BSP chief: We’re watching Syria, Fed move

MANILA, Philippines – The government is closely following the developments in the Syria conflict and the upcoming decision of the Federal Reserve of the United States on how and when the US will wind down its stimulus package.

These may have an impact on the attractiveness of the Philippines as an investment destination, according to Bangko Sentral ng Pilipinas Governor Amando Tetancgo Jr who spoke at the Philipine Economic Briefing on Tuesday, September 17.

LIVE BLOG: Philippine economic briefing 2013 

Tetangco spoke about possible “changes in market perception” as the world waits for the income rates to stabilize in the US, as well as the “escalation of geopolitical tensions in Syria” and surrounding areas in the Middle East.

The Syria crisis may affect global oil supply and price, according to BSP Deputy Governor Diwa Guinigundo. These, in turn, may spill over to commodity prices, the peso, and others that influence monetary stability in the country.   

Concerns over the Fed’s final decision on its massive bond-buying program has caused foreign funds to flow out of emerging markets, including the Philippines. 

Tetangco, however, stressed that these are challenges ahead, and the government needs willing and able industry partners.

“Let us continue to work together and build on what we have achieved,” he said in his opening remarks. He highlighted the country’s strong macroeconomic performance as a buffer for what could be ahead.

Solid fundamentals have helped Philippines become more attractive to foreign investors, Tetangco said, citing figures such as follows:

• second-quarter 7.5% GDP growth, among the highest in Asia
• the World Economic Forum upgrade of our global competitiveness to rank 59, improving by 6 points from 2012
• inflation average of 2.8%, the lowest in 6 years

“Friends, these are not just numbers,” the central bank chief said. He was the keynote speaker for the event, which has the theme, “Seizing Opportunities to Achieve Inclusive Growth,” 

“International recognition is important as a show of faith on what the Philippine government has accomplished,” he added, citing the investment grade upgrades from global credit raters Standard & Poors and Fitch, as well as stellar performance in several global surveys. – Rappler.com