BSP's Tetangco: Euro debt bailout to calm markets

The European bailout measures ought to restore market confidence and help investors focus on the fundamentals of financial markets, including the Philippine Stock Exchange (PSE), Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said on Thursday. "We saw broad positive reaction from the market. But as they say, the proof of the pudding is in the eating," Tetangco said hours after the European Financial Stability Facility (EFSF) fund was boosted to €1 trillion. European Union banks were required to raise €106 billion in new capital and private banks accepted a 50 percent loss on Greece debt as part of a strategy to solve the ongoing European debt crisis. "We are nevertheless hopeful the measures would be sufficient, at least, in shoring up confidence and calming the markets. The agreements are comprehensive but require the cooperation of the European leaders, multilateral agencies like the IMF, and the private sector," Tetangco said. The BSP chief said the overall behavior of investors in the PSE, where the key index rose by 1 percent or 42.74 points, echoed the cheer of investors after the Eurozone leaders reached agreement. BSP officials have kept a close watch on sovereign debt and banking concerns in Europe because of the uncertainty these exert on the global economic outlook and flow of funds to emerging markets like the Philippines. "So far, Team Philippines has managed the waves and rough tides relatively well. For sure, our hard-earned economic gains were achieved from lessons learned from the past," Tetangco said. — ELR/VS, GMA News