MANILA - The Philippines can weather the storm arising from Greece's looming exit from the euro zone, the Bangko Sentral ng Pilipinas said on Thursday.
“I think we’ll be able to absorb any shock that can arise from that because we have sources of resilience we have described in the past,” BSP Governor Amando M. Tetangco Jr. said.
“From the standpoint of the Philippines, the euro zone can be likened to a pain in your shoulders. It’s there and you can feel it but it doesn’t cripple you,” Tetangco said.
“There will be hiccups here and there but the core economies like Germany should still do well,” he said.
The BSP chief said the euro zone accounts for 16 percent of overseas Filipino worker remittances each year, and for 12 percent of Philippine export receipts.
“Our banks continue to be stable and continue to perform well in terms of asset growth, profitability and credit quality,” Tetangco said, citing the 2.34 percent default rate of local banks' total loan portfolio.
The euro zone is teetering on the brink of recession, as Greece, Spain and Italy grapple with debt.
Earlier, the World Bank said a one percent reduction in the gross domestic product of the euro zone would result in a 0.4 percent cut in the Philippine GDP.
source: interaksyon.com
