep of a lot of condo developers online, and i go to this site for a lot of insight and insider information.

i notice that some of the comments/reviews in this post date back to 2005, but I wanted to ask if anyone here had some updates on who's a reliable developer and who isn't. i saw a thread online just recently citing the Best and Worst Real Estate Developers, and some of it can be pretty scary especially if you're an investor getting property from a developer with bad reviews.

what's the ranking of developers now? who's the best? who should we avoid? ....

^^ it really depends on what you want to buy in terms of market segment... these developers i will mention always delivers, some though are sometimes late...

high-end = 8-9 M and above...

1. ayala land premiere (still the best in terms of value appreciation)
2. rockwell land
3. shangri-la (once we see the finished st. francis, they may even move to #1)

upscale = 4-5 M to 9M (sometimes above)

1. alveo and megaworld/empire east (megaworld may be high-end, but their market is just like alveo, an ayala land company)
2. sm land (a sleeping giant.. that's what i would like to call them)
3. g&w (nice projects, bto company with huge following)
4. filinvest (old rich.. must prove new rich buyers that they can still provide value in their properties)
5. alpha land (they have so much money, due to off-shore backing)
6. none.. but maybe... century...

low-end = 4-5M and below...

1. dmci - (one of the best companies to watch, good to buy their shares too)
2. phinma
3. avida (ALI, flanker brand)
4. brittany/crown asia/polar realty..
5. san jose builders..

TheRick

July 14th, 2009, 01:27 AM

What about Philtown, Eton, Cityland and Century City?

bustero

July 14th, 2009, 05:55 AM

am not to sure about Ayala being the best in value appreciation but they do have good products

bustero

July 14th, 2009, 06:14 AM

Nothing offensive with your post.
Actually you must distinguish what your investment plan is, one makes money from real estate primarily from two manners: an asset play or an cash flow play (some would say you convert the cash flow to specific deal anyway so it's still cashflow). If you're looking for an asset play then there's a cap to the apprection on your asset in marginal areas. There's only so much desirability nor density (these are the drivers of capital appreciation) that one can get from more generic areas in the suburbs. In terms of yields though there are many more interesting plays in the non prime areas than initially thought of. Extreme examples are squatter areas where there are no capital (ownership) rights so all cash flow both inflow and out are variable. This is how slumlords acquire wealth. Bottom line yields in non prime areas can possible be much much better than prime areas.

planetjester

July 14th, 2009, 08:47 AM

thanks for the detailed account on the developers you mentioned leechtat! very insightful!

keep the other views comin' :D

rickb888

July 15th, 2009, 05:11 AM

shangrila is top notch as well as rockwell

ayala is consistent

megaworld if you check the feedbacks is consistent in complaints delays i have a friend that waited for 5 years dapat 3 years un

dmci is pretty ok they built many good projects and are now building raffles so they know their stuff in terms of building it right

sm i think is ok and based on how they handle their malls i would assume that theyre good at property management , they got the money too , they really strict and wanst to take care of their brand name ( based on the sm people i dealt with )

robinson's based on feedback from owners its ok

philtown? - i heard wala na sila budget thats why ung metropolitan di matuloy and the might sell it off to somebody else but i heard there was some dispute because they wanted to retain philtown name to save face and the potential buyer deosnt want

Eton? - pretty new , but they got the mollah although im not sure about the finished product

antel - mukahng ok naman but most people have the impression that the dont have funds

weedkiller

July 15th, 2009, 12:33 PM

Thanks to the originator of this thread...I realized that I need to take a parking slot for my condo unit :cheers:

bartman

July 15th, 2009, 10:46 PM

bustero

July 16th, 2009, 08:09 AM

true it's very limited but the funny thing is effectively that is what gov't requirements on parking is, a transference of public initiative of what should be a social good (greater mobility) subsidized by private enterprise since developers actually don't make money on parking . even at 1.2 m per slot the allocated space on that will run from 30 to 35 sq.m. because of the common areas and practical limitations set by columnation, so at around 40k per sq.m. that sounds like a lot but after allocating all costs (less marketing, less taxes, less construction costs, less land,etc) , you'll find that developers will hardly make any money on this item. If the gov't did not dictate needless parking requirements then individual developers can figure out on their own as per their market segment served what the correct ratio of units to parking area should be. It's also why i think parking slots in MM is undervalued.

Retro

July 16th, 2009, 09:35 AM

:ohno:
For those who are living in Quezon City area better get your own park slot.

Businessmen oppose QC parking fee ordinance
Thursday, 02 July 2009

http://newsbreak.com.ph/index.php?option=com_content&task=view&id=6372&Itemid=88889404

Owners and managers of the business establishments in Quezon City are up in arms against a proposed ordinance, which seeks to impose parking fees on “places of special interest” in the country’s premier city.

In a position paper presented today before the committee of ways and means of Quezon City Sangguniang Panlungsod, Edwin Rodriguez, adviser of the Tomas Morato Business Club, said the Proposed Ordinance 2009-04, or Street Pay Parking Ordinance for Places of Special Interest in Quezon City, is “ill-timed, ill-advised, and anti-people.”

Rodriguez described the proposed ordinance as “oppressive,” even as he argued that it would penalize car owners and other motorists, “who are already saddled with rising petroleum prices, maintenance and repair cost, will be further burdened with parking fees.”

Under the proposed ordinance, parking fees ranging from P20 to P150 will be imposed on cars, SUVs, vans, buses and trucks for the first three hours on places, which the Quezon City Government will define as “places of special interest.”

The proposed ordinance describes these “places of special interest” as those “where people congregate, including but not limited to parks, churches, government offices, schools, museums, shopping malls, and other similar establishments which attract a lot of people.

The proposed ordinance is being initiated to raise revenues for barangays, ensure peace and order, ease traffic congestion, prevent carjackings and provide employment for barangay tanods.

But Rodriguez said the proposed ordinance stands on shaky ground since “the Quezon City Government is awash with surplus revenues.”

“It is difficult for us to comprehend why this revenue measure is being pursued when the Quezon City Government could hardly spend what it has collected,” Rodriguez said. “This defies logic.”

While saying that any revenue measure is “oppressive by its nature,” Rodriguez said “the oppressive nature of [the proposed ordinance] outweighs the common good.”

Rodriguez said the proposed ordinance would not solve traffic congestion since what the city needs is a traffic rerouting scheme that would involve traffic engineering.

Also, Rodriguez denied that the proposed ordinance would solve carjacking, saying “this is highly speculative.

“The issue of carjacking is a police matter. Let the Philippine National Police handle this issue,” Rodriguez said.

Retro

July 16th, 2009, 09:57 AM

Since this forum is all about parking space. Below is my own summary
which cities in Metro Manila that charges street parking :banana:

1. Makati CBD
2. Ortigas CBD
3. Pasig City
4. Pasay City
5. FBGC, Taguig
6. All SM Malls, Ayala Malls, Robinson Malls

Cities and nearby cities which still has free street park area.
1. Quezon City (free for now)
2. Valenzuela
3. Marikina
4. Antipolo (partial free)
5. Paranaque City (partial free)
6. Pateros
7. Manila (partial free)
8. Cainta
9. Taytay
10. Muntinlupa (partial free)
11. Malabon
12. Mandaluyong (partial free)
13. Las Pinas
14. San Juan (partial free)
15. Caloocan

Feel free to add or make some changes, this way we could guide future condo buyer if they need to invest on their own park slot :shifty:

sloanesquare

July 16th, 2009, 11:10 AM

my parking spaces are included in my TCT so the price of parking spaces becomes moot

3cr

July 17th, 2009, 02:59 AM

Sure seems like parking slot prices are appreciating much faster than unit prices these days ain't it. I remember P500,000.00 was deemed quite expensive for a parking space in BGC sometime ago but seems like a bargain when they are trying to sell the same thing for P800,000.00 now (that's how much its going for at the Trion project). And according to the above posted articles it's around P1M now for single slot parking in Makati and corresponding rental for single parking ranges from P5,000-7,000/month! Dang getting super expensive na in Makati and up-coming areas like BGC seems not far behind in this trend.

