MANILA: The Philippines should weather the unwinding of the US Federal Reserve’s stimulus programme, a central bank official said yesterday, as market jitters saw the peso plunge to a 19-month low.
Central bank deputy governor Diwa Guinigundo said emerging market turmoil this week, which also saw Philippine stock prices plunging steeply on Thursday, were not backed by economic fundamentals.
“This is something that is driven more by market sentiment rather than the fundamentals of the macroeconomy of the emerging markets,” he said in a telephone interview.
“We should be concerned, but we should not be alarmed,” he added.
“In the Philippines, we have strong macroeconomic fundamentals.”
Guinigundo acknowledged what he described as “some volatility” in the foreign exchange and equities markets, leading to the peso closing at 44.26 to the dollar after falling to 44.31 earlier yesterday.
That was its lowest level since it hit 44.34 on January 9, 2012.
The week saw the Indian rupee slump to an all-time low against the dollar, while Indonesia’s rupiah is sitting around four-year lows and the baht at a more than one year low.
Among stock markets, Jakarta fell almost nine percent in the four days ending Thursday, while Bangkok was down 6.5 percent over the same period.
Manila slid 5.96 percent on Thursday, before rising 0.40 percent higher yesterday.
Guinigundo said the Philippines recorded more than $2bn in net foreign portfolio investments between January and mid-August, with net inflows also recovered between July and mid-August after some outflows in March.
AFP
