ASEAN KEY DESTINATIONS
Philippines supports APEC stance
Finance Secretary Cesar Purisima told reporters on Monday that the Asia-Pacific Economic Cooperation (APEC) is correct in bucking a "competitive devaluation" of currencies that would only wreak havoc on the region's economies.
"The worse thing that can happen when you start talking about competitive devaluation is that the whole thing can lead to protectionist measures. That's why as the [Philippine finance secretary], I will not recommend competitive devaluation. We should allow the market to determine the exchange rate. Our only role is to make the adjustments," Purisima said.
Emerging markets like the Philippines are worried that the US Federal Reserve's decision to keep its monetary policy loose has released a fresh wave of portfolio flows that could lead to asset bubbles and fuel inflation.
The past week, the peso-dollar exchange rate touched the P42:$1, while the local stock market continued to hit new record highs.
"What needs to be done is a coordinated action of all countries to resolve this situation. We cannot have unilateral actions [or even bilateral actions]. This is something not desirable," Purisima said.
"We're hoping that in the G20 meeting this week they will agree to a framework that would lead to a more coordinated action among the large countries in particular so that these process of the shifting money from the slower growing countries to the faster growing countries [can be] managed in a more reasonable manner and at the same time the adjustments are not through foreign currencies-there are other adjustment mechanisms," he added.
During the APEC Finance Ministers meeting in Kyoto, Japan last week, US Treasury Secretary Timothy Geithner suggested that exporting countries look into limiting their current account surpluses and deficits to halt the widening trade imbalances.
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