CEBU, Philippines—The Philippine central bank said Friday the financial markets' reaction to the U.S. Federal Reserve's tapering of its bond-buying stimulus has so far been good.

The Fed in past months has unveiled three reductions of $10 billion each in its monthly bond purchases, which originally had totaled $85 billion. The latest took effect this month.

The tapering has sent foreign funds flowing out of the Philippines in the first quarter, with foreign portfolio investments in stocks, peso-denominated bonds and time deposits showing a net outflow of $2.3 billion compared with a net inflow of $1.1 billion in the year-earlier period.

"Given the developments till the first quarter, it looks like the markets have not violently responded to this," Bangko Sentral ng Pilipinas Gov. Amando Tetangco said at a briefing in the central Philippine city of Cebu.

Still, Mr. Tetangco said the central bank considers the Fed's tapering a threat to financial market stability.

"We have to continue to be watchful on the risks to emerging markets," said Mr. Tetangco. "We continue to pay attention to this particular risk factor…There is now information on this, but at the same time we do not have enough information," he added.

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