World | Philippines
Arroyo left red-faced after faux pas on bailout package
Philippines President Gloria Arroyo left people puzzled on Thursday after countries and institutions said they were unaware of a plan she announced to set up a regional fund to deal with financial turmoil.
- Agencies
- Published: 23:47 October 16, 2008
- Analysts in Manila said Arroyo could have been misinformed, or had jumped the gun on what was essentially a scenario exercise.
- Image Credit: Gulf News Archive
Manila: Philippines President Gloria Arroyo left people puzzled on Thursday after countries and institutions said they were unaware of a plan she announced to set up a regional fund to deal with financial turmoil.
Arroyo said on Wednesday the World Bank had committed to initially provide $10 billion to a fund to buy toxic debt and recapitalise banks in the region hit by the financial crisis.
Analysts in Manila said she could have been misinformed, or had jumped the gun on what was essentially a scenario exercise.
She said the 10-member Association of South East Asian Nations, its three dialogue partners of Japan, China and South Korea, the Asian Development Bank and the International Monetary Fund could also contribute to the fund.
However, a World Bank official said the bank has no plans to contribute to the fund, and the Asian Development Bank (ADB) said it was too early to talk of contributions because the region was economically sound and in no imminent danger from global turmoil.
"Although real economies may be affected, the banking sector remains fairly sound. We don't really have much toxic assets," ADB Managing Director General Rajat Nag said.
The loan-to-deposit ratio of most Asian banks is around 80 per cent, according to Merrill Lynch data, which means that they can repay depositors if needed without needing additional funds.
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