Recent passage of US budget to benefit Phl – BSP

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said yesterday the recently passed US budget deal could benefit the Philippines due to reduced volatilities in global financial markets.

“The developments related to the US budget deal should ease some of the pressure off global markets,” BSP Governor Amando M. Tetangco Jr. said in a text message.

“These should also help market participants to shift their focus again to country fundamentals,” Tetangco said.

The US government on Tuesday night agreed on a budget deal that averted another possible government shutdown. The US Congress reached a deal to keep the government running in the next two years, with spending fixed at over $1 trillion.

“To the extent that these developments would smooth out kinks in the normalization process for the US and help anchor US growth, these should be positive for global markets, including EMEs (emerging markets and economies),” he continued.

The budget deal, which is seen to further boost US economic growth in the long run, already gave relief to some financial markets abroad.

The US fiscal instability has been one of the key uncertainties being weighed by investors globally.

Last Oct. 17, the US Congress passed a temporary measure that put an end to a partial Federal government shutdown and partly allayed fears the US will default on its debts.

The October deal offered funding for the government until Jan. 15 and pushed back the deadline to raise the debt ceiling to Feb. 7.

However, the recent passing of the budget deal earlier this week also stoked fears the US Federal Reserve will soon start its tapering of stimulus.

The anticipation of the US Fed’s scaling back of its massive bond-buying program continues to fuel volatility in global financial markets.