The government is more concerned on the volatility in the exchange rate rather than the downward movement of the stock market, a Cabinet official said on Wednesday.
During the sidelines of the Federation of Philippine Industries’ General Membership Meeting, Finance Secretary Cesar Purisima said that foreign-exchange rate volatility is a concern because that can be “disruptive.”
The peso is still on the P43 to a dollar territory as it closed at P43.23 a dollar on Wednesday.
For the movement of the stock market, Purisima said that it has the ability to calm itself since the fundamentals of the Philippine economy is very strong.
“Markets go up and down, the important thing is we’re working on the fundamentals of the country,” he said.
The finance chief mentioned that the strong fundamentals of the country are from the higher gross domestic product growth (GDP) rate, manageable inflation and good external position.
“We are building industries, the companies’ profitabilities are good. So I think for me, this up and down of the market, although it creates volatility, is a healthy attribute of the market,” he said.
Purisima further said that so long as the market is well regulated, the government should not be concerned, adding that, “our concern as government is that they should just be following the rules.”
The Cabinet official also mentioned that for the long term, emerging markets’ growth potential could be higher than developed markets, adding that it is because economies are about people.
“If we empower them, if we build a good set of industries that can create employment, then they can be consumption engines, and that should drive growth,” he added.
Mayvelin U. Caraballlo