Social Security System (SSS) president Romulo Neri said the Philippine economy remains “solid” as the financial meltdown of US investment bank Lehman Brothers only has a minimal effect on the country.
Neri, the former National Economic and Development Authority (NEDA) director general, said the SSS has been buying stocks despite the latest crisis in the financial system because of indications the stock market will recover this week.
“Very solid naman ang ating economy at maliit ang impact ng Lehman Brothers to us. It’s very minimal kaya tingin ko wala tayong problema,” Neri said in the weekly radio program “Para Sa Iyo Bayan” of Vice President Noli De Castro.
He noted that more than half of the investors in the domestic stock market are foreigners and the market immediately reacts if investors panic.
“More than one half of those that invest in our stock market are foreigners thus if they panic and quickly leave our stock market will immediately react,” Neri said. “Sa tingin ko magrerecover ang stock market. We in the SSS are buying stocks dahil medyo mura ngayon at kumikita kami ngayon sa mga binibili namin. I think by next week magrerecover na yan.”
On Friday, global stock markets soared after a punishing week as news of a US government plan to rescue banks from toxic mortgage debt brought hope of a letup in the world’s worst financial crisis in decades.
Analysts said the news of a US lifeline, along with new changes to short selling in the US, Britain and Ireland, also helped push markets higher.
Investors welcomed reports the US government was looking for ways to help distressed banks and resolve the latest crisis to hit its financial system.
Philippine financial markets rebounded sharply Friday on the back of collective efforts of the world’s central banks to calm down global financial markets and an assurance of a very limited exposure of local banks to bankrupt US investment banking icon Lehman Brothers.
The peso rallied against the dollar and share prices rose across the board, with the stock market’s main index gaining 4.69 percent, led by the financial sector, which jumped 7.53 percent.