Actually I've seen this parking price appreciation phenomena happen in Eastwood already (prices doubled in such a short time) and won't be surprised one bit if BGC will follow suit especially once its CBD (Central Business District) comes to fruition. Without concrete plans for more parking structures/spaces in the horizon, parking in BGC will remain very limited and as parking availability shrinks in BGC, it's not just parking slot prices that will surely go up, rental too. It's all about supply and demand after all. Currently, single slot parking rental in BGC is already hitting around P5,000/month now and still expected to continue rising as the city develops. It may not be obvious now but perhaps when critical mass is reached (much like what's happening in Makati) that one will really get to appreciate having that parking slot to go with one's unit, especially if one has intentions of selling the unit later down the line.

Several experienced and knowledgeable realtors/investors I've consulted with vouch that in most situations it's really much easier to sell a unit (that has 1 or more bedrooms) with a parking slot than one without, regardless of the unit's proximity to public transport hubs, after all the Philippines is a car culture society and so chances are one will already be in possession of a vehicle which will require a parking slot. In as much as I am for using public transport whenever possible, I just don't think we can take the car culture away from our car-loving filipino families which is why I believe and support such view as well so much so that I ended up buying a parking slot myself. Buti na lang nga I bought when parking was still reasonably priced compared to what they are asking for nowadays.

sloanesquare

July 17th, 2009, 04:16 AM

sw33t_water

July 17th, 2009, 11:40 AM

Ha ha and I thought my parking was expensive, I just purchased a slot for P625,000. (SM SEA RESIDENCES)

Kintoy

July 17th, 2009, 11:51 AM

parking slots in Berkeley Residences in QC are around 600,000++ at basement 2

Aziza1121

July 17th, 2009, 05:14 PM

In GRASS RESIDENCES, perimeter parking is 450k, 2 parking buildings (10-storey each bldg) is 550k, and 2-level basement parking (available only in Tower1) is 600K.

Retro

July 19th, 2009, 12:34 PM

This is a typical parking situation in Fort Boni if you don't your own parking lot :ohno:

Nearby Netsquare Bldg. area....
http://i109.photobucket.com/albums/n61/retro_ga/FBGC09/Net2Park1.jpg

Beside Net Cube in front of Dell's Restaurant.....
http://i109.photobucket.com/albums/n61/retro_ga/FBGC09/DellsRestPark1.jpg

yaluman

July 22nd, 2009, 02:47 PM

^^:)

Five Signs That You're Living Beyond Your Means
by Glenn Curtis
Monday, July 20, 2009
provided by http://us.news2.yimg.com/us.yimg.com/p/fi/16/50/22.gif

Many people in America live beyond their means. Between 1993 and 2008, personal savings rates in the U.S. declined, hitting the lowest levels since the Great Depression in 2006 by falling into negative territory, according to the U.S. Bureau of Economic Analysis. However, by May of 2009, household savings rate had shot back up to 6.9% - the highest level since 1993. Why the change? A recession that came on the heels of a major borrowing binge, which left consumers with the highest amount of consumer debt ever. It took a credit crisis and near-global economic disaster to get Americans to close their wallets and stop spending. Unfortunately, many people did not stop spending soon enough - according to the National Bankruptcy Research center, bankruptcy filings had nearly doubled by the end of 2008.

If you are concerned that your finances could be in danger, read on for five key indicators to help you determine whether you're living beyond your means.

Sign No. 1 - Your Credit Score is Below 600

Credit bureaus keep track of your payment history, outstanding loan balances and legal judgments against you. They then use this information to compile a credit score that reflects your credit worthiness. The numerical rankings go from a low of 300 to high of 850. The higher the better. It's this score that lenders use to determine whether they'll grant a loan. In general, any credit score below 600 means that you are probably in over your head.

If you aren't sure what your credit score is, contact any of the major credit bureaus (TransUnion, Equifax, Experian) and have them send you a copy of your credit report. This document will tell you what the bureaus - and ultimately lenders and financial institutions - think of your finances.

Sign No. 2 - You are Saving Less Than 5%

In 2006, the average rate of personal savings was an astonishing -0.5%, according to the U.S. Bureau of Economic Analysis. That means that not only were we spending all of our income, but also that a good number of us were also dipping into personal savings. This was the worst savings rate that Americans have recorded since 1933 when it was -0.7% during the Great Depression. The rate bounced back into positive territory in 2008 (Figure 1), and climbed further in 2009. If you haven't jumped on the saving bandwagon, now's the time to do it.
http://us.news2.yimg.com/us.yimg.com/p/fi/17/37/50.jpg

Those who want financial security during their retirement years must make sure that they aren't among those who are spending more than they make. If you are saving less than 5% of your gross income you are likely in over your head.

A savings rate below 5% means you could be in real danger of financial ruin if someone in your family were to have a medical emergency, or your family home were to burn to the ground. With savings this low, it likely means you wouldn't even have the money to pay the necessary insurance deductibles.

Ideally, everyone should try to save as much as they can, but in terms of targets, the rule most financial advisors suggest is 10% of your gross income. Beginning at age 30, if you were to save 10% of your $100,000 annual income in your 401(k), or $10,000 every year, and earn a rate of return of 5%, that money would grow to more than $900,000 by age 65. (Standard wisdom is 10% but there are options if this is impossible.)

Sign No. 3 - Your Credit Card Balances are Rising

If you are one of those people who pays only the minimum due on their credit card balance each month, or if you send in only a small contribution toward the principal balance, then you are most likely in over your head.
Ideally, you should only charge what you can pay off at the end of each month. When you can't afford to pay off the balance in its entirety, you should try to make at least some contribution toward the outstanding principal.

The importance of paying down credit card balances as soon as possible cannot be overstated. A person with $5,000 in credit card debt that makes the minimum payment of just $200 per month will end up spending more than $8,000 and take almost 13 years to pay off that debt.

Sign No. 4 - More Than 28% of Income Goes to Your House

Calculate what percentage of your monthly income goes toward your mortgage, property taxes and insurance. If it's more than 28% of your gross income, then you are likely in over your head.

Why is 28% the magic number? Historically, conservative lenders have used the 28% threshold because their experience has told them that this is the rate at which the average person can get by, make their mortgage payments and still enjoy a reasonable standard of living. Certainly, some homeowners can get by spending a higher percentage on their homes, particularly if they cut back elsewhere, but it's a dangerous line to walk.

Note that if you are currently spending in excess of 28% of your gross income on housing, it may be because many lenders have loosened their requirements over the last decade, and allowed some to borrow as much as 35% of their income. However, since the collapse of the subprime mortgage market, many lenders are becoming more cautious and are once again returning to the 28% threshold.

Sign No. 5 - Your Bills are Spiraling Out of Control

Buying on credit and paying by installment has become a national pastime. It's much easier to buy a new flat screen TV when the salesman breaks down the price in monthly installments. What's an extra $50 per month, right? The problem is that all of these bills start to add up, and you end up nickel and diming yourself into bankruptcy. If your monthly income is being sliced and diced to pay for dozens of unnecessary installment purchases and services, you are likely in over your head.

Lay out all of your monthly bills on your kitchen table, and go through them one by one. Do you have a cell phone bill, a PDA bill, an internet bill, a premium cable TV package, a satellite radio bill, and all of those other gadgets that generate countless monthly bills? Ask yourself whether each product or service is really necessary. For example, do you really need a 500-channel premium cable TV package, or would you really notice the difference if you had fewer channels (and paid less)?

