NEWLY appointed World Bank Philippine country director Bert Hofman has a rosy view of the East Asian economies that include those of the Association of the Southeast Asian Nations (Asean). He says they will remain resilient due to strengths in their domestic markets even in the face of the US economic slowdown.

Hofman said global market projections have been revised downwards and private capital flows are expected to ease. He noted the net private capital flows to developing countries that reached $998 billion in 2007, or 7.3 percent of their total gross domestic product (GDP), is expected to decrease in 2008-2009 to 5.25 percent.

He gave his assessment at the recent international forum on the implications of the Asean Charter in East Asian integration that was hosted by the Asian Institute of Management (AIM).

He said several factors suggest that East Asia is well-placed enough to weather US recession, including surpluses in current accounts and the fact that their outstanding debt due within a year is below 10 percent of GDP in all Southeast Asian economies.

Hofman said the economic conditions in East Asian economies are much strengthened by robust domestic demand and healthy corporate balance sheets, and added the region’s capacity utilization is also high, giving it the means it to attract more investments in the coming years.

“Fiscal positions are also relatively strong in most economies in the region, enabling [the economies] to undertake countercyclical policies to stimulate demand if needed,” said Hofman in his presentation at the Asean forum.

He also noted that reserve levels are very high, with $2.74 trillion total reserves at the end of January 2008 for the nine largest economies in the region.

East Asian economies based on the World Bank definition refer to China, Hong Kong, Taiwan, Japan, Malaysia, Singapore and South Korea; the developing countries include the Philippines, Thailand, Vietnam, and smaller economies Cambodia, Fiji, Laos, Timor Leste and such others in the area.

Hofman said the short-term outlook for East Asian economies include difficult challenges for some developing countries due to impacts of increased energy costs and food production costs due to high energy and fertilizer prices.

“Food prices are expected to remain elevated although some decline in real terms may be expected. Demand for biofuels will probably increase energy, and fertilizer prices are expected to remain high and pasture lands will take years before [these] can be cropped,” said Hofman.

Manila in East Asian survivors’ league

NEWLY appointed World Bank Philippine country director Bert Hofman has a rosy view of the East Asian economies that include those of the Association of the Southeast Asian Nations (Asean). He says they will remain resilient due to strengths in their domestic markets even in the face of the US economic slowdown.

THE  state-owned Bases Conversion and Development Authority (BCDA) will open the newly constructed Subic-Clark segment of the Subic-Clark-Tarlac Expressway (SCTEx) for free to light vehicles from Tuesday to Monday next week.

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A LEGISLATOR has filed a bill mandating local governments to appropriate at least 10 percent of their annual Internal Revenue Allotments to fund local health programs and services.