BernankeÆs speech allayed some fears of an imminent credit crunch as a result of US subprime troubles, causing Philippine five-year CDS to move in by 3bp, and sovereign bonds to remain steady.
This occurred despite the Philippine budget figures showing a deficit increase in the first half of the year to Ps41 billion - 30% above the countyÆs target - and a drop in government expenditure of 4% below the first-half target.
ôThe market is purely trading on subprime...
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