Asian Journal- The Filipino-American Community Newspaper

For European banking giant Deutsche Bank, the Philippines—among other Southeast Asian countries—is not in danger of facing recession.

"While the collapse in commodity prices and the anticipation of weaker exports should hurt economic growth, DB is not expecting a recession in Indonesia, Malaysia, Thailand or the Philippines," the German bank’s equity research said.

In fact, DB considered the Philippines as the only country in the region that has so far been unaffected by the impact of the global recession.

Deutsche Bank further cited the Association of Southeast Asian Nations’ (ASEAN) greater resilience today than during the infamous Asian crisis of the late 1990s, also a time of sharp economic slowdown and unprecedented currency devaluation.

The bank warned, however, that currencies in the region would continue to experience pressure as offshore investors veer from smaller emerging markets.

"Thailand is dealing with an almost self-imposed credit crunch and Malaysia is trying to fund a higher-than-expected fiscal deficit; only the Philippines seems relatively unscathed so far," DB said.

Deutsche Bank’s observations are supported by the Philippine government, particularly President Gloria Arroyo’s economic team which said that there will be no recession in the country, only economic slowdown.

On Wednesday, November 12, National Economic Development Authority Director General Ralph Recto, Finance Secretary Margarito Teves, and Budget Secretary Rolando Andaya made this assurance to the media after attending the budget hearing at the Senate.

"Recession means no jobs will be created next year and I don’t see that happening. There will be a slowdown. There is a slowdown this year already," Recto said.

He added that a significant number of investments in the country would save the Philippines from falling into recession.

Meanwhile, Teves emphasized the technical difference between economic recession and economic slowdown.

"Ang slowdown sa layman’s language ay kung yung neighbor mo ay nawalan ng trabaho. Ang recession kapag ikaw na mismo ay nawalan ng trabaho," he said.

"So mas matindi yung recession kaysa sa slowdown and it is generally reflected sa mga jobs. So magkakaroon tayo ng problema sa jobs but not in the same gravity as a recession," he further said.

The Philippine government has recently lowered its projected growth outlook for this year and the next, from the earlier target domestic growth of 5.5-6.4 percent this year and 6.1-7.1 percent next year to the current slower pace of 4.1-4.8 percent this year and 3.7-4.7 percent next year.

The government has also adjusted its peso-dollar exchange rate assumption for next year to 45-48 from 42-45 this year.

According to the International Monetary Fund, an economic situation is considered a global recession when growth in global output falls to 3 percent or below.

For the Southeast Asian region, the IMF has a growth rate forecast of 4.2 percent for next year. (AJPress, with reports from Inquirer.net and Philstar.com)

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