LIKE the United States, the European Union and the majority of its population appear to serious Roman Catholics as mainly a force for the Godless, anti-religion, anti-Catholic, anti-moral values, anti-prayer and anti-Church liberal and secular mentality.
So, how should Catholics view the temporal, mainly political and economic uncertainties that will for sure plague the EU—and the UK as well—now that the British people have voted Yes to Brexit?
Pope Francis’ first words about it can guide us.
According to Zenit. org, quoting L’Osservatore Romano, “In the wake of Britain’s vote Thursday to leave the European Union, Pope Francis has commented that this change must be followed by ‘guarantees’ for the good of both Britain and countries on the continent.”
Vatican Radio reported that “while speaking to journalists aboard the papal flight headed from Rome toward the Armenian capital of Yerevan, Francis said the referendum result must be respected because it was wanted by the people.”
“It was the will expressed by the people and this requires a great responsibility on the part of all of us to guarantee the good of the people of the United Kingdom, as well as the good and co-existence of the European continent,” the Pope said (per Vatican Radio).
Bad effects immediate
The bad effects of Brexit were immediate. The British pound sterling depreciated to its lowest level since 1985. Our own peso declined on Friday to P46.95 against the US dollar from P46.535, a loss of nearly half a peso.
Stock markets all over the world also slumped. The Philippine Stock Exchange index (PSEi) lost another 100.06 points or 1.29 percent to settle at 7,629.72 by end of trading on Friday.
Apparently the world thought the Yes camp in the Brexit referendum would win—even by only a few percentage points as shown in surveys days before the actual poll.
But as usual, our Bangko Sentral has soothing words for us. It gave assurances that, ever, Philippine strong macroeconomic fundamentals and sufficient buffers would help us survive any consequences of the UK decision to leave the EU. This won’t be in effect until two years from now, in the first place.
Assurances from BSP Governor
BSP Gov. Amando Tetangco, Jr. says the monetary authorities will act swiftly to minimize any impact of Brexit on our domestic financial markets.
“BSP is ready to provide liquidity to our market as needed. But we don’t see any need to change any policy at the moment,” he said.
The BSP chief explained that UK’s leaving the EU would result in volatile markets because investors would shift to safe haven currencies such as the US dollar and Japanese yen. But he also said, “As expected, the US dollar and the Japanese yen benefited as safe haven currencies. While regional currencies are down, the peso remains in the middle of the pack,” Tetangco said.
“We can expect more volatility in domestic markets in the near term. Even as the direct Philippine exposure to UK is relatively small, we will watch the impact on us via contagion from moves in the US dollar,” Tetangco added.
More encouraging thoughts came from BSP Deputy Gov. Diwa Guinigundo. He reminds us that our country’s sustained economic growth for the past 69 quarters since 1999, as well as the healthy balance of payments (BOP) position and higher gross international reserves (GIR), thanks to our good-enough export position and to our OFW remittances, will cushion any impact of Brexit on our foreign exchange market.
Let’s also keep our morale high with the thought that with our gross domestic product (GDP) growth at 6.9 percent, we are the fastest growing economy in Asia. And experts think that by yearend, our GDP growth could go as high as 7.8 percent.