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NEDA: Philippine economy to slow down, but won't crash

abs-cbnNEWS.com | 10/12/2008 5:50 PM

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The Philippine economy may slow down amid the global financial crisis but there is no chance of a crash, National Economic Development Authority (NEDA) deputy director general Augusto Santos said Sunday.

Santos appealed for calm as he predicted workers could still get their bonuses this Christmas.

"There is really no cause for panic," Santos said in an interview over the ABS-CBN News Channel on Sunday. "The moment that the people panic, that will make the situation worse."

"We will still have positive economic growth. It will contract but it will not go negative," he said.

Financial analyst Astro Del Castillo, meanwhile, said depositors of local banks need not worry about the financial crisis currently gripping the United States.

Del Castillo said local banks are not affected by the crisis since the financial market and the banking sectors are different.

He said that the banking sector is more stable now due to lessons learned from the Asian financial crisis in 1997.

Santos and Castillo both advised depositors that they should keep their deposits in banks.

"Do not panic. That is my advise to the depositors. Keep your deposits in the bank, because the moment the depositors panic, then that will exacerbate the situation," Santos said.

"Our situation is stable. The Philippine economic fundamentals are sound. My suggestion is do not panic," he added.

Del Castillo, meanwhile, advised worried depositors to split their deposits into several accounts in different banks to be sure that their deposits are insured by the Philippine Deposit Insurance Corp. (PDIC).

Plan for OFWs

Santos also said the government was working on a contingency plan for overseas-based Filipino workers who may be affected by the global financial crisis.

The local economy has for years relied on the country's estimated eight-million workers abroad sending money home.

Last week, economic experts said the Philippine economic growth would likely fall to 4.3 percent this year and 4.2 percent in 2009.

The Philippine economy however grew 7.2 percent last year, the highest in 30 years, the government said. With reports from the Agence France-Presse and Atom Araullo, ABS-CBN News

as of 10/12/2008 5:52 PM