Sen. Edgardo Angara, chairman of the Senate committee on banks, financial institutions and currencies, has allayed fears of bank runs and bankruptcies as an effect of the global financial turmoil caused by the collapse of investment firm, Lehman Brothers in the United States.
Angara said he is satisfied for now with the briefing made by Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., Finance Undersecretary Gil Beltran, Director Dennis Arroyo of the National Economic Development Authority (NEDA); chairperson Fe Barin of the Securities and Exchange Commission; Commissioner Eduardo Malinis of the Insurance Commission and Rizaldy Capulong, who represented newly appointed chairman Social Security System (SSS) chairman Romulo Neri. Bank and insurance officials were also present during the hearing.
Government Insurance Service System president and general manager Winston Garcia was unable to provide an explanation on how the GSIS invested some $1 billion of its global financial investment as he was absent during the hearing.
“In the testimony of BSP Governor Tetangco, he says that the Philippines is better positioned now to be able to absorb the shock from this credit crisis and financial turbulence, because of the past reforms introduced by the central bank, increase of capital, increase of revision, and the several laws also enacted by Congress that will push the prudential supervision of the banks,” Angara said in a briefing after the emergency consultative hearing.
“So, in essence, the central bank should be credited, too, for positioning the Philippines in a much stronger financial status and condition than we were before. And we will be able to withstand the credit,” Angara said.
Finance department and NEDA officials vowed to look at the whole economy at a macro- level. They said they will review the macro assumptions on inflation, on import and export receipts, on inflation on currency exchange.
“We urge them to do that not in few weeks time but as early as possible, because both Houses are reviewing the 2009 budget and it is important to revise the assumption,” Angara added.
Angara said Finance officials are likely to review its study on the inflation rate on the budget , which is placed between six to eight percent. “I think it may exceed that, although the BSP governor says it is attainable even the upper rates,” Angara said.
The senator and finance managers agreed that remittances remain strong and will provide a shock absorber to the financial setbacks despite the slowdown in employment rates.