Some of the best places to find savings include your telephone bills (cell and land line), your utility bills (turn off the lights, and don't run the air conditioning if nobody is home) and your entertainment expenses (you could stand to dine out less and to pack a lunch for work).

Bottom Line

As a nation, we have a long way to go before we reach any sort of collective financial responsibility. To avoid becoming part of the gloomy bankruptcy and foreclosure statistics, it's important to measure your financial health regularly. The five signs presented here are not a death sentence; instead, they should be seen as symptoms that allow you to diagnose a problem before it gets worse.

Source: http://finance.yahoo.com/banking-budgeting/article/105396/Five-Signs-That-Youre-Living-Beyond-Your-Means?mod=banking-budgeting

planetjester

July 24th, 2009, 06:23 PM

again i cannot thank you guys enough for your insight. now i have a better idea on who the key developers are. :)

another query though. of all the developers you mentioned, which ones have properties that appreciate more so than the others? ayala has been mentioned a lot as to having premiums in terms of projected rental income as well as assessed market value. any info on the others? developers like Megaworld, Filinvest, even SM Residences?

also, what's an average % of property value appreciation nowadays? how is that predicted or measured anyway? is it annually? monthly? i would want to know especially in the makati area. say if you invest in a condo in makati, what is its value like in a 3-year span? i've heard agents tell me different percentages, so i'm curious as to what you guys may know.

lastly, what factors contribute most to property appreciating in value? is it:

reputation/name of the developer
quality of the property upon turnover
property management/maintenance provided
amenities offerings
key locations (or proximity to key locations)

what else is missing?

twinstar633

July 25th, 2009, 12:17 PM

Hi, may I ask the help of brokers or other individuals familiar with capital gains if you can provide clarification on the following.

Here is an excerpt from the BIR website on conditional exemption from the payment of Final Capital Gains Tax:

Natural persons who dispose their principal residence, provided that the following criteria are met:
• The proceeds of the sale of the principal residence have been fully utilized in acquiring or constructing new principal residence within eighteen (18) calendar months from the date of sale or disposition;
• The Commissioner has been duly notified, through a prescribed return, within thirty (30) days from the date of sale or disposition of the person’s intention to avail of the tax exemption;
• Exemption was availed only once every ten (10) years; and
• ... etc.

My question is regarding the date and sequence to be able to avail of this exemption:

if you acquire the new property first before you sell the old one, would you still be entitled to the exemption?

if yes, what does "acquire" mean?
- contract to sell
- deed of absolute sale
- others?

if the new property you acquired is amortized, and the downpayment/amortization happened before the sale of the old property, but the full payment after, would you still be entitled to the exemption?

thanks!

manfriday

July 25th, 2009, 12:42 PM

To get a bigger and clearer picture of the current condition of the Philippine housing market, kindly read this:

http://www.globalpropertyguide.com/Asia/Philippines/Price-History

Thanks

jun sanchez

manfriday

July 25th, 2009, 01:19 PM

Which would you rather have first, financial freedom or having your own house?

People approach this issue differently. Some will buy their own house first and work on their objective to gain financial freedom later. Others take the opposite approach.

When you already own your dream house, are you willing to sell it to improve your financial position, even rent or will you hold onto it no matter what?

Is rent a waste?

To find answers to this questions and more, kindly read this 5-part blog of an American woman who, together with her husband, attained financial freedom in very unique and inspiring ways:

http://millionairemommynextdoor.com/2009/01/how-i-became-a-millionaire/

I hope you enjoy it.

Thanks

jun sanchez

manfriday

July 25th, 2009, 01:39 PM

Pardon me mods and members if I'm doing this wrong. I'm new here and I don't know if there's a guideline on conducting a poll in this forum. Kindly delete this thread and let me know (thru pm?) if I'm violating any house rules.

There are basically three types of housing the we can own in the Philippines:

single-detached house
duplex/quadruplex/townhouse
condominium unit

Given your financial resources (or your future financial resources) and your current lifestyle, which among the three will you choose? And Why?

Thanks in advance

Lili

July 25th, 2009, 09:36 PM

^ Hi, you can actually create a poll with those choices so you can have the stats calculated easily.

When you create a new thread and click new thread, underneath that you will see a box which you can check off to create a poll and to put how many choices for the poll. You can try that feature out and re-post, if you please.

titong41355

July 26th, 2009, 06:14 PM

Dang around P1M now for single slot parking in Makati! Super Expensive Na!

BECAUSE OF THIS THREAD I DECIDED TO GET 1 PARKING SLOT SA MANHATTAN GARDEN CITY- PARKVIEW TOWERS SA 2ND FLOOR. AKALA KO MAHAL NA ANG PHP650,000.00 PRICE NILA.

Retro

July 27th, 2009, 04:28 AM

Hi,

Considering you have a property in Manhattan Garden City which is inside Cubao, Araneta. I think investing a parking slot would be a wise move. Even if you won't use it immediately the chances to find a potential parkslot renter would be easy :cheers1:

weedkiller

July 27th, 2009, 01:49 PM

I agree with Titong...because of this thread I recently secured a parking slot on my Ga Sky Suites condo for 500K!!! Now I am more confident and happy that I have made the right choice!!!

mirocool77

July 27th, 2009, 02:20 PM

Although not secluded nor island-situated, Punta Fuego in Batangas is fast becoming the toast of Manila's moneyed set. The Punta Fuego peninsula boasts of beachfront and hillside locations facing the Pacific Ocean. I think the developer is Landco.

Ayala Land, not wanting to be left behind, recently launched a similar development called Anvaya Cove in the Bataan peninsula.

If you are really into buying an island, I heard that some of the islands in the Hundred Islands are up for grabs. Not sure though. Also I read somewhere that some islets in the Visayas and Palawan regions are also open for serious buyers.

It's not facing the pacific, it's facing south china sea... :)

3cr

July 31st, 2009, 04:35 AM

Obama says worst of recession is over
July 31, 2009
http://www.news.com.au/couriermail/story/0,23739,25859401-3122,00.html

PRESIDENT Barack Obama yesterday said the 19-month US recession had reached the "beginning of the end".

Moving to address public doubts about his big-spending interventions, Mr Obama said the worst was over. His comments came as new Federal Reserve data suggested economic conditions were slowly starting to stabilise.

The President has faced strong criticism from Republicans over his big-spending assault on the worst downturn since the 1930s, which includes his $US787 billion ($A962 billion) stimulus plan, his $US63 billion in loans to GM and Chrysler and the $US700 billion TARP bailout for financial institutions, many of which recently posted healthy profits.

Polls show public opinion is divided over whether the spending spree has helped head off more economic woes.

Speaking at a North Carolina health care rally on Wednesday, Mr Obama referred to a Newsweek cover that read: "Recession is Over".

He suggested that conclusion was premature, but agreed it had turned a corner.

"We have stopped the free-fall. The market is up and the financial system is no longer on the verge of collapse. That's true. We're losing jobs at half the rate we were when I took office six months ago," he said.

Unemployment, now at 9.5 per cent, has been rising steadily throughout the downturn.

But, Mr Obama said, a run of positive economic data out this week showed the worst was over.

"We just saw home prices rise for the first time in three years. So there's no doubt that things have gotten better," he said. "We may be seeing the beginning of the end of the recession."

The Federal Reserve's latest "beige book" assessment, out yesterday, showed that industry was hopeful, but not so positive.

Manufacturers were expecting a "modest and uneven recovery" while retailers were preparing for a "long, slow recovery".

The job market would remain tough for the foreseeable future, however.

"The weakness of labor markets has virtually eliminated upward wage pressure, and wages and compensation are steady or falling in most districts," the Fed said.

Mr Obama has seen his job approval rating slide in recent weeks as Americans express doubts about his policies.

A new National Public Radio poll put his approval rating at 53 per cent.

