Zambo violence has had no impact on financial markets

ZAMBOANGA CITY - About 80,000 people have been displaced in the nine days of fighting between government troops and a faction of the Moro National Liberation Front. Hundreds of homes, and several public and commercial buildings have been destroyed. Flights and ferry services are suspended.

 

The clashes could tarnish the image of the Philippines as a destination for foreign investment but financial dealers said on Tuesday the violence has not had an impact on markets.

 

The peso was stable to slightly weaker while and Manila stocks were up 0.4 percent by the early afternoon.

 

Mindanao has reserves of gold, copper, nickel, iron, chromite and manganese, which account for about two-fifths of total reserves in the country.

 

But Zamboanga is far from most mining operations, at the end of a peninsula in the southwest of Mindanao, which is about the same size as South Korea.

 

The fighting has, however, brought the largely Christian city of Zamboanga to a halt.

 

Six canneries that accounts for 80-85 percent of the country's sardines production are shut operations and shipment of about 10,000 tonnes of dried seaweed used in the production of carrageenan, a food additive, have been halted.

 

"If the conflict is prolonged, raw material supplies to local processors and export markets would be disrupted that could result in increased prices," Maximo Ricohermoso, chairman of the Seaweeds Industry Association of the Philippines.

 

The Philippines is the world's second largest producer of carrageenan, exporting more than 100,000 tonnes a year valued at $250 million. —Reuters