The full impact of the global economic slowdown is expected to be felt this year, according to economic analysts. And while conservative banking policies have spared the Philippines from the worst of the crisis, the country is also starting to feel its impact, with exports falling and overseas workers being sent home.
Even before the credit crunch blew up in the face of Americans, affecting the rest of the world, the Philippines was already suffering from weakening investments. The global crisis aggravated the trend. In the first 10 months of 2008, foreign direct investments plunged 47 percent compared to the same period in 2007, reaching only $1.418 billion, according to data from the Bangko Sentral ng Pilipinas. Some quarters observed that having a low level of FDI to begin with helped shield the country from the worst of the crisis. But this should not be used as an excuse to neglect structural reforms that are needed to lure more job-generating long-term investments.