PHL officials call for calm as Fed move shakes PHL markets

Philippine policymakers are urging calm in financial markets now being shaken by pronouncements of the US Federal Reserve that its massive stimulus measure will be trimmed later this year.

 

Instead, the Fed's announcement "should calm the market," Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. told reporters in a text message Thursday. The central bank is monitoring global developments and and will "maintain its presence in the foreign exchange market" to avoid unnecessary exchange rate fluctuations, the central bank chief noted.

 

"The Fed's view that the downside risks to their outlook for the economy and labor market have diminished should provide support to economic growth," he said.

 

"We will make policy adjustments as and when needed," he added.

 

In a separate interview with reporters Thursday, Finance Secretary Cesar Purisima echoed the view that a recovery in the US is actually good news for Philippines exports. "A strong US is good for us, because that will open export market for us," the Finance chief noted.

 

On June 10, the National Statistics Office reported merchandise exports dropped nearly 8 percent in April.

 

Still, Purisima said the economy continues to hold "strong fundamentals" against the headwinds in financial markets. "We have been preparing for this eventuality," he added.

 

US Fed Chairman Ben Bernanke said on Wednesday the $85-billion monthly stimulus could be downscaled "later this year" if signs of sustained US recovery is seen.

 

The announcement triggered anew a massive sell-off in emerging market assets such as those from the Philippines, causing the stock market and the peso to drop in value.

 

Fed Chairman Ben Bernanke on Wednesday announced that the $85-billion monthly stimulus could be downscaled "later this year" if signs of sustained US recovery is seen. His statement triggered a new round of sell-off in emerging market assets including the Philippine peso and shares of stocks. — VS, GMA News