Credit is money advanced to a person for him or her to spend in anticipation of payment once the income or salary comes to the credit holder. And banks make money from the interest payment of creditors. 

  This is the whole bone of the American economy. The Americans borrow money to spend for their amenities like cars and houses. When the Americans have money, they splurge on almost everything, and the economy grows. That is the idea behind giving Americans tax refunds. So they could buy, buy and buy. That is the spirit of the American economy. When the economy is bad, there is no good cash flow, then the jobs bled dry, and Americans suddenly become jobless and money-less. So inevitably, they cannot pay back the money, they borrow. They declare bankruptcy, and banks affected by these bankruptcies collapsed overnight. That is what happened to Lehman Brothers and Washington Mutual. With no money around, the American economy is really in for tough times. The American dream is lost. When there is no money, then stock market goes down, the price stocks collapsed, so other foreign markets, also collapse like a pile of dominoes. .

   One of the most liberal when it comes to credit extension is in the United States . You develop your credit by opening a bank account. They watch your account. If you manage it wisely, you will not have to apply for credit, the banks will offer it to you, no sweat. Suddenly, you have cash in your hands. So if you are Filipino, you start planning your vacation to the Philippines, and charge your potential expenses like tickets, hotel stay, pasalubong, and advanced cash all to your credit card, a grand holiday at the expense of your credit card. Fine and well, wait when the paying starts. It turns out that suddenly you lose your jobs, you are unemployed, then how in hell, can you pay, malas mo lang Immediately you are pauper. And how many thousands of creditors have been hit by this malaise.  Some people live entirely on credit. They conveniently hide when it is crunch time to pay

   For instance, according to some statistics, 1,000 Starbucks coffee shops have closed, and ten hospitals in New York stopped operating. I am sure there were Filipino nurses working. In these hospitals, they must be jobless by now. Is this the beginning of the end.

   As of this writing, the US Senate has passed the $700 billion bailout bill. There some amendments including a provision for insurance for bank deposits of at least $250,000. Critics of the bailout bill claim that this is merely for the satisfaction of Wall Street. Americans have been deeply scandalized by huge salaries paid to Chief Executives of these major cash-strapped companies. They are now proposing that any company receiving bailout money should put a cap on the salaries of their chief operating officers. What a scandal, while Rome was burning the officials were feasting.  .       

   Americans have to dispose of their amenities they are used to. There is going to be a drastic change in their lifestyles. There will be less credit to be available. The celebration has stopped. America will no longer be the land of milk and honey. This means also, that there will be less American aid to be given to the Philippines.

   It also means it is hard to get American money to be invested in the Philippines. Financing companies in the Philippines will also get a share of the financial worries. There are already speculations that the subsidiary of the American International Group, in the Philippines, the PHILAMLIFE, will be sold probably to the cash-rich Ayala group of companies.

   Unlike the USA, credit in the Philippines is very restrictive. The only credit extended by banks are normally credit card charges, housing and car loans and loans for departing OFWS. Unlike in the USA Filipinos do not depend largely on credit to enjoy amenities.

   The local banks have already revealed exactly how much they have invested in Lehman Brothers. What bothers us, is the fact that despite steadfast denials that they have not lost money in Lehman Brothers, both GSIS and SSS have not revealed as to where they have invested their billions of pesos. Is retirement money safe for the pensioners? - Sunday Post Newspaper