Lehman collapse not reason to hike prices of commodities in RP - Monsod

MANILA, Philippines - Economics professor Solita "Winnie" Monsod on Friday assured that the exposures of at least three Philippine banks to the collapsed investment giant Lehman Brothers should not be made as a justification to raise prices of local commodities. In an interview with Mike Enriquez on radio dzBB, Monsod dismissed claims that the problem involving Lehman Brothers - the fourth-largest investment house in the US - would cause hyperinflation or cause oil prices to shoot up locally, saying Lehman is not a depository bank. “We’re doing fine, let us not panic, please let us not get carried away," said Monsod. World monetary authorities are likewise working together to cushion the impact of the investment giant’s collapse, she added. “Yung mga authorities around the world realized that they are going to have to work together. And they are working together, and that’s good," said Monsod. Monsod likewise defended the Philippine banks which bared their exposures in Lehman investments. “Wag nating sabihin na these banks were careless. Lehman Brothers was the fourth largest investment bank in the world," said Monsod. With the Philippine banking system estimated to be worth P5 trillion in total assets, the Lehman exposure is seen to be at around P15 billion. On Tuesday, the country’s top two banks, Banco De Oro Unibank, Inc (BDO) and Metropolitan Bank and Trust Co (Metrobank), bared their respective exposures in Lehman investments. BDO said it has allocated P3.8 billion worth of provisions should the US investment bank fail to repay its debts, while Metrobank, which held $20.4 million worth of Lehman-issued bonds, has allocated $14 million. The Yuchengco-led Rizal Commercial Bank Corp (RCBC) later disclosed that it has exposure to Lehman Brothers and has allocated P980 million from its current excess reserves for any possible writedown. On Wednesday, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco likewise assured that local banks will withstand the collapse. “There is no reason to panic. The banking system is sound and stable," said Tetangco, saying the exposure of local banks are “very small." Lehman Brothers, founded in 1850, declared bankruptcy on Monday. - Johanna Camille Sisante, GMANews.TV