British Banking Giant HSBC sees the worsening global financial crisis prompting Asian governments to draw up more measures for fiscal pump-priming as well as incentives for domestic investment and consumption to brace for dwindling inflows de4om exports and foreign capital.
Given the ongoing financial turbulence, the Philippine peso is seen at risk of weakening to 49 a dollar by year's end and to 52 in 2009 alongside a regional economic slowdown, HSBC said in its October 2008 global bonds research.
"Asia, evidently, is not immune from the credit turmoil brewing elsewhere. Not only have capital markets sold off in the region, but exchange rates have come under equal pressure, raising fears in some quarters that the region might be drifting int o another Asian-style crisis," the report said in a chapter entitled "Asian contagion." But HSBC ruled out the credit crunch now causing the worst financial shakeout in the United States and Europe in 80 years to affect Asia in the same magnitude.
"Taken together, the channel of financial contagion is the bigger worry for Asia than the downturn in exports that is bound to affect the region on due course," the bank said, although noting that domestic demand should be in a position to provide at least some cushion and prevent an outright contraction in growth.
From a 31-year high expansion in growth of 7.2% last year, HSBC sees the Philippine economy growing at a much slower pace of 4.1% this year and to 3.9% in 2009. The outlook was more bearish than the market's consensus forecast of 4.7% and 4.8%.
HSBC said slowing growth in the United States, and increasingly in Europe, would obviously take a toll on the region's export performance and, consequently, economic growth.
HSBC said governments would have to play their part, initially by stroking demand through pump-priming and, over time, through setting incentives for the expansion of consumption and domestically oriented investment.
- Philippine Daily Inquirer October 13, 2008
Reacting on the Philippine' peso becoming 52 a dollar from 49 a dollar does not improve our economy. I think if this prediction really happens, the rise in the value of the Philippine peso for the current year would be worthless. We could have maintained the 40+ value to a dollar. We may also see that the government officials weren't that efficient.
With the high expansion in growth of 7.2% last year and dropping to 4.1% this year and probably 3.9% next year, I think this is much of an evidence that our economy is not improving. This also does not satisfy the goals in macroeconomics. One of the three goals of macroeconomics is "sustainable economic growth". Sustainable meaning it should be growing or increasing every year. Year 2007 was the highest achieved goal for the last 17 years and our government is targeting to have an 8% this year (2008) and even 9% next year (2009). It is sad to hear that our economic growth does not satisfy this goal anymore and is actually dropping to almost half this year and the following year. With the economic crisis of the United States at hand, we may say that the government is not much of the blame, but of course, they also have their responsibilities in maintaining the growth in our country or at least keeping a small difference from the target to the actual, or from the previous year to the current year.
Given the ongoing financial turbulence, the Philippine peso is seen at risk of weakening to 49 a dollar by year's end and to 52 in 2009 alongside a regional economic slowdown, HSBC said in its October 2008 global bonds research.
"Asia, evidently, is not immune from the credit turmoil brewing elsewhere. Not only have capital markets sold off in the region, but exchange rates have come under equal pressure, raising fears in some quarters that the region might be drifting int o another Asian-style crisis," the report said in a chapter entitled "Asian contagion." But HSBC ruled out the credit crunch now causing the worst financial shakeout in the United States and Europe in 80 years to affect Asia in the same magnitude.
"Taken together, the channel of financial contagion is the bigger worry for Asia than the downturn in exports that is bound to affect the region on due course," the bank said, although noting that domestic demand should be in a position to provide at least some cushion and prevent an outright contraction in growth.
From a 31-year high expansion in growth of 7.2% last year, HSBC sees the Philippine economy growing at a much slower pace of 4.1% this year and to 3.9% in 2009. The outlook was more bearish than the market's consensus forecast of 4.7% and 4.8%.
HSBC said slowing growth in the United States, and increasingly in Europe, would obviously take a toll on the region's export performance and, consequently, economic growth.
HSBC said governments would have to play their part, initially by stroking demand through pump-priming and, over time, through setting incentives for the expansion of consumption and domestically oriented investment.
- Philippine Daily Inquirer October 13, 2008
Reacting on the Philippine' peso becoming 52 a dollar from 49 a dollar does not improve our economy. I think if this prediction really happens, the rise in the value of the Philippine peso for the current year would be worthless. We could have maintained the 40+ value to a dollar. We may also see that the government officials weren't that efficient.
With the high expansion in growth of 7.2% last year and dropping to 4.1% this year and probably 3.9% next year, I think this is much of an evidence that our economy is not improving. This also does not satisfy the goals in macroeconomics. One of the three goals of macroeconomics is "sustainable economic growth". Sustainable meaning it should be growing or increasing every year. Year 2007 was the highest achieved goal for the last 17 years and our government is targeting to have an 8% this year (2008) and even 9% next year (2009). It is sad to hear that our economic growth does not satisfy this goal anymore and is actually dropping to almost half this year and the following year. With the economic crisis of the United States at hand, we may say that the government is not much of the blame, but of course, they also have their responsibilities in maintaining the growth in our country or at least keeping a small difference from the target to the actual, or from the previous year to the current year.
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