Latest Stories

SE Asian economies facing sharp slowdown


Southeast Asian economies like the Philippines face a sharp deceleration in growth as a result of a credit crunch brought on by a shift in the monetary policy of the US Federal Reserve.

The Institute of Chartered Accountants in England and Wales (Icaew) also warned that, although Southeast Asian economies have more stable economic foundations, the countries might also have to deal with the slowdown in China—Southeast Asia’s largest trading partner.

“While we believe that the strong underlying fundamentals for the region … mean that the onset of tighter monetary policy in the US will not trigger the currency crises we saw in the late 1990s, volatility is creating a more uncertain environment,” said Icaew.

Citing a study by the Center of Economics and Business Research, the group said that a repeat of the Asian crisis of 1997 was unlikely given the lower debt-to-gross domestic product (GDP) ratios of the countries in the region.

But the slowdown in capital inflow “is acting as a serious pressure on regional markets,” said Icaew, which has 140,000 members around the world.

The report noted that the Philippines’ GDP growth for 2013 could hit 5.3 percent in 2013, slowing down from the 6.8 percent reported the year before.

The slower growth rate for the year implies a sharp deceleration in growth in the second half, following a first half expansion of 7.6 percent—the fastest in Southeast Asia.

Icaew’s forecast is also lower than the Philippine government’s 6 to 7-percent target for the year, and the International Monetary Fund’s projection of 7 percent.

But Icaew remains optimistic, expecting the country’s growth to be higher by six-tenths of a percentage point than the average GDP expansion the Philippines has recorded in the last five years.

The Philippines “has huge scope for increases in productivity. Even though the country may experience an initial lag as workers are retrained, new capital is invested and new supply chains are developed, strong growth in consumption and government spending will drive GDP up,” Icaew said. “However, beyond this, high unemployment and poverty levels, as well as a need to lift interest rates in response to tighter monetary conditions in the US may drag growth down to 4.6 percent in 2015.”

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , economy , Southeast Asian economies , US Federal Reserve

  • joboni96

    not in the philippines
    if ofw remittances remains firm

    and the government knows how to leverage it
    instead of intsik switik banks benefiting

  • lanceads

    Growth will be at is fastest and not a sharp decline in 2015 as report says!.. 8% and above for 2015!!!! Go Philippines!!!

  • Some1 like you

    This is unlikely…

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • 16 suffer burns in Batangas sugar factory accident
  • Angat level drops; cloud seeding set
  • Indigenous aspiration in Bangsamoro
  • Banahaw continues to lure pilgrims, trekkers
  • Passion of Christ moves survivors
  • Sports

  • Tottenham beats Fulham 3-1 in Premier League
  • Martino defends Messi, takes blame for Barca fail
  • Vettel hoping for resurgence at Chinese GP
  • MLB pitcher donates $100,000 for Sewol ferry victims
  • Hamilton takes pole at Chinese Grand Prix
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Why ‘Noah’ can’t dock his ark at Philippine theaters
  • Acclaimed artist goes wild while on holiday
  • Believing in this mermaid
  • Missing Xian
  • Minnie Driver plays devastated mother to a stillborn child
  • Business

  • A workplace of new possibilities
  • Learning by doing: pilgrimage of faith
  • Fiat-Chrysler to produce iconic Jeep in China from 2015
  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Filipinos in US poised for success
  • Visas for priests and other faith leaders
  • DOH to continue tracking co-passengers of OFW infected with MERS virus
  • 5 Filipinos with MERS in UAE reported in stable condition
  • Marketplace