First, given the buffers I have mentioned earlier, we should face the global headwinds with an underlying belief in the resilience of the Philippine economy. The message is that 2008 has been a tough year and 2009 will most likely be tougher – but our economy is in a better shape to weather this global storm.
As this crisis progressed, Korea and other emerging market countries were unable to avoid its impacts even though they did not have large sub-prime mortgage related exposures. Rather they experienced deteriorating foreign currency supply and demand conditions and credit crunches, as funds flowed out due to deleveraging by overseas financial institutions in response to heightened concerns about credit risk.