The poll found that 45 per cent of those surveyed found that his economic policies helped avert an even worse crisis and were laying the foundation for an eventual recovery, while 48 per cent agreed with the statement that Mr Obama's policies had run up a record federal deficit while failing to end the recession or slow the record pace of job losses.

__________________________

Peso up on opening trade
Business World
07/31/2009
http://www.bworldonline.com/BW073109/breakingnews.php#1321

THE PESO gained slightly higher on opening trade Friday against the dollar as hopes of an economic recovery in the United States encouraged investors to bet on risky assets such as those in the Philippines.

The local currency opened three-and-a-half centavos higher at P48.07 to a dollar from Thursday's close of P48.105.

It has so far reached a low of P48.09 in the early trade.

Currency traders expect the peso to continue trading within the P48-P48.20 range as they await fresh leads.

It has so far reached a low of P48.09 in the early trade.

Currency traders expect the peso to continue trading within the P48-P48.20 range as they await fresh leads.

Economy to grow by as much as 4% this year - Villegas
By Ted P. Torres (The Philippine Star) Updated August 07, 2009 12:00 AM

MANILA, Philippines - A top economist has forecast Philippine economic growth to expand by as much as four percent this year and a further six percent in 2010, powered by higher remittances, consumer spending and infrastructure projects ahead of the national elections next year.

University of Asia and Pacific (UAP) senior vice president Dr. Bernardo M. Villegas said they earlier predicted gross domestic product (GDP) to grow 2.5 percent this year and four percent in 2010.

Villegas said to be able to ensure growth this year and carry that over to 2010, the country must look to increasing growth activities for domestic tourism, medical tourism and retirement villages.

He also called for further expansion in the areas of mining and energy investments to keep the economy competitive while reducing foreign currency losses due to increased reliance on indigenous energy sources.

However, Villegas said economic recovery this year and next will be threatened by higher government deficit, slowdown in exports and consumer spending.

The National Government has downscaled its growth forecast to 2.5 percent this year after a mere 0.4 percent growth reported in the first three months of 2009.

The Asian Development Bank (ADB) also placed growth at 2.5 percent this year and 3.5 percent in 2010. The International Monetary Fund (IMF) has lowered it to 2.25 percent.

The World Bank, meanwhile, expected growth at just 1.9 percent this year after the first quarter numbers were released while investment bank UBS projected GDP growth at 1.8 percent.

Meanwhile, Villegas forecast inflation to end 2009 at 3.3 percent, slightly moving upwards to four percent next year.

The Philippine peso is expected to weaken at 49.50 to the dollar this year and slip some more next year to 51.50.

“Investments will weaker by 10 percent this year but rebound by 3.5 percent in 2010,” he added.

SOURCE:http://www.philstar.com/Article.aspx?articleId=493657&publicationSubCategoryId=66

gnm

July 31st, 2009, 10:46 AM

guys,

on the 23rd july 2009, credit rating agency moodys raised the rating for goverment issued debt to ba1 from b1. This is only 4 levels below investment grade and is good news for the local economy as it will be easier to find buyers for government bonds and the like. therefore increasing the funds that can be spent.

full article in the link below

http://www.bloomberg.com/apps/news?pid=20601087&sid=aw7Jn42KkP4E

cheers

Go Global

August 6th, 2009, 08:48 PM

OUT OF TOPIC
For Forbeswood Heights BGC residents out there, I'm leasing my Basement 3 parking on a short-term basis. Anyone interested, please send me a PM.

3cr

August 8th, 2009, 02:43 AM

IS IT REALLY OVER?
Oil shares at deepest discount signal recession’s end
Bloomberg Specials
Written by Rita Nazareth & Michael Tsang / Bloomberg News
Tuesday, 21 July 2009

The cheapest valuations in at least 14 years are making oil companies too alluring to pass up for UBS AG and Guggenheim Partners Llc, even though earnings in the industry may fall 48 percent this year. Oil and gas producers in the MSCI World Index traded at $7.84 per dollar of profit this month, less than half the average of $17.10 in the gauge of developed markets and the widest gap since at least 1995, data compiled by Bloomberg show.

UBS, Guggenheim and Cohen & Steers Inc. are buying stocks from Exxon Mobil Corp. to Transocean Ltd. because an economic rebound will lift the industry after it generated at least 50 percent more profits than any other group in the past year.

Recovering energy shares may signal an end to the 41-percent drop in the MSCI World since October 2007 and the first global contraction in six decades. Rallies in oil and gas stocks marked the end of the last five US recessions based on average returns, according to Ned Davis Research Inc.

“Energy will be one of the industries that lead us out,” said Scott Minerd, who oversees more than $100 billion as chief investment officer at Guggenheim in Santa Monica, California. “Shares are cheap and attractive. It’s a very good time for investors to buy the group betting on stronger demand for commodities and a rebound in earnings.”

On Monday, the MSCI World rose 1.3 percent to 995.67, with a measure of energy shares in the index climbing 2 percent. In the US, the Standard & Poor’s 500 Index advanced 1.1 percent to 951.13. Crude oil climbed to a two-week high of $63.98 a barrel on the New York Mercantile Exchange.

Minerd is boosting holdings even as analysts predict the global slump in energy demand will cause per-share earnings at energy companies in the MSCI World to drop to $13.36 from $25.74 in 2008, share-adjusted data compiled by Bloomberg show.

Profits at Exxon Mobil and San Ramon, California-based Chevron Corp., the two biggest US oil companies, and BP Plc, the second-largest in Europe, will fall at least 50 percent, according to per-share estimates compiled by Bloomberg. Exxon and Chevron reported record earnings last year, while BP’s was within 6 percent of an all-time high. Along with Royal Dutch Shell Plc, they made up four of the five most-profitable companies in developed countries during the past 12 months, data compiled by Bloomberg show.

Their shares are trading at the steepest discounts on record because investors are still shocked by the 78-percent plunge in crude prices. While oil is up 44 percent this year, it fell as low as $32.40 a barrel in New York on December 19 from a record $147.27 one year ago.

The Paris-based International Energy Agency estimates that the global recession will slash worldwide oil demand by 2.8 percent this year. Lower profits have prompted the Hague-based Shell, the largest oil company in Europe by market value, to put two refineries in northern Germany up for sale, and it may close or sell another plant in Montreal.

Without increased demand, energy shares won’t beat the stock market’s performance, said E. William Stone, who oversees $96 billion as chief investment strategist at PNC Financial Services Group Inc.’s wealth management unit in Philadelphia.

“Energy shares are not necessarily cheap, especially looking at the past 12 months of earnings,” said Stone. “You’re looking at the rear-view mirror at much higher oil prices. That may mislead you.”

Valuations for energy companies are 54 percent below the average for the MSCI World, almost twice the gap of any other group, according to data compiled by Bloomberg as of last week. On a per-share basis, energy companies generate almost 12 cents in profit for every shareholder dollar, the highest earnings yield among the 10 industries in the MSCI World.

Exxon Mobil made $38.9 billion over the last four quarters and has never traded at a bigger discount to the world index’s average, data compiled by Bloomberg show. The second-largest company by market value fetches 9.35 times earnings, 49 percent less than the average for the benchmark of 23 nations.

Shares of Geneva-based Transocean, the world’s largest offshore driller, are valued at 5.19 times profit, a 72-percent discount to the MSCI World. That’s close to the widest gap since at least 1995, the data show.

Those are bargains, said Mike Ryan, the New York-based head of wealth management research for the Americas at UBS Financial Services Inc., which oversees $590 billion.

“Energy shares were at depressed levels,” said Ryan. “As the economy gains some traction, commodity prices will recover and that will support the energy market and energy stocks.”

UBS Financial, part of Zurich-based UBS, Switzerland’s largest bank by assets, has its biggest “overweight” position in energy stocks, compared with investments in each of the 10 industry groups in the S&P 500, he said.

