Philippine economy dives into recession in worst slump on record

[OnMyWay]

51 minutes ago, RBM said:

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

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

Just a theory, but the very poorest people in the economy just go on doing what they are doing to survive.  They may be hit because charitable gifts to them will dry up.

People in lower middle class who lose their jobs will get by for a while.  That segment will start to hurt more and more as time passes, but they probably have the capacity to survive by falling back on family members, etc.

Middle-upper classes have more capacity to get by and are least likely to lose their jobs, yet.

I'm worried that the OFW impact has not hit yet.  That could be big.

[Dave Hounddriver]

48 minutes ago, OnMyWay said:

No, it is p500,000 per depositor per bank.  For joint accounts, it is a bit more complicated.  They have examples here.  Click on "Illustrative Cases" on the left.

You are correct in that but it gets worse, or at least it did 10 years ago.  When 10 banks went under at the same time, all owned by the same company, they were treated as one bank so people who spread their money around to the 10 bank only got the PDIC once.

Additionally, those who put in (for example) 1 million pesos and then subsequently withdrew 500,000 were said to have already got the max back  so they lost the 500K they left in there.  We can only hope things have improved since then.

For those unfamiliar, there are Rural Banks going broke every month.  Those are the banks that generally pay high interest rates and those are the ones the PDIC judges extremely harshly.

[Gas]

58 minutes ago, OnMyWay said:

No, it is p500,000 per depositor per bank.  For joint accounts, it is a bit more complicated.  They have examples here.  Click on "Illustrative Cases" on the left.

http://www.pdic.gov.ph/depositinsurance

No joints accounts are insured separately. 
 

1. A joint account regardless of whether the conjunction "and", "or", "and/or" is used, shall be insured separately from any individually-owned deposit account/s.
    
2. If the account is held jointly by two or more natural persons, or by two or more juridical persons or entities, the maximum insured deposit shall be divided into as many equal shares as there are individuals, juridical person or entities, unless a different sharing is stipulated in the document of deposit.
    
3. If the account is held by a juridical person or entity jointly with one or more natural persons, the maximum insured deposit shall be presumed to belong entirely to such juridical person or entity.
4. http://www.pdic.gov.ph/di_howtofileclaims_j

[Gas]

8 minutes ago, Dave Hounddriver said:

You are correct in that but it gets worse, or at least it did 10 years ago.  When 10 banks went under at the same time, all owned by the same company, they were treated as one bank so people who spread their money around to the 10 bank only got the PDIC once.

Additionally, those who put in (for example) 1 million pesos and then subsequently withdrew 500,000 were said to have already got the max back  so they lost the 500K they left in there.  We can only hope things have improved since then.

For those unfamiliar, there are Rural Banks going broke every month.  Those are the banks that generally pay high interest rates and those are the ones the PDIC judges extremely harshly.

That whole thing was a scam from the start. Anybody with half a brain knew that from the start. Funny thing is a lot of greedy expats fell for it. 

Edited August 7, 2020 by Gas

[scott h]

52 minutes ago, OnMyWay said:

People in lower middle class who lose their jobs will get by for a while.

One thing we tend to forget is that most (not all) folks either own their homes or still live as a large single family unit (another reason for the huge spread). So they do not have mortgage payments. Dont know but i bet you were like me where rent and then mortgage was a BIG slice of my monthly check.

And those that are renting,,,,,well it is harder to evict folks here than it is in California  

[BrettGC]

I just wonder when the OFW money is going to dry up.  Anecdotally hordes have returned home to PI since this all started and, as someone previously stated, in normal times their remittances are a huge part of the economy.

The flow-on effect of course is that their employers are either going without the cheap labour, in whatever sector, or hiring locally at higher rates.  I know in Australia, there's a desperate shortage of agricultural workers that is normally filled with overseas labour by international employment agencies, some reputable, others not so much, but that's another discussion.  

OFW's and other overseas workers contribute to economies all over the world by both being cheaper labour and/or spending in the country they work in, obviously some countries more than others. 

[scott h]

13 minutes ago, BrettGC said:

in normal times their remittances are a huge part of the economy.

i just did a quick search and one article said 10% of GDP, then you start to figure all the down stream secondary economic impacts 

[Snowy79]

The peso from my point of view is going to go into freefall.  It was sitting strong for a bit as all the OFW were drawing their savings out to cover family members. This to the super computers that run the stock exchange made it look like the peso was in demand which automatically values it high.  I'm see it lose quite a bit of value in the last few days, it was sitting about 61 peso to the £1 now it's 64.39.  Good if you're on a pension but let's see what it does to inflation.

[OnMyWay]

52 minutes ago, Gas said:

No joints accounts are insured separately. 
 

1. A joint account regardless of whether the conjunction "and", "or", "and/or" is used, shall be insured separately from any individually-owned deposit account/s.
    
2. If the account is held jointly by two or more natural persons, or by two or more juridical persons or entities, the maximum insured deposit shall be divided into as many equal shares as there are individuals, juridical person or entities, unless a different sharing is stipulated in the document of deposit.
    
3. If the account is held by a juridical person or entity jointly with one or more natural persons, the maximum insured deposit shall be presumed to belong entirely to such juridical person or entity.
4. http://www.pdic.gov.ph/di_howtofileclaims_j

Yes, joint "accounts" are insured separately from the single accounts, but it is all done by "depositor", not by account.

John and Judy Joint Accounts is one "depositor"

John alone is one "depositor"

Judy alone is one "depositor"

Each of those would have 500,000 insurance each for the total of the accounts in that name. 

You can't combine those for insurance purposes.  You might think that total insurance is for those 3 accounts is 1,500,000.  For instance:

John and Judy Joint  Savings Balance 400,000

John and Judy Joint Checking Balance   300,000

John and Judy Total  700,000.  500,000 is covered, 200,000 is not covered.

John single account balance is 100,000  Covered is 100,000 (up to 500,000)

Judy single account balance is 200,000,  Covered is 200,000 (up to 500,000)

John single and Judy single have unused insurance balance, but it can't be used for John and Judy Joint

 

[hk blues]

I don't believe the peso is holding up particularly well or badly at the moment.  Many posters are using the decline in the USD to peso as a general indication of the peso's performance - I think it's simply a reflection of a weakening of the USD for obvious reasons.  The GBP has risen about 5% against the peso in the last couple of weeks despite the ongoing Brexit woes, the Covid-19 impact etc - I would put this down to a weakening of the peso rather than a strengthening of the GBP.