Banker sees mild market swings in run-up to polls

MANILA, Philippines - Domestic markets are not expected to see wild swings during the run-up to elections as candidates are expected to bare their economic policies before the May 2016 polls, ING Bank Manila country manager Consuelo Garcia said.

Garcia told The STAR uncertainties would remain in markets but having a clear front runner who is also vocal on economic policies would reduce the volatilities.

“Most of those who are running are espousing market policies so I don’t think that one will change. (At the same time), the economic team are more or less given some independence so in that aspect we are good,” Garcia said.

President Aquino has declared former Interior and Local Government Secretary Mar Roxas as the Liberal Party’s presidential candidate, while Vice President Jejomar Binay will be heading the United Nationalist Alliance (UNA) ticket in 2016.

She said that apart from the political uncertainties, investors would tend to look at what is happening abroad when assessing their portfolios.

At present, the recent devaluation of the Chinese currency and the slump in its stocks are among the biggest causes of heightened volatility in global financial markets.

“This is because it affects other economies so it affects investor sentiment,” Garcia said. The Philippine Stock Exchange in July and August saw massive sell offs amid the China economic woes.

But Garcia remained positive domestic markets would be able to withstand the recent shocks and would continue to be resilient even during the run-up to elections.

She added that investors should also not fret on a possible reversal of reforms seen under the Aquino administration after the Aquino steps down in 2016 as no candidate would want markets hit by instability.

Standard & Poor’s Ratings Services, one of the biggest global debt watchers, upgraded its rating on the Philippines in May last year as it expects reforms undertaken by the Aquino administration to continue beyond 2016.

The credit rating agency in April this year affirmed its “BBB” rating on the Philippines with a stable outlook. This is a notch above the minimum investment grade of “BBB-“.