amando m tetangco, jr : current economic issues in the philippines remarks by mr amando m tetangco, jr, governor of the central bank of the philippines ( bangko sentral ng pilipinas ), for the focap forum, makati, 12 february 2008. * * * ladies and gentlemen of the foreign correspondents association of the philippines, special guests, good morning. i have been requested to discuss current economic issues this morning. since you monitor our economy very closely, by the minute in some cases, i will not bore you with the details. instead i will present the big picture, so to speak, so you will understand where i am coming from. then i shall focus on the monetary and banking policies of the bangko sentral ng pilipinas. as you know, the philippine economy chalked up impressive gains on various fronts in 2007. our gdp growth was the highest in three decades while our inflation rate was the lowest in twenty years. as i have said, we achieved the ideal convergence of high growth amidst 20year low inflation in 2007. we also had a healthy external position, ending 2007 with record high gross international reserves and unprecedented balance of payments surplus. at the same time, our banking system is stronger, with record high resources and deposits as well as capitalization way above the standards set by the bangko sentral and the bank for international settlements. as a result, we are experiencing a very stable macroeconomic environment that is validated by market confidence in the philippines. this is the big picture. let me now discuss the challenges that the bsp faces in the pursuit of its mandate of ensuring stable prices and a sound banking system. the first challenge is the anticipated us economic slowdown. there is a consensus among multilateral institutions, investment banks and credit rating agencies that the us economy will slow down in 2008. however, there is no consensus yet on whether the recent problems in the us subprime markets will push the us economy into a mild slowdown or usher in a recession. either way, a weaker us economy is expected to slow down global growth, although growth in emerging markets could temper this. in the case of the philippines, the projected us slowdown is not seen to have a significant immediate impact. however, we recognize that a longer - than - expected us recession could take its toll on the economy. given this, the bsp will continue to monitor global developments to ensure that appropriate measures are implemented, when

– globalization for ireland. to be sure, ireland had long been an open economy, but one whose international economic relationships were predominantly with britain and its former empire ( and, for migration, with the united states ). since independence, both domestic politics and the international economic and military environment had encouraged higher barriers to trade and investment. now these were to be progressively dismantled as ireland opened up to a wider and deeper engagement with the global economy. one key dimension of this opening up is of course trade : exports as a percentage of gdp grew from 24 per cent in 1960 to an astonishing 101. 5 per cent in 2011 ( as forecast ), placing ireland in a very select league of countries ( malaysia and singapore being the other ones of significance ) for which exports exceed gdp. the pattern of exports also shifted. predominantly agricultural in the 1950s, today ( while agriculture and agribusiness - based exports are far from negligible ) exports are dominated by manufactures and services. the shift to globalization was accompanied eventually by a rapid and more or less complete convergence in living standards to the highest levels of western europe. once a laggard, whose relative position had slipped since independence, ireland became seen as a european growth leader – even though much of the growth in the 1990s was really a catchup to the production frontier as enough jobs were at last being generated to employ essentially all of those who wanted work and sucked in returned emigrants and new immigrants as well. speaking to an audience of accountants, i must naturally remind you, though, of the accounting and measurement challenges that have been presented by the extraordinarily globalized nature of the irish economy as it evolved over the years. these include national accounting – which i know is not so much the professional concern of this audience today – and also corporate accounting and reporting. for it was not only the volume of exports that was remarkable, it was their character, largely produced by foreign owned multinational corporations and with a high profit component reflecting returns on r & d and other investments accruing to the owners and not to irish residents. that distinctive pattern of globalization meant that the most common measure of economic performance – gdp – is quite misleading for ireland, exceeding as it does by over 25 per cent the aggregate statistic which better measures the national component of production, gnp. though gnp growth was certainly very strong in the period from 1994 – 2007, and reached a very high level in per person terms, growth rates and levels of gnp have been much lower