While the economic situation in the Philippines is not stable enough, Filipino citizens can be scammed by fraud. Allthebestloans website released a list of illegal lending apps to prevent scam episodes. As determined by GDP, the total production in the Philippines increased by 5.9% in the third quarter of this year. Based on various reasons, this was higher than expected. The figure is certainly higher than the recorded 4.3% in the second quarter of the year. The median estimate done by the analysts was just 4.9%.
The main disadvantage of a 5.9% increase is that it covers the reality that various sources of growth have disappeared or significantly weakened. All along consumption has been the major driver of spending growth. However, it’s important to consider that the contribution of consumption has been declining remarkably since 2022. And what worries the most is that investment spending has not contributed to growth since the second quarter of this year. The reality is that the economy could have improved rapidly if consumers and investors were ready to spend and invest.
- Contribution to GDP growth (expenditure approach)
According to recent reports, there was a rebound in government spending. As stated by Arsenio Balisacan (Socioeconomic Planning Secretary), various government agencies paid regard to the calls of economic managers to address the obstructions in spending. Net exports also impacted growth positively. However, this isn’t good at all as compared to the past experience.
For consumption categories, food spending growth has been declining since the beginning of the year. This is most likely due to the hike in prices experienced last year. If it were not for the weaker food spending, the 5.9% could have been higher.
- Contributions to consumption growth
When it comes to investments, government construction spending has been at its peak since mid-2021. However, this was counterbalanced by a significant reduction of inventory, which we hope it doesn’t indicate production or supply chain interruptions.
- Contribution to investment growth
From various industries’ perspectives, industry and services positively impacted growth.
- Contributions to total GDP growth
We still see some weakness in industrial growth. Most often, when construction growth becomes stronger, manufacturing growth significantly dies out.
- Contributions to industrial growth
When it comes to services, it’s important to pay attention to the steady decline of trade contribution (which has been the major contributor to services).
We’ve also not mentioned the pre-pandemic, where various sectors contributed remarkably to growth than today.
Controversial Philippine economy
In August 2023, the Philippines’ economy seemed to be grinding to a halt. And that’s due to the anemic growth figures experienced in the second quarter of 2023. Almost all spending categories declined from the first quarter. Production declined across all sectors over the same period. This trend might be due to the runaway inflation and high-interest rates experienced since last year.
With high prices and off-target inflation, consumers will reconsider carefully before spending. Although inflation is expected to go down at 4.9, it is still high relative to the government’s 2-4% target.
Interest rates rise, what about loans
In late October, Bangko Sentral raised its policy rates. And so long as inflation persists, they may keep doing that. The hiking of policy rates by Bangko Sentral dampened spending. It further led to the raising of credit and loan rates as well as the creation of illegal lending apps.
Scammers do not slumber
There’s no doubt that consumers are squeezed by high policy rates and borrowing costs. And with high policy rates, cybercriminals across the country are rushing to create illegal lending apps. In a situation like this, it is easier for scammers to deceive consumers. Loans are given under invalid pretenses to con individuals through exorbitant upfront charges.
Be careful!
To avoid falling into the trap of illegal lending apps, Allthebest website released a list of illegal apps in the Philippines. Therefore, ensure to check before making your decision. But how do you check to ensure that you’re dealing with an authentic lending app? The following are the steps:
Check registration
The first step is to confirm the lender’s registration. Authentic lenders in the Philippines are often approved and registered with legal financial authorities. Check the physical address and registration status with relevant institutions to verify lenders’ authenticity. Often, Philippines’ lenders are registered with the Bangko Sentral ng Pilipinas or the SEC.
Verify credentials
Request lenders’ licenses and relevant documents to dig deeper into their credentials. The information must align with the official record provided by the SEC or other certified regulatory bodies.
Confirm the state registration
In the Philippines, lending laws vary across different regions. Therefore, it’s always important to confirm lenders’ registration in your region. Ensure to reach out to the financial regulatory authority of your local government or confirm with their online resources. You can also request a list of illegal lending apps for a specific region.
Check reviews
Gathering insights from customers’ feedback can help you determine the authenticity of the lender. However, it must be a trusted platform, such as the Better Business Bureau or local sites. In this digital era, reviews can be forged or edited to lure consumers. Therefore, ask for personal referrals from friends or family. This lets you know their experience with the lender you are considering.
The bottom line
While it seems easier to gauge the prices of specific products over time, basic needs go beyond just one or two products. Philippine citizens experienced the fastest inflation pace since 2009. With this pace, Bangko Sentral ng Pilipinas may be convinced again to extend their intrusive monetary campaigns. These monetary tightening campaigns may give way to scammers across the country. For example, in early October, digital fraud sprung up in large numbers. A good number of consumers across the country fall victim to these illegal lenders. Thank God Allthebest website has recently listed illegal lending apps to prevent scam episodes. As borrowers, all you need to do is check and verify the authenticity of the lender you’re considering. In the article, we’ve discussed four steps to determine whether you’re dealing with a legal lender or not. Follow the above steps and be safe from digital fraud.