AS the global market players continue to track the developments in Greece’s referendum this Sunday, the Philippines should be watchful also on the possible contagion.
“If lenders to Greece panic and cut back on their global lending and not treat us as an exception because of our investment grade is higher; our fundamentals are better; and our overseas remittance from the overseas Filipino workers in Greece is minuscule, we could be possibly affected by the contagion. Possible but not likely,” Development Bank of the Philippines Board Director Reynaldo Geronimo said.
He said the country’s fundamentals are much better than Greece’s. The Philippines has low exposure to Greece and it is not a trading partner. He said Greece’s foreign debt is “about 125 percent of their gross domestic product, ours is about 25 percent.”
“We should watch the contagion, though,” he said.
Last week the markets were still largely driven by the developments in Greece and economic-data releases in the US and the euro zone.
BPI Asset Management said this coming week they expect the euro-US dollar pair to trade range-bound, with Sunday’s Greek referendum being the main driver for movements in the currency.
BPI Asset said the local equities market slightly rose week on week, but ongoing Greek debt talks caused volatility throughout the week.
The local fixed-income securities traded with a downward price bias most of the week amid the uncertainty from the upcoming Greek referendum and release of US nonfarm payrolls data, which strengthened market belief of delay in US Federal Reserve rate lift-off.
Image credits: AP/Spyros Tsakiris