Faster growth in emerging markets and a recovery in industrialized nations will increase demand, profits and stock prices, said John Praveen, the chief investment strategist at Newark, New Jersey-based Prudential International Investments Advisers Llc, a unit of Prudential, which oversees $542 billion.

The world economy will expand 2.5 percent next year after contracting 1.4 percent in 2009, according to an estimate by the International Monetary Fund on July 8. Emerging and developing economies will grow 1.5 percent this year and 4.7 percent in 2010, the Washington-based lender said. China, the world’s third-largest economy, grew 7.9 percent in the second quarter, the government’s statistics bureau said July 16.

“We’re overweight energy not just based on valuations, but also based on macro factors,” Praveen said. His firm raised its allocation to energy shares last month to “overweight” from “underweight” and likes companies such as Houston-based Halliburton Co., the second-largest oilfield-services provider.

Crude oil will average $85 a barrel next year, according to Morgan Stanley, which lifted its estimate by 31 percent last week. The New York-based bank’s forecast is higher than the fuel has traded in any full year except 2008, when it averaged $99.75, according to data compiled by Bloomberg.

Analysts have increased their 2010 profit estimates for the five largest energy companies in the MSCI World from their April and May troughs, according to data compiled by Bloomberg. The consensus forecast for Irving, Texas-based Exxon Mobil’s 2010 adjusted earnings climbed to $6.04 a share last week from a low of $5.64 in May.

Oil stocks rose for the first time in five weeks in the period ended July 17, jumping 8.4 percent for a gain of 5.6 percent this year. The MSCI World has added 6.8 percent in 2009.

“We’re looking out into next year,” said Richard Helm, Seattle-based portfolio manager at Cohen & Steers, which oversees $16.3 billion. “Given the cash flow they generate and the earnings power that they have, shares are attractively priced here.” Helm bought Exxon stock last quarter, and the company is now the biggest holding in his Cohen & Steers Dividend Value Fund. Cohen & Steers is located in New York.

History shows that energy companies lead the US stock market higher when economic growth resumes.

US oil and gas producers gained 12.6 percent on average in the six months following the end of the past five contractions since 1975, the most among S&P 500 groups, data compiled by Venice, Florida-based Ned Davis Research show.

During the five-year bull market that ended in October 2007, energy stocks posted a total return of 256 percent as oil increased by 222 percent. That outpaced the MSCI World’s 168-percent gain, including dividends.

Dividends in the industry were the highest in five years versus the MSCI World on June 30, with the average company paying 3.44 percent of its share price to stockholders, according to quarterly data compiled by Bloomberg. The yield exceeds the average payout for the world index for the first time since December 2004.

“That’s a big positive” that oil companies are able to maintain their dividends, said Thomas Deser, a Frankfurt-based fund manager at Union Investment, which had about $200 billion as of December 2008 and owns London-based BP, Total SA and Shell. “At the moment, the oil price is lower than it should be. Demand should pick up once the global economy comes back.”

Among nonfinancial companies in the 1,654-stock MSCI World, two—Paris-based Total and Shell—have at least $15 billion in reserves, are valued at less than 10 times earnings and pay at least 5 percent of their share value in dividends, data compiled by Bloomberg show.

Total, Europe’s third-largest oil company, trades for 9.3 times profit, about half the multiple of the MSCI World, data compiled by Bloomberg show. The company has a dividend yield of 5.91 percent.

The yield on London-traded Class A shares of Shell, Europe’s largest supplier, increased to 6.56 percent. Shell’s payout is the highest compared with the MSCI World since at least 2005, according to quarterly data compiled by Bloomberg.

“We’re starting to build back up again,” said Scott Richter, who helps oversee about $20 billion at Fifth Third Asset Management in Cleveland and bought shares of Transocean. “Now is the time to start positioning for the recovery.”

luckyeight

August 11th, 2009, 08:52 AM

It's Still A Terrible Time To Buy
Falling House Prices Are The Solution, Not The Problem
By Patrick Killelea, last updated Wed 17 Jul 2009

House prices will keep falling in most places because those prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's yearly income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the tenant's yearly rent. Yet in coastal areas, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a "bargain" this time last year is already sitting on a very painful loss.

It's still much cheaper to rent than to own the same thing. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6%, so it costs twice as much to borrow money to buy a house than it does to borrow (rent) the house itself. Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is three times the cost of renting. Buying a house is still a very bad deal for the buyer on the coasts, but it does make sense to buy in Michigan and some other places where prices have fallen into line with salaries and rents. Check whether you should rent or buy in your own area with this NY Times calculator.
The bottom will be here when buying a house to rent out clearly makes money. At that point it will be justified to buy because rent can cover the mortgage and all expenses if necessary, eliminating much of the risk. For a rough indication of the wisdom of buying a house, look at the yearly-rent/purchase-price ratio for the model of house in question:

3% = do not buy
6% = borderline
9% = ok to buy

So for example, it's OK to pay $133,000 for a house that would cost you $1,000 per month to rent. That's $12,000 per year in rent, divided by $133,000, so about 9%. But it is foolish to pay $400,000 for that same house, because renting it would cost you only 3% of that per year. Renting in that case means getting the use of the house for free, paying only the property tax and maintenance (which are about 3%).

It's a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. Prices fall as interest rates rise, because a given monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.
It is definitely far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

First of all, your property taxes will be lower with a low purchase price.
Second, a low price gives you the ability to pay it all off instead of being a debt-slave forever.
Third, prices will definitely fall as interest rates rise -- so paying a high price may trap you "under water", meaning you'll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won't be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes this possibility.

The US economy will not recover until house prices are allowed to fall to prices buyers can easily pay on a normal salary. The primary evil in the economy is government "affordability" programs which encourage debt, making prices higher, not lower. True affordability is not more debt -- true affordability is lower prices. The government's false affordability programs have created more debt than can ever possibly be repaid. Credit rating agencies lied about the value of this debt, scaring off investors.
When house prices finally fall to affordable levels, and foolish lenders and foolish borrowers are finally allowed to fail, then the economy will work again: there will be investment based on real production instead of on financial speculation, jobs will be created, and money will be earned and spent. Currently, we have no investment because the government is punishing savers and investors with policies that waste their honestly earned money to cover the foolish gambling losses of others.

Prices disconnected from Gross Domestic Product. The value of housing in the US depends a lot on the value of what the US actually produces. Not only is the GDP decreasing, jobs are being lost in large numbers. It does not make sense to buy when more jobs will be lost and the price people can pay will decrease. Unemployment drives housing prices down. It also does not make sense to buy when your own job is in danger.

Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and Congress is taking a trillion dollars of your money to pay the mortgage investment losses for banks. The plan is to overpay the banks for bad mortgages, claiming that this will support the housing market. It will not work, since bank profits have nothing to do with housing prices. But it has protected Goldman Sachs from losses on their gambles, and even given them record bonuses at taxpayer expense. It is now clear that if you can get your CEO appointed Treasury Secretary, you can easily fleece taxpayers with no public protests.
We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice -- a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the press will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing too much money.

Should taxes be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed or overpaid for a house? Should savers be forced to pay the debts of other people who cannot afford "their homes" no matter what price they paid or how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can to buy a bigger house, and don't pay it back, knowing that Congress will force the real repayment obligation onto others, onto people who are living within their means, so that you can stay in "your home".

Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get.

A return to traditional lending standards means a return to traditional prices, which are far below current prices.

Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.
It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby's corruption of US legislators. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.

Shortage of first-time buyers. From The Herald: "We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don't produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize."
High house prices have been very unfair to new families, especially those with children. It is foolish for them to buy at current prices, yet government leaders never talk about how lower house prices are good for pretty much everyone except bankers, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you'll save more on your next house than you'll lose in selling your current house. Every "affordability" program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac should be completely eliminated, along with the mortgage-interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable and stable housing market because of that.

