MANILA, Phlippines—The Asian Development Bank has approved the granting of a technical assistance that would help countries in the region determine appropriate measures to counter the ill-effects of an expected prolonged debt crisis in the eurozone.
The technical assistance will involve the conduct of a study on how to properly address the impact of the crisis in the West and extension of policy recommendations for governments in Asia, including that of the Philippines.
“Financial volatility has returned to the global marketplace amid escalating sovereign debt problems in the United States and euro zonecountries,” the ADB said in a report on the technical assistance, which would be worth $225,000 and that will tap the services of consultants from various countries.
Economists said the debt crisis in the eurozone would persist through 2012. Moreover, the United States is seen to continue struggling next year with its huge debts and slow pace of economic growth.
“A further deterioration in the debt positions of these economies will have serious regional spillover effects on Asia’s macroeconomic management and growth prospects. Even if a full-blown debt crisis were averted, a further contraction in these economies [US and eurozone] as a result of weak fundamentals and fiscal tightening will have an impact on [Asian] regional growth,” ADB also said.
The technical assistance is expected to be given specific answers to questions on how to ensure that Asian economies continue to grow by a decent pace despite possibility of a persistent crisis in the West.
In the case of the Philippines, it has experienced the adverse effects of the crisis in the West so far this year.
In the first three quarters of this year, the Philippines slowed down to a growth of 3.6 percent, prompting government officials to admit that the full-year target of 4.5 to 5.5 percent may no longer be attained.
Economists said the slowdown was partly due to external factors, explaining that the anemic performance of the US and eurozone economies led to declines in demand for exports from the Philippines, such as from other exporting countries.
The United States and the eurozone are two of the biggest export markets for emerging markets like the Philippines.
Data from the National Statistics Office showed that Philippine exports in the first three quarters of the year amounted to $37.18 billion, falling by 3 percent from $38.36 billion in the same period in 2010.
The drop was led by electronics, the country’s major export product that accounted for about 50 percent of total exports. Economists said that in tough economic times, consumers would likely spend less on non-essentials, such as electronics, and focus consumption on basic goods.
Electronics exports from the Philippines are mainly intermediate goods that are used for the production of consumer electronic products, such as cellular phones and computers.