Philippines calls for ‘more stable’ reserve currencies

MANILA, Philippines—Finance Secretary Cesar Purisima Saturday called for the US to address “fundamental issues” after its debt downgrade and said the world needed other “more stable” reserve currencies beyond the dollar.

“Unless the US address their fundamental issues, I think we may have entered an era of less predictable and less stable global financial markets,” Purisima said.

“This development highlights the need for alternative global reserve currencies and benchmarks that are more stable and as liquid and convertible.”

To avert market unease, he said it was important for Washington, issuer of the world’s reserve currency and benchmark debt instrument, to deal with the issues that led to its loss for the first time of its top-notch AAA rating.

“This resulting unease may in the short term make investors more tentative and may slow down the global economy,” Purisima said in a statement.

According to US Treasury data, the Philippines holds $23.6 billion in US securities, now rated AA+ by S&P with a negative outlook.

President Benigno Aquino’s spokesman Ricky Carandang told Agence France-Presse: “In a way it’s a wake-up call for the US to begin to seriously address its economic issues. We’re confident they will be able to do this.”

The United States is also its top export market, main provider of foreign military aid, and a key host for the Philippines’ nine million-strong overseas workers.