Another concern is how domestic liquidity conditions could be affected by the US Fed’s decision to raise interest rates, by the weakening Chinese growth prospects and by the heightened volatility in their financial markets. Nevertheless, we have reasons to believe that the overall impact on our economy would be manageable due in large part to the “pull factor” of the Philippines’ strong macroeconomic fundamentals.
At the end of the day, the move by the US Fed to raise rates also signals a relatively more vibrant outlook for the US economy which could have positive spillover effects through revitalized trade flows. Meanwhile, a more market-oriented Chinese market could also have positive long-term effects on the global economy by ushering in a more sustainable growth path.