|
By Maricel E. Burgonio, Reporter
THE Bangko Sentral ng Pili-pinas
(BSP) said it is unnecessary to join its peers around the world and
inject funds into the local financial system as domestic banks are
less dependent on foreign denominated financing.
Last week, Asian central banks
took their cue from the United States Fed and the European Central
Bank (ECB), all of which committed to pour money into their
respective markets to allay concerns over commercial lenders’
exposure to risky investments in the failing US subprime home
mortgage industry.
“The Philippines’ banks are
not exposed in a significant way to collateral debt obligations [CDOs].
If there [is] an effect, it’s largely indirect in the form of risk
aversion,” BSP Governor Amando M. Tetangco Jr., said.
Tetangco said the local financial
system has sufficient liquidity which makes it less dependent on
foreign denominated financing.
The country’s money supply or
domestic liquidity grew at a slower 19.4 percent in June from the
20.5 percent in May. Liquidity has been growing at double-digit
rates, forcing the BSP to implement measures aimed at siphoning off
excess money in the system.
“The movement we see in bond
prices and exchange rate is line with the emerging market. We still
have sufficient liquidity in the system. I don’t expect this to be
a source of pressure. It’s more of a fundamental reason,”
Tetangco said.
“With improvements in [the]
domestic capital market, we’re less dependent in foreign
denominated financing. Corporations had other sources of funding
aside from banks,” he added.
Outside the Philippines, the Bank
of Japan and the Reserve Bank of Australia have added more money
than usual to prevent short-term rates from spiking, albeit on a
much smaller scale than the ECB’s own infusion.
The ECB injected 61.05 billion
euros, less than its record-setting sum a day earlier but enough to
steady panicky euro-zone credit markets.
The US Fed last Friday said it
stood ready to provide emergency funds to banks if needed after it
added $19 billion in reserves, its biggest operation in at least a
year.
|
