1. Emerging Markets in the Global Economic Crisis Dr. Bernardo M. Villegas

2. No Great Depression Black Thursday 1929 Stock Market Crash Passive Federal Reserve System Ignorance of Keynesian Pump Priming Panic in the Banking Sector Unemployment Rate of 25% Complete Dominance of the US Economy in the World World Financial Market Illiquid

3. No Great Depression Real Estate Bubble Proactive Federal Reserve System US Government Pump Priming No Panic in the Banking Sector No Crash in the Stock Market Unemployment Rate Manageable Countervailing Power of Emerging Markets Liquidity of Sovereign Funds Massive intervention of European governments Black Monday 2008

4. Traditional Engines of Growth: Growth Rates of Major Economies F – forecasts Source: World Economic Outlook Database, IMF, April 2009

5. Traditional Engines of Growth: GDP Growth Rates F – forecasts Source: World Economic Outlook Database, IMF, April 2009

6. Global Growth Slowdown: Threats to World Growth World GDP to fall from 3.2% in 2008 to -1.3% in 2009 Financial markets remain difficult. Funding markets have only gradually narrowed despite of government guarantees. Asset values fall sharply across advanced and emerging economies Widespread disruptions in credit are constraining household spending and curtailing production and trade. Slump in global demand has led to a collapse in commodity prices. Major stock price indices are 50-60% below 2007 peaks; US house prices 27% below peak More price declines in housing are expected Rise in protectionist sentiment and protectionist policies implemented

7. Global Growth Slowdown: Global Outlook Recession accompanied by financial crisis Output in the advanced economies is now expected to contract by almost 4% in 2009. Growth in emerging and developing economies is expected to slow sharply from 6.1 % in 2008 to 1.6 % in 2009, under the drag of falling export demand and financing, lower commodity prices, and much tighter external financing constraints. Inflation pressures are subsiding. Global monetary and fiscal policies are providing substantial support. G20 agreement to boost international money supply by $250 billion IMF to receive $500 billion to help struggling emerging economies

8. The New Global Business Environment Global business environment will be characterized by greater caution, less liquidity, lower cross-border capital flows, tighter regulation and less risk-taking. Poor ratings for the soundness of banking systems, financial sector distortions and impeded access to finance will have significant effect on the outlook for financial systems. Increasing risk of political unrest caused by severe economic downturn, which has led to rising unemployment and increased economic hardship. Source: ViewsWire, Economist Intelligence Unit, May 19, 2009

9. The Most Powerful Economies in the World *n/a – not available Source: IMF, World Economic Outlook Database, April 2009

10. Growth Rates Asia: The Most Dynamic Region

11. Emerging Engines of Growth BRICA

12. Emerging Engines of Growth The Next Eleven

13. US, EU, Japan and BRICA Emerging Engines of Growth

14. Consumer Trends in Asia Non-income consumption factors Expanding middle class Diversity of consumer tastes and lifestyles “Mallification” of Asian cities Demographic gift stage in South and Southeast Asia Rapid aging in Northeast Asia and Singapore Widespread use of English The telecom revolution Spread of university education Asia: The Most Dynamic Region

15. Selected Sunrise Industries in Asia Agribusiness Mining Triple Ts: Transport, Telecom, and Tourism Infrastructures Automobiles Consumer durables IT-enabled and IT services Logistics and retailing Health care and medical tourism Education Construction and real estate Four Fs: Food, Fashion, Furniture, Fun Asia: The Most Dynamic Region

16. Threats Net factor income will be slightly lower as the recession in OFWs’ host countries will affect remittances and deployment growth Slowdown in consumer spending Industry sector on a slowdown in 2009 and 2010 Slowdown in exports High though slowing inflation rate Higher government deficit Higher trade deficit Depreciating Peso The Philippine Economy

17. Opportunities Continuous influx of East Asian tourists Expansion in mining and energy investments Pump priming in infrastructure spending Above-average growth in agricultural production due to improved infrastructure support Expansion in low- and medium-costs housing and office buildings Increase in demand for BPO services Medical tourism and retirement villages The Philippine Economy

18. BUSINESS ECONOMICS INDICATORS Source: UA&P/BEC Estimates, March 25, 2009 FF The Philippine Economy

19. Emerging Markets in the Global Economic Crisis Thank you.