Gov't says economic fundamentals remain strong despite 'dramatic drop' on stock market

MANILA, Philippines (Xinhua) - The government downplayed today the significant drop on the local stock market last Thursday, saying it was not a reflection of the fundamentals of the economy which remain "very strong."

Presidential Communications Development and Strategic Planning Office Secretary Ramon Carandang, in a news briefing, said that the 6.75 percent "dramatic drop" on the local bourse was mainly due to external factors.

"The fall in the market was due to external factors, the fund managers selling stocks across the board; and, number two, it does not reflect the fundamentals of the economy which is still very strong," he said.

He cited the 7.8 percent economic growth during the first quarter of this year and the low inflation, which was 2.6 percent in May.

Carandang said that the Philippine central bank has not indicated whether or not it will raise the interest rates, which was worrying investors.

"Well, the central bank has not signaled either way, and it's not so much concerns about what our central bank will do, but it concerns about what the United States Federal Reserve will do and, to some extent, what the European Central Bank will do," he said.