Wednesday, 10 August 2011 13:16
The Aquino administration vows to focus more on improving the domestic economy’s fundamentals to further help it weather more blows in the global economy following last week’s downgrade of US’ credit rating.
Finance Secretary Cesar Purisima said financial markets became more volatile as the on-going debt crisis in Europe was further aggravated by Standard and Poor’s (S&P) one notch downgrade of US’ Triple A rating to “AA.”
He, however, said that the administration’s “economic agenda and fiscal sustainability program will help us weather the situation.”
He also raised the need for global regulators implement “another version of the 1985 Plaza Accord where everyone coordinates to really deal with problems we’re facing right now.”
“We need more coordination and really work together to make sure we could weather this in a favorable manner,” he said.
Purisima said the four positive ratings actions on the Philippines within the first month of President Benigno Aquino III were “reflections of our macroeconomic stability as well as the fiscal sustainability program.”
“We are confident that we will be able to weather this turmoil as a result of the S&P downgrade but I think (on) longer term, the growth prospects will be in the emerging markets and therefore the Philippines being in Asia, I think we should take advantage and really address our infrastructure, address our competitiveness and make sure we’re able to get our share of the investments,” he said.
Purisima said the downgrade of US’ credit rating would result to weakening of the US dollar against other currencies with investors looking for safer haven like the Swiss francs and Japanese yen.
He said the situation would still be addressed by the administration’s focus on fundamentals and fiscal sustainability.
He said the Bangko Sentral ng Pilipinas’ (BSP) “has done a good job” in making sure of implementing a monetary policy that is supportive of growth.
He also stressed the need for the administration to continue increasing economy’s competitiveness and efficiency since these are what will make it afloat through all the negative global economic development.
“Since the Asian crisis, the economy has continued to grow. Even after the global economic crisis, we have continued to grow. So we shouldn’t worry so long as we focus on the fundamentals,” he said. (Joann Santiago-PNA)
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