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While it
is true the country’s macroeconomic framework already
stood on solid ground when the latest round of financial
turbulence hit markets around the world, the Philippines
was able to withstand the initial shocks also because it
has a corps of economic planners and managers who did
their homework years before, the Asian Development Bank
(ADB) said.
Economist and ADB deputy director
general Thomas Crouch cited changes in the domestic
financial markets that made the country “less vulnerable
to external shocks.”
“The Philippine economic team has done a
wonderful job at making the economy less vulnerable to
the latest round of turbulence in financial markets. The
key here is how long this will affect the Philippines
and what will be its policy response,” Crouch told
reporters. (See
related stories in the Quarterly Business Report on
F1-F3.)
According to Crouch, the bulk of the
lessons were learned during the 1997 regionwide
financial crisis, whose ill effects largely spared the
Philippines.
“The many lessons of 1997 are part of
what makes the Philippines better-positioned to
withstand the financial turbulence. It is impossible to
gauge its full impact yet but these should be felt
across Southeast Asia and the Philippines for some
time,” he said.
More than a decade ago, the collapse of
the real-estate bubble in Thailand made banks across the
region suddenly averse to lending, making credit very
expensive and very scarce.
Under the latest round of financial
turbulence, analysts from Japan’s Misuho Bank worry that
Manila relies too much on the remittances of millions of
overseas Filipino workers (OFWs) for balance of payments
support.
Its analysts noted the volume of
remittance is such that it even muted the impact of the
trade deficit, which has widened to $791 million in the
first half.
While other may have doubts on the
sustainability of OFW flows, Bangko Sentral ng Pilipinas
Governor Amando Tetangco Jr. noted on Sunday this has
“grown faster than projected as the deployment of
skilled Filipinos continued to increase.”
“The markets for our workers have also
diversified,” Tetangco quickly added of flows seen to
end the year at least 10 percent higher to $15.7
billion.
Crouch said the remittances were to help
push private consumption activities to higher gear this
year along with continued expansion in the services
sector.
“The OFW remittance Manila receives
every year is a silver bullet that makes it virtually
impervious to an economic downturn,” he said.
Such has grown at a frenetic pace of
24.6 percent year-on-year to $9.6 billion and the fourth
month in a series when this grew at a high double-digit
rate. --J. Vallecera |
