Friday, September 12, 2008

Thanks to my commentators and pop quiz

Hi folks, it's been a while. While I reserve the right to post as I please, and you the right to avoid reading this, sheer courtesy obliges me to be timely in moderating comments. Actually I would have wanted to turn the moderation option off, except that spammers have a field day. So I have now dealt with the commentary backlog, and thanks for paying attention. And since you are, I have a pop quiz (and perhaps this should be standard interview question for financial analysts): the newspaper today reports that the debt of the Republic of the Philippines stands at Php 3.964 trillion, of which 2.303 trillion is local and the rest is domestic. Averaging over the number of Filipinos, every citizen owes Php43,805.

Estimate the net present value of the average debt burden of each individual today. List all the assumptions and calculations.

Hint: it is is certainly less than 43,805!