GMA challenges Asian bankers to remain catalysts for growth

MANILA, Philippines - President Arroyo has challenged Asian bankers to remain as catalysts for growth in the region and lead reforms in the global banking system.

In her speech during the 26th Asian Bankers Association (ABA) general membership meeting yesterday, Mrs. Arroyo noted that Asian banks, especially those in the emerging markets, have remained healthy and resilient.

She said most Asian banks, including the Philippine banking system, did not require bailouts from their respective governments to cope with the global financial crisis.

The emerging markets, including most ASEAN member nations, had been likewise driven by strong private consumption, with those in Vietnam and Indonesia accounting for 65 percent of gross domestic product (GDP), 70 percent for the Philippines and 75 percent for Bangladesh.

The Philippine banking system was mildly affected by the global credit crisis due to its early compliance with stiff reforms.

It adopted the Basel II framework and the International Accounting Standards (IAS) well before such measures went into full swing.

“We took the bitter pill early, and that was one of the reasons why Philippine banking system remained healthy,” Mrs. Arroyo said.

The Philippines also weathered the crisis due to the larger-than-expected remittances from overseas Filipinos. “Our remittances defied all expectations,” she said.

President Arroyo further challenged the region’s bankers to help formulate new reforms for the global banking system. “The emerging markets could influence what is ahead of the recovery,” she added.

Meanwhile, Jim Walker, managing director of Asianomics Ltd., urged the Philippine government to dramatically improve registration, licensing and all other processes in encouraging the entry of foreign and domestic businesses.

 “The Philippines did well in relation to the crisis but must keep interest rates low and make it easier for business to enter,” he said. He likewise said the country’s growth rate has remained almost static in relation to its Asian neighbors.

He said the Philippines must outpace its Asian neighbors in terms of economic growth rates in the next three to five years if it wants to remain in pace with the region.

Walker said the upcoming elections in 2010 would not change the attitude of foreign business.

“I do not think foreign business will be bothered by the results of the coming elections. They perceive that the business policies will remain unchanged,” Walker added.