...the resilient economy (IMF)

IMF says PH can weather market volatility

 

by Kathleen A. Martin,

ABS-CBNnews.com

06/20/2013

 

 

 

MANILA -- The Philippines can endure market volatility with its current robust economic growth and strong fundamentals, the International Monetary Fund said on Thursday.

 

Shanaka Peiris, IMF Representative to the Philippines, made the comment as the Philippine stock market recorded losses and the peso weakend on Thursday morning, following a US Federal Reserve announcement that it will reduce stimulus due to an improving US economy.

"The Philippine condition is very strong, reserves are very high and that is the first line of defense... you can smooth down the volatility," Peiris told reporters on Thursday.

Peiris noted that "markets are markets, they're supposed to react."

Us Fed Chairman Ben Bernanke on Wednesday (early Thursday in Manila) said the US central bank will decrease bond purchases amid an improving US economy.

His announcements resulted in sell-offs in Asian markets, including the Philippines', and weakening in regional currencies against the greenback.

"It's a gradual tapering off so it's kind of what the market was expecting...It's very gradual pull out so there's nothing to worry about," said.

Earlier on Thursday, the Bangko Sentral ng Pilipinas and the Department of Finance said market and peso's volatility following the US Fed's comment was expected, allaying fears such may destabilize the current strong economy.

"Such expectation should recognize that the US Fed is gunning for a gradual, calibrated reduction of monetary stimulus," BSP Deputy Governor Diwa C. Guinigundo said in a text message to reporters. "Thus, economies and markets should take advantage of the space to do the required rebalancing and appropriate adjustment."