National Economic and Development Authority (NEDA) Director General Arsenio Balisacan yesterday said that the Philippines has more than enough foreign reserves to shield it from shocks coming from the recession in Japan and the turmoil in Russia.
Balisacan said the local economy is resilient enough to withstand any shocks.
Protecting the economy against these shocks, he said, is the country’s large foreign reserves, which as of November stood at $78.98 billion, and provides a buffer of 10.7 months’ worth of imports of goods and payments of services and income.
“Years ago, if there’s a hiccup in Japan, the impact in the Philippines quite big . but that’s no more the case. We have several sources of foreign exchange now, like remittances, receipts from tourism and service, and even the diversifying manufacturing industry,” he said.
Balisacan was reacting to queries about the impact of the ongoing recession in Japan and Russia’s hiking of its key interest rate to protect its local currency. (Related stories on page B5).
“While the Philippines is quite integrated, I think its situation is quite unique. Our advantage, is if you look at the character of the economy, it is now more resilient to shocks occurring in a particular country or region,” Balisacan said to reporters on the sidelines of Asean PPP Networking Forum held in Manila on Tuesday.
Meanwhile, Balisacan sees the slowing Japanese economy and the weakening Russian ruble as an advantage for the Philippines, as these situations may provide more job-generating foreign direct investments (FDI) to the country.
“For example, firms in those areas would locate or outsource their activities to countries like the Philippines that has a very strong outsourcing industry,” he said.
“At present, Japanese investors are looking for new locations of their industries. They are looking at us. Many Japanese industries are visiting our export processing zones,” he said.