BSP to Duterte-spooked investors: Economy more fun in the country

Despite external volatilities as well as sociopolitical risks on the domestic front, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. urged investors not to waver and trust the country’s strong economy.

“Let me deal with the elephant in the room. I know you are not newbies to volatility. Therefore I think it is important that, in all the sociopolitical events surrounding the market today, we should not lose sight of the fact that our macrofundamentals are solid and that these were built over years of deliberate conscientious reforms,” Tetangco said in a speech before financial industry associations Thursday night.

He asked investors not to be carried away by sentiments, which he admitted could run—and sometimes “over-run”—the markets.

Reports claimed foreign investors have been pulling out funds in the stock market, which some blamed to souring bias over President Duterte’s controversial statements and policies. The peso has also been experiencing weaknesses against the greenback in the last few weeks.

Further fueling market volatility was debt watcher S&P Global Ratings’ recent report where it noted that Duterte’s law and order thrust brought about “rising uncertainties” in the governance front and “could undermine respect for the rule of law and human rights, through the direct challenges it presents to the legitimacy of the judiciary, media, and other democratic institutions.”

“When combined with the President’s policy pronouncements elsewhere on foreign policy and national security, we believe that the stability and predictability of policymaking has diminished somewhat,” S&P said on Wednesday.

Tetangco assured market players “the BSP has the tools to help ride out the volatilities.”

“We can also employ targeted macroprudential tools to bring about a more directed influence on market behavior, if and as warranted,” the BSP chief added.

“In turn, we expect that the market would take measured risks—lend to viable projects that generate jobs, create client-suitable products, utilize your liquidity not just for financial assets, make your capital work. Our regulations and our policy framework are geared towards providing a balanced, safe and sustainable operating environment for you,” Tetangco said. Ben O. de Vera

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