The Philippines' Ramos: `We Have To Go Through This'

President Ramos discusses the Asian bailout

President Fidel V. Ramos thinks the kinds of economic reforms he instituted in the Philippines are just the right prescription for the rest of the region and lauds the International Monetary Fund's efforts to implement them. He spoke with Asia Editor Sheri Prasso at the Asia-Pacific Economic Cooperation (APEC) summit in Vancouver on Nov. 25.

Q: The Philippines has avoided some of the more severe repercussions of the Asian financial crisis. What role did the IMF's 30-year supervision over the Philippines play in that?

A: The Philippines used to be called the "sick man of Asia." Now we are being called the new Tiger cub most likely to get out of the woods first. You play golf? Tiger Woods! Get it?

We have been doing our reforms for the last 5 1/2 years. They are in the law, and therefore very transparent, predictable, honest, and enduring. And that is precisely the prescription being given by the IMF to those economies that have been hit hard by national crises, starting with Southeast Asia. As we are moving out of IMF supervision, other countries considered Tigers or emerging Tigers are entering into an IMF program.

Q: Do you think Asian leaders sufficiently recognize the kinds of structural problems that need to be addressed in the region, or are they in denial?

A: We give credit to Thailand and Indonesia for immediately accepting the IMF program. This indicates that they are willing to work hard and suffer some pain in order to accept and take the medicine that is prescribed for the sick patient. We have to go through this.

It took us 30 years from the beginning of our IMF program until the end of this year, which is when we expect to graduate. But we were pursuing wrong policies for 25 years.

Our overall assessment as leaders is that the condition, as well as the potential, of the Asia-Pacific economy is still good.

Q: Are you concerned about Japan's economy and its growing level of exports? Does it threaten the Philippines?

A: No, we have had a large trade gap with Japan and Korea. But that's because our imports from them, as well as from the U.S. and from Europe, have consisted mainly of capital equipment. Now our trade gap has declined by some 6.4%--which is what we have been predicting all along--and will continue to decline in the next 12 months.

Also, at APEC, Japan said don't worry about the failure of banks and investment houses because they have...a very high internal rate of savings.

Q: Are you confident that the economic reforms you have instituted can continue after your presidency?

A: Of course, because they are legislative measures. They're laws. The next President of the Philippines, whoever he or she is, must faithfully implement the laws of the land. I am confident that whoever succeeds me will be able to do that. I am making sure continuity endures by ensuring the administration party, my party, wins big in the next elections, meaning President, Vice-President, and majority in the Senate, House, and local governments.

And I will be around to advise. I will give advice--whether solicited or unsolicited--in my role as elder statesman and taxpayer in the private sector.