Lotilla was part of the Philippine economic team that went to Qatar last week for the Asia Cooperation Dialogue (ACD). The ACD consists of oil exporting countries Bahrain, Brunei, Indonesia, Kazakhstan, Kuwait, Malaysia, Oman and Qatar and oil importing countries Bangladesh, Cambodia, China, India, Japan, Lao P.D.R., Myanmar, Pakistan, the Philippines, Singapore, South Korea, Sri-Lanka, Thailand and Vietnam.
Conceptualized in 2002 by the Thai government, the ACD is aimed at promoting and improving relationships among Asian countries in all areas of cooperation to help reduce poverty and improve the quality of life for the Asian people.
Lotilla said one of the issues discussed in the ACD was the re-channeling of Petrodollar investments from the Middle East to developing countries in Asia including the Philippines.
Petrodollars refer to the money that Middle Eastern countries and members of OPEC receive as revenue from Western nations, which are eventually deposited banks.
"One of the things that we have been developing, which if you recall was a major thing in President Arroyo’s trip to Saudi Arabia, was how to re-channel or reinvest the petrodollars into Asian economies. I think that’s a very important point because right now, due to the higher price of oil, we are experiencing the same phenomenon that occurred in the 70s, where you have petrodollars floating out there and of course they would have to find some place to be invested in," he said.
He said this time the Philippines should learn its lessons from the past. "In the 70s, they invested them through American banks and then these banks re-lent them sometimes irresponsibly to developing countries like the Philippines, which gave rise to the debt crisis in the 80s. The oil producing countries have actually far greater alternatives on how to invest their money now than in the 70s, because there are things they can invest in," he said.
Lotilla said among the proposals discussed was the development of Asian bonds, which can absorb some of the excess petrodollars and the proceeds can be used by Asian economies for their development projects.
Details of such proposal, Lotilla said, will have to be addressed and handled by the Department of Finance (DOF). "But at that level, the official position of the Philippines is that we support such kind of alternative."
He noted that a dilemma of oil producing countries in Asia is to identify appropriate vehicles for their investments. "I guess they’re not in a position to be able to identify specific projects - that’s a role for the private sector and that’s why we need to encourage greater interaction between the public and private sector in the oil producing countries."
"I think that was a major decision was made that in the subsequent activities of the ACD was that there should be appropriate business sector representation, as they are the ones that are going to make these things work."
According to Lotilla, they have also pointed out to Saudi officials the important role of Filipino workers in their economy.