Utilities & Mobile Noreco ii rates for August

No they haven't been announced yet but it looks very likely that they'll follow suit after Noreco I announced that their rate for August will increase to 15.1 peso per kWh, a 12% increase compared to last month. This doesn't bode well at all.
At the same time the peso is at a record low today against dollar, euro and pound. Going forward that will cause higher prices for everything that is imported, oil, diesel and even rice. Electricity rates will also be affected.

 

As you know (I am not going to teach you finance!), this will particularly hurt the citizens - anyone lucky enough to be bringing money in from abroad to pay their cost of living here is being 'compensated' by the fall in the peso.

I read so much now of an imminent financial crisis that could dwarf 2008 and even 1929. However, I have been reading that for some time - eventually the 'experts' will get it right.

Add to that (yes, I am Mr. Pessimistic) the effects of El Niño on the Philippines now and into 2027 and I think this will affect food crops to a high degree. Latest indications are this could be the strongest El Niño for 500-1000 years.

Would you suggest it is best to be in cash now? Remember the huge falls in property values in Japan (also now China) and the 'haircuts' to bank accounts in Greece and Cyprus - plus Russians are now withdrawing money from banks for fear of a visit from Barber Putin.

 

My impression with regard to a next financial crisis is that the build-up of government debt in the usa is very close to becoming unmanageable. The current strong increase in debt coincides with diminished appetite to buy us treasuries from foreign parties, so it's leading to additional upward pressure on interest rates in the US, further execerbating the pressure from the inflation front. Obviously if both the debt and the interest rate goes up then the debt servicing cost as part of the government budget can quickly get out of hand. The interest payments alone are running at around 3 billion usd per day already, or 1.1 trillion per year, the second highest expense in the entire budget.
But yeah that's what you get in a country that loves to spend money but not raize adequate taxes. Ultimately that ship will obviously run aground, but it's difficult to predict when.
To illustrate, just look at Japan, which has a debt to gdp ratio about double the one in the US. It makes a big difference how government debt is financed though, in other words who holds that debt.

As far as the El Nino front, so far this year it seems that the incessant stream of storms/typhoons is persistently being pushed on a northern path toward Taiwan/Japan/China rather than threatening the Philippines directly. On the other hand I do read about drought conditions threatening the rice harvest in exporting countries like Vietnam. That's not a good development from a Filipino view.

I would say that overall it seems likely for peso weakness to continue. Inflation will be difficult to bring down, which also means I don't see property values in the Philippines going down. That doesn't mean that a local market can't suffer anyway of course, if demand falters for whatever reason prices may well come down.