"Ninjas No Income, No Jobs or Assets.

The amazing thing about the Philippines is the very "plastic" (credit) society it is.  (I do recognize that is a problem world wide.)

Most of the cars and homes are on loans' from banks and finance companies.   There bubble has to burst one day, COVID will double the damage if it comes during the next 12 months.

Having said that the banks and lenders (and governments) will not want people to go bankrupt and or foreclose on there loans.  The banks and finance organization in effect "own" the houses and cars, and they will have no one to sell them to, so if it fails, it will fail big time. 

I know i have said it before, but i don't think some of he banks will be able to remain solvent.  When the assets they hold through there borrowers depreciate so much it makes the banks insolvent, and as such they will close down. 

The GFC will look like a small pip on the scale of what might come, remember how the big banks,  Bear Stearns, Citibank, and Lehman Brothers were lending loans on properties that had little or no value (Subprime Mortgages) and in the end it showed on there balance sheet's and fail these banks did fail.  Then the GFC all came out of America, this time it could be world wide.

One thing that still amazes me is the pensions that are paid to Government workers here, Judges, political staff, teachers, nurses and Dr's in public hospitals, and solders, and police and fireman.  Every developed country and recognized that the cannot pay out pension like the do here in the Philippines, which developed countries used to. 

The problem is I don't think that without a Bipartisanship agreement that no government would dare touch these pensions.

Yet every day the Government pays out  millions of PHP to the pensioners.  (millions is a guess, try finding out how much is actually paid out is near on impossible), and every year that figure get's bigger and bigger with the ageing population (and pay rises given to the government workers) of those on these pensions, the Government has to keep finding money to fund these pensions.  The people with money can access the better health services, and healthier food they will live even longer.  Every year in the Philippines  the life of someone here increases by 0.2% (approximate) so each 10 year period people will live 1 year longer.  That is the problem the governments will face in funding these pensions.  People live longer and more money the governments will need to fund these people in retirement.


One other point is  what will happen to the inflation rate in the Philippines and directly for us our currency exchange rates?

The PSEi is down nearly 25% for the year, second largest decrease in the ASIAN markets.