MANILA–Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. continues to see limited impact on the Philippine economy of the United Kingdom’s exit from the European Union (EU).
This even after UK trigged this week the Article 50 of the Lisbon Treaty, marking the start of the legal process of Britain’s exit from EU which is expected to be finished in two years.
Tetangco said this latest development has thus far not resulted any “palpable impact because I think the markets are also waiting for how this will going to move forward.”
“But one thing that was mentioned by an EU official was that the UK is leaving the Union but not Europe. So I think that’s very significant because it means that they will continue to develop economic relations with the other European countries but not under the framework of the Union,” he said.
The central bank chief said that if UK is able to successfully continue its economic tie-up with other European countries outside of the EU framework “then that would be positive for the market.
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“But it is going to take a little while because they still have to negotiate and see how they can execute the decision of the British people,” he said.
Tetangco explained that “during this period there might be questions that might be asked and therefore we may see some market reaction in terms of, probably, some volatility.
“But in our case the impact is not expected to be significant,” he said citing that investment transactions of the Philippines with UK is very small, with exports to UK at less than one percent of total.
The central bank chief cited that although remittances from the UK are “quite significant” “we have very knowledgeable, skilled Filipino workers who are always in demand.”
He, however, stressed that monetary officials will continue to monitor developments on this particular issue.