How vulnerable is the Philippines to financial and banking problems like those in Thailand?
If Thailand did not happen, we would not be facing this kind of problem. We are so different from Thailand. We have a sound, strong financial system here. Before, Thailand had a very big fiscal surplus [but] now it has a deficit. In our case [it has been] the reverse. Before we had a deficit, now we have a modest surplus. Banks have [just] 10.9% exposure to the property market. Q: But aren’t banks hiding things? A: I don’t blame [foreigners] for saying that because they see so many condominiums going up. But they don’t know what is happening here. Here, most of the financing is done through pre-selling, especially the residential condo units. Even before they start the construction, [developers] have already received 25% down payment. What happened in Thailand was that the finance companies were the ones heavily exposed. How did they source the loans extended to the property developers? They were authorized to receive deposits from the public; secondly they got loans from the banks; an
