Central bank sees no need to adjust policy settings

MANILA, Philippines (Xinhua) - The Philippines does not see the need to respond to the renewed volatility in the financial markets with a change in policy, the central bank chief said today.

Governor Amando Tetangco Jr. told reporters "there is no need to adjust" policy settings in the face of losses in the financial markets due to a reaction to better-than-expected jobs report in the United States.

Over the weekend, the US reported it added 195,000 jobs in June, beating market expectations, and providing fresh proof that the world's largest economy is gaining traction.

As a result, Asian markets slumped after investors recalibrate their portfolios back to the US The Philippine Stock Exchange index ended trading down more than two percent.

"That is actually a reaction to a change in 'push factors' since there are signs that the US economy is recovering. That ' push factor' (for inflows) is diminishing," Tetangco said.

Still, the local economy continues to enjoy the "pull factors" of strong growth and low inflation, Tetangco said, and this should attract investors back to the Philippines.

The Philippines grew 7.8 percent in the first quarter, ahead of the rest of Asia, on the back of 3 percent inflation.