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US Senate OK of bailout plan lauded

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By Joel Guinto
First Posted 12:11:00 10/02/2008

MANILA, Philippines — Monetary authorities welcomed the passage of a $700-billion rescue package for financial institutions by the US Senate, saying this could decrease the chances of a recession there that could impact local markets.

“The bailout has a very important real and psychological effect and that’s how market goes. A bailout will improve the chances of a recession not taking place,” Finance Secretary Margarito Teves told reporters at the Palace, adding, “We need to avoid a recession at all cost.”

“This is going to be a very positive factor in limiting whatever fallout there might have been. For the Philippines, the impact is clearly going to be positive,” Bangko Sentral ng Pilipinas (Central Bank of the Philippines) deputy governor Nestor Espenilla said.

The Senate vote was projected to pressure the US House of Representatives to approve the rescue package, which lawmakers there had rejected.

US President George W. Bush proposed the $700-billion package to allow government to buy bad loans of banks and financial institutions and restore liquidity in the sector.

Unlike in the US, Espenilla said local banks have “no solvency issues.”

“We learned our lessons in 1997. We are prepared for it,” he said, referring to the 1997 Asian financial crisis.

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Written by joelguinto

ThuUTC2008-10-02T06:15:43+00:00UTC10bUTCThu, 02 Oct 2008 06:15:43 +0000 22, 2006 at 12:45 am10

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