The Philippine financial system will likely face a volatile 2016 due to external factors including the growth slowdown in China as well as more expensive borrowing costs for local businesses brought about by the decision of the US Federal Reserve to raise interest rates.
Speaking before bankers and businessmen on Tuesday night, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the year ahead will be a challenging one, and urged all stakeholders to be vigilant against emerging threats that may be brought about by too much liquidity or too much credit.
At the same time, however, the BSP chief pointed out that the Philippines “has done its homework” and is strong enough to withstand any contagion that may start from markets overseas.
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His view was echoed by local bankers and businessmen who were nearly unanimous that 2016 would be a “volatile” and “challenging” year for the Philippine economy and financial markets, especially with the presidential elections in May adding an element of uncertainty.
“The situation is challenging,” said Philippine Stock Exchange chair Jose Pardo, noting that financial markets here and overseas have experienced the worst start for a year in recent memory, with most stock indices slipping into bear market territory in the last two weeks.
“But this is also the time to be on the lookout for investment opportunities, given that valuations have come down,” Pardo added. CDG
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