Given the Philippines’ improved macro fundamentals, the upshot of the dramatic increase in global liquidity for our country has been a strong external position, which has allowed us to build up our international reserves to an all-time high of $ billion as of end September and, consequently prepay over $ billion in debt in 2006 and the first half of 2007.
Both models would, over time, lead to a greater supply of safe assets as well, but that is not primarily the point. Safe assets are a stock concept which can be created in various ways.