The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government except Ron Paul ever talks about the obvious solution: less debt and lower house prices. The real result of every "affordability" program is to keep you in debt for the rest of your life so that you have to keep working. Lower house prices would liberate millions of people from decades of labor each. There is never anything in the press about the millions of people that were hurt and continue to be hurt by high house prices.

The government pretends to be interested in affordable housing, but now that housing is becoming affordable, they want to stop it? Their actions speak louder than their words.

Surplus of speculators. Nationally, 25% of houses bought the last few years were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that "Investor-driven price appreciation looms over some housing markets."

Deflation. There is fear of inflation, but it's not likely in the next few years. The actual amount of money created by the Fed lately is a trillion dollars, which sounds huge, but is small compared to the $10 trillion drop in housing "values" and another $10 trillion drop in stock market capitalization. The US government will not print extreme amounts of cash like Zimbabwe did, because significant inflation would mean that foreigners would no longer lend money to the US government unless interest rates were much higher to compensate them for inflation losses. Higher interest rates would push more people with adjustable mortgages over the edge. The most likely scenario is like Japan: low inflation and low interest rates, with falling house prices for years to come.

Fraud. It was common for speculators take out a loan for up to 50% more than the price of the house. The appraiser went along with the inflated price, or he did not ever get called back to do another appraisal. The speculator then paid the seller his asking price (much less than the loan amount), and used the extra money to make mortgage payments on the unreasonably large mortgage until he could find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn't work at all, unless the speculator simply skips town with the extra money.

Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.

Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.

Failure to re-regulate finance. The Graham, Leach, Bliley Act did away with the depression-era safety constraints placed on banks. This paved the way for record profits in the finance industry and an effective takeover of the US government by large banks, which has not yet been reversed.

The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

3cr

August 12th, 2009, 03:53 AM

Forecast more likely due to China outlook and not necessarily the US...

Goldman Sachs raises Asia, China GDP forecasts
Mon Aug 10, 2009 5:06am EDT
http://www.reuters.com/article/economicNews/idUSPEK24126820090810

BEIJING, Aug 10 (Reuters) - Goldman Sachs (GS.N) on Monday raised its forecast for Asian economic growth this year and next based on a stronger outlook for the United States and China.

The bank revised its projections for gross domestic product growth in Asia ex-Japan, which were already above consensus, to 5.6 percent from 4.9 percent this year and to 8.6 percent from 7.8 percent in 2010.

Goldman said Asia would benefit from strength in China, which it now expects to grow 9.4 percent this year and 11.9 percent in 2010. Previously the bank had forecast 8.3 percent and 10.9 percent, respectively.

Explaining its upgrade, Goldman said Chinese growth momentum remained strong and policy tightening was behind the curve.

Michael Buchanan, the bank's chief economist for non-Japan Asia, said the National Development and Reform Commission and the State Council, China's cabinet, remained very cautious about any significant tightening.

"We believe policymakers will only choose to tighten more dramatically via significant hikes in policy rates once the consequences of above-trend growth become obvious (i.e., actual inflation or supply bottlenecks or significant asset price bubbles)," he said in a report.

This may mean that increases in interest rates will not come until next year, perhaps after discussions at December's annual economic policy-setting meeting, Buchanan added.

Premier Wen Jiabao said at the weekend that Beijing would stick to an appropriately loose monetary stance and proactive fiscal policy to achieve its goal of 8 percent GDP growth this year. [ID:nPEK220133]

That target looked out of reach until data for the second quarter started to show the impact of the government's 4 trillion yuan ($585 billion) stimulus spending and a record burst of lending by China's mainly state-owned banks.

Goldman said Asia would also draw strength from a rosier outlook in the United States.

The bank raised its 2009 GDP forecasts for Hong Kong, Malaysia, the Philippines, Singapore, South Korea and Taiwan, but kept its projections for Indonesia, Thailand and India unchanged.

(Reporting by Alan Wheatley; Editing by Ken Wills and Chris Lewis

___________________________

Asia's Economies: From slump to jump
From The Economist
http://www.economist.com/world/asia/displayStory.cfm?story_id=14133744

EARLY this year Asia’s economies were falling shockingly fast; now they are rebounding even more strongly than expected...

Asia's year-on-year growth rates conceal this bounce; to spot the turning-point, look at quarterly changes. Comparing the second quarter with the first at an annualised rate, South Korea’s GDP grew by almost 10% (though it is still down 2.5% on a year earlier); Singapore’s soared by 20% (3.7% down on the year). China does not publish quarterly figures, but economists think its GDP jumped by an annualised 15-17%.

Other economies in the region have yet to publish their GDP numbers, but they are also likely to show a rebound. During the second quarter, Taiwan’s industrial production jumped by an annualised 89%. Even Japan may have enjoyed robust GDP growth; its industrial production rose by an annualised 38%. In contrast, America and Europe probably saw their economies contract during the quarter.

Quarterly growth rates are likely to moderate in the second half of this year. Singapore’s bounce, for example, was partly due to a big increase in pharmaceuticals production, which is notoriously volatile. Nevertheless, Asia’s recovery is on track. Peter Redward, an economist at Barclays Capital, expects average GDP growth in emerging Asia of almost 5% in 2009 as a whole. Meanwhile, the G7 economies are likely to contract by perhaps 3.5% this year. That growth gap of 8.5 percentage points would be the biggest on record.

Six months ago the Asian economies were among the hardest hit in the world, as exports to the rich world plunged. How can they be bouncing back when demand in America and Europe remains feeble? One reason is that the plunge in output in late 2008 and early this year was exacerbated by massive destocking (companies were living off their existing supplies). With stocks now lean, orders are picking up and factories have started to hum again. Even more important, domestic demand has rebounded, thanks to the biggest fiscal stimulus of any region of the world. South Korea’s real consumer spending rose at an annualised rate of 14% in the second quarter, spurred by a tax cut on car purchases and support for low-income families. Its exports also surged, by an annualised 53%, partly thanks to strong Chinese demand.

Sceptics argue that China alone cannot ignite economic recovery across the region because a large portion of Asia’s exports to China are just intermediate goods, which are processed into exports to developed economies. The Asian Development Bank calculates that 60% of the region’s exports eventually end up in the rich world. However, this ignores the huge boost that China’s rebound is giving to business and consumer confidence across the region.

If the West continues to sputter, what happens when Asia’s fiscal stimulus and restocking fade? A recent report by Frederic Neumann and Robert Prior-Wandesforde at HSBC argues that Asia’s recovery will be sustained well into next year, thanks to loose monetary policies. Unlike in America and Europe, where crippled banking systems and high debts blunt the impact of low interest rates, Asia, especially China, is awash with liquidity, which will support domestic spending.

Perhaps the main risk now facing emerging Asia is not feeble demand in the West but inflation or asset-price bubbles at home. The Reserve Bank of India has raised its inflation forecast for this year to 5%, well above its target of 3%. China’s banking regulator has ordered banks to stick to the rules on mortgages and make sure lending goes into the real economy, not shares. If America’s Fed had done this and worried a bit more about bubbles, the world might not be in such a mess.

3cr

August 12th, 2009, 04:15 AM

The sun also rises
Aug 6th 2009 | WASHINGTON, DC
From The Economist
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=14177443

The economy may be showing signs of pulling out of recession but unemployment is still surprisingly high. Celebrations should be delayed...

WHEN Barack Obama visited Elkhart, Indiana, in early February, a few weeks after his inauguration, it was a sombre affair. In the previous 12 months the area’s unemployment rate had more than tripled to 18.3 %. The president pleaded for the passage of a massive fiscal stimulus, insisting that “doing nothing is not an option.” By the time he returned to Elkhart on August 5th he was quite a bit sunnier. Local factories are “coming back to life”, he proclaimed. A few days earlier he had declared the economy to have done “measurably better” than expected.

