Russian economic woes won’t hit Phl – BSP exec

MANILA, Philippines - The economic woes besetting Russia won’t affect the Philippine economy, an official of the Bangko Sentral ng Pilipinas said.

“The impact would be quite minimal,” Rosabel B. Guerrero, director for BSP’s Department of Economic Statistics, said last week.

“If you look at the different possible transmission channels (such as) direct investments and portfolio investments from Russia or going to Russia… it’s less than one percent. Even with respect to trade in goods, it’s very relatively small compared with other countries,” Guerrero said.

She also said that tourist expenditures and arrivals coming from Russia are also “relatively small” compared to those from other economies.

The Russian central bank last week surprised markets with a hike on its key interest rates to 17 percent from 10.5 percent as the ruble continued to weaken.

The move triggered a wave of volatility in global financial markets, and UK-based Barclays even said currencies in other regions may have been affected by the sudden increase.

“With Russia raising policy rates aggressively to defend the ruble, high yielding currencies in Asia have also come under pressure,” Barclays said in a report.

The Russian economy has already been battered by sanctions placed by the US and the European Union following its role in the Ukraine crisis. 

Barclays noted that with the rise in the policy rates and the continuous drop in oil prices in international markets, Russia may see a decline in consumption and investment in the near-term.

“The magnitude of the impact will depend on how long interest rates remain exceptionally high and whether they will be hiked further,” Barclays said.