Philippine central bank chief sees limited impact from US subprime crisis

MANILA (Thomson Financial) - Philippine central bank chief Amando Tetangco Friday downplayed any impact from the US subprime market woes on the domestic financial system, saying local banks have no significant exposure to collateralized debt obligations (CDOs), which are at the heart of the

US credit problems.He said any impact on the Philippine economy "will be largely indirect, mainly in the form of risk aversion.""It is expected to be limited. Philippine banks are not exposed in any significant way to CDOs," he said in a mobile phone text message.CDOs are securities backed by bonds and loans and which could include US subprime mortgages."There is sufficient liquidity.

More fundamentally, the increased availability of longer-term funding in pesos has also reduced the country's vulnerability to adverse external market developments," he said.Philippine equities plunged Friday following another major slump in markets worldwide after BNP Paribas, France's biggest bank, froze withdrawals from three of its funds that had invested in subprime mortgages in the US.At 11.42 am here, the composite index was down 97.19 points or 2.9 percent at 3,288.01.The peso fell to 45.73 against the US dollar from Thursday's close of 45.36.