CEBU, Philippines - Though the global market continues to be challenged with debt crisis in the eurozone that could somehow affect the trade exports of Asia, the region is still considered to be the “bright spot†in the world economy as its growth is expected to remain strong.
In her presentation during the 27th CACCI conference in Cebu, Bangko Sentral ng Pilipinas (BSP) Monetary Policy Sub-sector assistant governor Ma. Cyd N. Tuaño-Amador said that while Asia is not immune to the global economic crisis, domestic demand and policy flexibility will help sustain the Asian economies.
She added that global activity continues to fall short such as sovereign debt worries and banking system fragilities in Europe and other fiscal consolidation challenges but is expected to slightly recover in 2013 due to improvements in the housing sector and jobs market and the upbeat market confidence.
She also said that Asia’s growth, on the other hand, is supported by strong domestic demand, ample credit, strong labor markets, and firm consumer and business confidence amidst downside risks that stem from global economic weaknesses.
She cited that Asia is projected to grow from 5.4 percent in 2012 to 5.9 percent this year.
She said that Asia will continue to encounter ripple effects of the crisis in the United States and Eurozone developments through trade in goods and services, remittances, investments, financial markets and confidence.
Amador further noted that the resilience of Asia could be attributed to the solid macroeconomic fundamentals of the region, domestic demand as a major contributor to growth due to favorable demographic structures, comfortable external payments position, expanding intra-Asian trade and sound banking system.
“Asian economies continued to grow respectably. Favorable external payments positions continue to be a source of strength in Asia while the banking system remains sound and stable in the region,†she said.
She cited that Asian central banks, in particular, have a strong foundation of monetary, external, financial sector and fiscal policies despite the global challenges.
In the Philippine setting, about 80% of the total business process outsourcing receipts is accounted by US while 7% are from Europe.
From January to November 2012, 14.4% of the country’s exports are distributed to US while 12.4 to Europe.
While 15% of tourist arrivals in the Philippines are accounted by US and 10% from Europe.
Meanwhile, Cheng-Mount Cheng of Taiwan Academy of Banking and Finance described euro debt crisis as a “public debt problem†that is not likely to go away in the short run and could cause the European economy to stay sluggish for a long time despite lower funding costs.
“It’s a bank liquidity issue,†he said.
He also cited that the eurozone crisis has an overall growth on Asian economies in terms of trade linkage, exports, financial system, fiscal balance, credit markets and economic policies.
He further suggested to remain watchful for excessive credit leverage and asset bubble while keeping an eye on Asian currencies. —/JOB (FREEMAN)