Mr Obama’s good spirits are well grounded: America’s recession appears to be coming to an end. On July 31st the government reported that real gross domestic product (GDP) contracted in the second quarter, but at only a 1% annual rate. Much of that decline reflected business’s determination to keep factories and workers idle and fill new orders out of existing inventory. Now, stocks are so depleted that production will soon have to restart.

The clutch of data now available for July has strengthened expectations that GDP will rise in the current quarter by as much as 3%. An index of manufacturing activity rose to its highest level since last August, and manufacturers reported that new orders were growing briskly, the best in over two years. Car sales jumped 15% to an annualised 11.2m and manufacturers are ramping up production. Sales of existing houses have risen. Even battered Elkhart got some good news: on August 4th Dometic, a supplier of recreational-vehicle parts, said that with some help from local incentives it would add 240 jobs to its operation in the town.

Mr Obama and his aides have wasted no time in crediting the $787 billion fiscal stimulus for spurring this recovery. In fact the stimulus’s contribution so far has been relatively modest. More important was last autumn’s massive injection of public capital, loans and loan guarantees into the financial system, and this spring’s bank stress tests. These stopped the spiral of declining asset prices, credit withdrawals and bank failures that had threatened to turn a recession into a depression.

One of the most encouraging bits of news is that the S&P/Case-Shiller 20-city index of house prices fell just 0.2% between April and May, the smallest fall in two years. Stable house prices would do wonders in reducing loan delinquencies, shoring up the banks’ balance-sheets and restoring the flow of credit.

Despite the good news, Mr Obama’s approval ratings, though high, are slipping. This, in part, is because the single most important economic benchmark, employment, remains grim, surprisingly so. Unemployment usually responds to economic growth in a relationship that was captured by an economist, Arthur Okun, in the 1960s. But it has risen more during this recession than most formulations of Okun’s Law would suggest.

The publication last week of revisions to earlier GDP data explains some of the discrepancy. The revisions show that GDP has declined a cumulative 3.7% since the end of 2007, thus tying with 1957-58 as the deepest recession since the Depression (before these revisions, the decline was shown to be 2.5%). Even so, Michael Feroli, an economist at JPMorgan Chase, says that Okun’s Law would have predicted an unemployment rate of just 8.6% during the second quarter, whereas it actually averaged 9.3%.

Several factors are at work. Expanded unemployment-insurance benefits encourage some workers to keep looking for a job rather than drop out of the workforce altogether, adding perhaps half a percentage point to the unemployment rate, according to the Fed. The evisceration of their wealth may have led people to look for work rather than retire or stay at home with the children.

And firms have been unusually quick to slash payrolls. Some may be husbanding cash more carefully because of the credit crunch. Others may simply be more pessimistic about an eventual recovery. Whatever the reason, one result is that productivity is rising, cushioning profit margins. Robert Hall of Stanford University, who heads the academic committee that dates recessions, says Okun devised his law in an era when productivity usually fell during recessions: “When productivity rises, the law fails. Though I was a great fan of Okun’s, I’m afraid his law is obsolete.”

The difference with Europe is especially striking. In the euro zone GDP has fallen further than in America but unemployment has risen less (see chart). Employers are slower to sack workers than in America, partly thanks to government subsidies that encourage them to shorten working hours instead (see article). This means that European unemployment will probably be slow to fall once GDP recovers.

But it looks as if it will be slow to come down in America as well. Firms are unlikely to do much hiring until growth seems durable, and so far it does not. Replenishing inventory will be a temporary fillip without an increase in consumer demand. Car sales have been strong in great part because of the federal cash-for-clunkers programme, which allows Americans to get up to $4,500 for their old car when they exchange it for a new one. The programme was supposed to run until November 1st but its $1 billion was snapped up within days of its start on July 24th. The House of Representatives has voted for an extra $2 billion and at mid-week the Senate was expected to do likewise. But cars bought now may mean fewer cars bought later.

If growth peters out again later this year, it will dash the expectations Mr Obama has done so much to raise by touting his stimulus. Dick Moore, Elkhart’s mayor, has been so enthusiastic about federal support that some county officials harrumph that he sleeps in Obama pyjamas. Though the president obligingly promised $39m for a local unit of Navistar to make electric trucks, it will take time for the firm to scale up production and hire workers. Meanwhile, Dorinda Heiden-Guss, who heads the county’s economic-development group, has been barraged with requests from companies seeking incentives. But many of them do so without a semblance of a business plan.

Another caveat: all numbers are subject to revision, perhaps years later. Even the Depression is getting worse. According to the latest revisions, GDP fell 26.7% between 1929 and 1933: the pre-revision figure was a mere 26.6%. Today’s green shoots could still be revised away.

___________________________

U.S. economy on brink of recovery
Business Mirror
Tuesday, 11 August 2009
http://www.businessmirror.com.ph/home/world/14413-us-economy-on-brink-of-recovery.html

The US economy may be on the cusp of a recovery and the impact of the nation’s stimulus plan should increase this quarter, said Laura Tyson, an adviser to President Barack Obama.

“We may have hit stability, we may be in the beginning of an upturn” based on the latest economic data, Tyson, a member of the White House’s Economic Recovery Advisory Board, said yesterday during an interview in Kuala Lumpur. Nobel Prize-winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.

“It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, maybe on September,” Krugman said in a separate interview in the Malaysian capital. “My guess is that we’ve bottomed out now, that August was probably the trough month.”

Krugman, 56, cited last week’s government report showing that the pace of US job losses slowed more than forecast in July and the unemployment rate dropped for the first time in 15 months. He also pointed to reports by the Institute of Supply Management that manufacturing, while still contracting, is on the mend.

Tyson, 62, cautioned that declining housing values and an overhang of unsold homes pose threats to a recovery, and it’s too early to say the jobs report is the beginning of a trend.

“We’ve had one number that’s been slightly stronger than expected,” she said. “It’s pretty hard to read a single month as creating a trend. Most of the forecasts are still that the unemployment rate rises through till the end of the year.”

US payrolls fell by 247,000 in July, after a 443,000 loss in June. The jobless rate unexpectedly dropped to 9.4 percent from 9.5 percent. Obama said last week that the unemployment numbers indicate “the worst may be behind us.”

The report propelled the Standard & Poor’s 500 Index above 1,000 for the first time since November as US stocks rose for a fourth week. The S&P 500 rose 2.3 percent to 1,010.48, the highest since October 6. The Dow Jones Industrial Average climbed 198.46 points, or 2.2 percent, to 9,370.07.

The August 7 Department of Labor report came a week after the Department of Commerce said US gross domestic product shrank at a better-than-forecast one percent annual pace in the second quarter after a 6.4-percent drop in the prior three months.

There’s no reason for a second stimulus package now, Tyson said in the interview. She suggested on July 7 the United States should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small.” She told CNBC three days later that it’s premature to plan for a second stimulus package.

“We know that relative to plan, the stimulus package in place is performing along expectations,” Tyson said yesterday. “Right now, based on the evidence that the economy has put forward and the stimulus spend out relative to plan, there isn’t any reason to think about a next round.”

Policymakers may want to consider doing more for unemployed Americans, Tyson said. Employers have eliminated about 6.7 million jobs since the recession began in December 2007, the most since the Great Depression.

Congress will consider extending unemployment benefits next month when lawmakers return from their August recess, Majority Leader Harry Reid said on August 7. The Senate’s top Democrat said 1.5 million Americans may exhaust their benefits by the end of the year if Congress doesn’t act.

“That could be considered as a second stimulus or it could be considered as an extension of unemployment compensation,” said Tyson, a professor at the University of California’s Walter A. Haas School of Business, who was an adviser to Obama during last year’s presidential campaign.

