MANILA – Philippine and other Asian assets may rise if investors shift funds from the U.S. amid debt concerns in the world’s biggest economy, a local bank treasurer said.
“There’s going to be safety that’s going to be seen in Asian debt and the Philippines is going to be part of it,” East West Bank Treasurer Manuel Goseco said.
“So I don’t think there’s going to be any negative repercussions that are going to happen here in Asia.”
The U.S. Congress needs to raise the country’s $14.3 trillion debt limit to allow the government to continue to borrow money on August 2. If not, the government may have to stop some payments, including debt payments, resulting in a default. Some legislators are pushing for a bill that would make the government prioritize debt payments (as well as Social Security payments and soldiers’ pay) in order to delay or avoid default.
Goseco said global investors will think “the money has been printed, we own the money, we have to deploy it somewhere, we have to earn somewhere. Asian debt — especially the Philippines, with probably a budget surplus coming out next week — honestly it is probably a safe haven now”.