Bloomberg News

Philippines Monitors Asset Flows to Avoid Bubbles, Purisima Says

June 12, 2012

Philippine policy makers are examining foreign capital inflows and investment in real estate to dodge excessive increases in currency valuation and housing prices, according to Finance Secretary Cesar Purisima.

“We are monitoring carefully the situation to make sure we don’t create problems down the road for us in terms of asset bubbles,” Purisima said in an interview yesterday at Bloomberg headquarters in New York. “We believe we are very far from the situation.”

The peso has rallied 2 percent versus the dollar this year, the best performer among the most-traded Asian currencies tracked by Bloomberg.

Remittances from overseas workers and outsourcing from multinational companies, rather than speculators, are the main reasons to support the peso, according to Purisima, who is meeting with investors and credit-rating companies in the U.S.

The government is trying to direct foreign capital into infrastructure investment to help boost growth, he said.

The Philippine economy expanded 6.4 percent in the first quarter from a year earlier, the fastest pace since 2010, as President Benigno Aquino boosted government spending to counter faltering global demand.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Shamim Adam in Singapore at sadam2@bloomberg.net

To contact the editor responsible for this story: Laura Zelenko in New York at lzelenko@bloomberg.net


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