Krugman, a Princeton University economist, said the stimulus plan probably saved one million jobs. He said a second package is needed and should be directed at state and local governments as well as spending on construction projects.

The US economy may be the first after Asia to “take off,” said Raghuram Rajan, the former chief economist of the International Monetary Fund who’s now a professor at the University of Chicago.

“Unemployment may continue rising and job losses may continue, but growth will start picking up in the US,” Rajan, 46, said in an interview. “We will get a few quarters of rebound growth.”

Krugman, Tyson and Rajan were in Kuala Lumpur for the World Capital Markets Symposium. (Bloomberg)

RickyM

August 12th, 2009, 08:24 AM

G&W is now asking 750k for a basement 5 parking slot sa BGC. Supply and demand maybe, but ridiculous because it was 500k a few months ago.

sloanesquare

August 12th, 2009, 10:38 AM

soon a Fort car space will be worth more than an older 25 sqm condo in makati

Retro

August 12th, 2009, 03:16 PM

G&W is now asking 750k for a basement 5 parking slot sa BGC. Supply and demand maybe, but ridiculous because it was 500k a few months ago.

Wow ang bilis naman ng jump ng parking price from 500K to 750k. It just to show lang na malapit na rin mag-adjust ng public parking rate specially around Crescent Park area where most offices are located :ohno:

3cr

August 13th, 2009, 02:57 AM

US has entered recovery stage, survey shows
Business Mirror
Thursday, 13 August 2009
http://www.businessmirror.com.ph/home/world/14548-us-has-entered-recovery-survey-shows-.html

RECOVERY from the worst recession since the 1930s has begun as President Barack Obama’s fiscal stimulus—derided as insufficient and budget-busting months ago—takes effect, a survey of economists indicated.

The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.

“We’ve averted the worst, and there are clear signs the stimulus is working,” said Kenneth Goldstein, an economist at the Conference Board in New York.

The new projections, following better-than-anticipated reports on manufacturing, employment and home construction, echo gains in investor confidence that have propelled the Standard & Poor’s 500 Stock Index to its high for the year. A rebound may help cushion declines in Obama’s approval ratings, political analysts said.

“The fact that people for the first time in over a year are starting to look at some glimmers of hope plays to the prospect of some strength in the stimulus,” said Susan Molinari, a Republican strategist in Washington who advised Rudy Giuliani during his presidential nomination campaign in 2008.

The anticipated expansion in the coming year won’t be enough to prevent the unemployment rate from reaching 10 percent for the first time since 1983, the survey also showed. That will force the Federal Reserve to forego raising its benchmark interest rate until the third quarter of 2010, according to the median projection.

The Fed’s policy-setting Open Market Committee will today keep the target rate at zero to 0.25 percent and retain plans to buy as much as $1.45 trillion of housing debt by year-end to help secure a recovery, analysts said. The FOMC’s statement is expected at about 2:15 p.m. in Washington.

Obama’s $787-billion economic recovery effort, spanning tax cuts, infrastructure spending and a goal to create or save 3.5 million jobs, was enacted about six months ago. Republican lawmakers, nearly all of whom voted against the package, have pilloried the plan as a waste of money.

“Trillions more in Washington spending will not end a recession, it only puts future generations under a mountain of unsustainable debt,” House Minority Leader John Boehner, an Ohio Republican, said last week. The nonpartisan Congressional Budget Office estimated last week that the stimulus has pumped $125 billion into the economy so far.

A federal program to replace older vehicles with more fuel-efficient ones helped boost sales of cars and light trucks last month to the highest level since September, according to industry figures. Automakers, operating with lean inventories, will resume output to meet the jump in demand.

“Cash-for-clunkers was the icing on the cake,” said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. “It’s well-timed stimulus syncing with cyclical forces leading to a ramping up of production.”

Company heads seeing an improvement include David Weidman, chief executive officer of Dallas-based chemical maker Celanese Corp. “We exited the quarter with increasing optimism,” and there are “clear signs of economic recovery,” Weidman said in an interview in July.

“The stimulus was really a long-term political and economic play by the administration, and now they’re starting to see the results they wanted,” said Bill Buck, a Democratic strategist who worked on the presidential campaigns of former Vice President Al Gore and retired General Wesley Clark. “The administration would be wise to use this to build their credibility with the public” on other issues like health care, he said.

The president’s approval rating is falling on concern over rising joblessness and the growing budget deficit, a Quinnipiac University poll showed last week.

Half of the registered voters surveyed from July 27 to August 3 by Quinnipiac said they approve of the job Obama is doing, compared with 42 percent who disapprove. That’s down from 57 percent approval and 33 percent disapproval in a late June poll.

Americans are hurting as employers continue to cut jobs, albeit at a slower pace. The unemployment rate will average 9.8 percent in 2010, according to the Bloomberg survey taken from August 5 to August 11.

“The labor market is going to be the key,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. “The risk isn’t that it gets much worse, but that it doesn’t improve quickly enough. It’d be nice if the consumer found his legs.”

Consumer spending, which accounts for about 70 percent of the economy, will rise an average 1.5 percent from July to December, up from prior estimates, the survey showed.

“What’s happening now is a leveling off, not a strong increase in growth, and that owes a little to the stimulus package,” said Robert Solow, a Nobel laureate and professor emeritus at the Massachusetts Institute of Technology in Cambridge, Massachusetts. “Seeing the rest of it filter through to the economy in the second half of the year will be extremely helpful.” (Bloomberg)

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Fed focusing on real-estate as FOMC meets
Bloomberg Specials
Written by Scott Lanman / Bloomberg News
Tuesday, 11 August 2009
http://www.businessmirror.com.ph/home/bloomberg-specials/14452-fed-focusing-on-real-estate-recession-as-fomc-meets-.html

The collapse in commercial real estate is preventing Federal Reserve chairman Ben S. Bernanke from declaring the economy and financial markets are healed. Property values have fallen 35 percent since October 2007, according to Moody’s Investors Service.

That’s making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls and hotels this year, pressuring companies such as Maguire Properties Inc., the largest office landlord in downtown Los Angeles, to put buildings up for sale.

The industry is likely to be high on the agenda when Bernanke and his colleagues sit down in Washington on Tuesday for the Federal Open Market Committee meeting on monetary policy. Lawmakers including Barney Frank and Carolyn Maloney are pushing the central bank to extend an aid program designed to restore the flow of credit.

If nonresidential real estate remains in the doldrums, the Fed may be forced to leave emergency-lending programs in place and keep its benchmark interest rate close to zero for longer than some investors expect, given positive signs elsewhere in the economy.

Commercial property is “certainly going to be a significant drag” on growth, said Dean Maki, a former Fed researcher who is now chief US economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays Plc. “The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis.”

The Fed is “paying very close attention,” Bernanke told the Senate Banking Committee on July 22, the second of two days of semiannual monetary-policy testimony before the House and Senate. “As the recession’s gotten worse in the last six months or so, we’re seeing increased vacancy, declining rents, falling prices, and so, more pressure on commercial real estate.”

The pressure may be easing in other areas of the economy. Gross domestic product shrank at a better-than-forecast 1-percent annual pace in the second quarter after a 6.4-percent drop the prior three months, and residential housing starts rose unexpectedly by 3.6 percent in June as construction of single-family dwellings jumped by the most since 2004, according to data from the Commerce Department.

Employers cut fewer workers than anticipated last month as the jobless rate fell to 9.4 percent from 9.5 percent in June—the first decline since April 2008, based on Labor Department figures.

Amid such glimmers of improvement, commercial real estate is a “particular danger zone,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a July 28 speech in Coeur d’Alene, Idaho. The market may be “under stress for some considerable period of time,” William Dudley, chief of the New York Fed bank, said the following day in New York.