PH financial market on ‘risk-off’ condition
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Mon, 02 Dec 2019 17:24:08 +0000
THE Philippine financial market has entered into a “risk-off” mode amid the synchronized slowdown in global growth, according to the country’s Financial Stability Coordination Council (FSCC).
In a statement on Monday, the Bangko Sentral ng Pilipinas (BSP) said the interagency council assessed the possible consequences of this slowdown during its fourth-quarter meeting.
“Building on new results from the behavioral models designed by the FSCC Secretariat, evidence that the market has entered into a ‘risk-off’ mode was considered,” it added.
A risk-off mode is described as a market situation marked by increased uncertainties.
“As a result, some investors respond by tempering their risk appetite, while more risk-aggressive investors search for higher yields,” it added.
BSP Governor and FSCC Chairman Benjamin Diokno said the “Philippines continues to enjoy one of the highest growth rates in the world, but the FSCC is taking the pre-emptive move of assessing the possible consequences of the global growth moderation.”
Philippine economic growth accelerated to 6.2 percent in the third quarter after the slower-than-expected 5.6-percent and 5.5-percent gross domestic product (GDP) expansions in the first and second.
For this year, the government revised downward its GDP growth target to 6 to 7 percent. It wants growth to settle within the 6.5 to 7.5-percent range for 2020.
The International Monetary Fund has projected global growth to hit 3.2 percent this year
before picking up to 3.5 percent in 2020.
The FSCC is composed of the Bangko Sentral, Department of Finance, Insurance Commission, Philippine Deposit Insurance Corp., and the Securities and Exchange Commission.
It is the venue for financial market authorities to identify, monitor, manage and mitigate the build-up of systemic risk in the Philippine financial system.