This is the first blog entry of what I hope to be regular updates from the financial sector and related areas across the East Asia and Pacific region. So, let’s see how the New Year began in Asia.
Unfortunately, the bad news keeps coming on the economies in the region in terms of exports and industrial output. Exports and industrial production fell 6.2 percent in Malaysia in November and exports from Thailand fell 18 percent  in November. Surveys of consumer confidence, business sentiment, and manufacturers across the region have all shown significant declines.
More rate cuts have taken place across the region. The most recent of which was in Indonesia, which reduced its benchmark interest rate  by 50 basis points (to 8.75 percent) to encourage bank lending.
There are signs on the horizon that governments across the region are also pressuring banks to lend. In Thailand, the central bank and ministry of finance are talking with state-owned banks to extend loans, particularly to small and medium enterprises (SMEs). In China, only 30 percent of the $586 billion economic stimulus plan is to come from the central government, with the rest largely coming from the state-owned banks. The state banks are sitting on close to $300 billion in cash, so there is an expectation that this cash may be deployed at the behest of the Government under this stimulus plan.
Also, fiscal stimulus plans are also still coming out of the region. Indonesia announced a $6.5 billion fiscal stimulus plan  to boost infrastructure spending. This fiscal spending will be supported by the proposed $5.5 billion in standby loans  from international financial institutions, including the World Bank and Asian Development Bank. Taiwan announced a $6 billion stimulus plan for the next four years as well. Finally, the Philippines this week issued  $1.5 billion in 10 year international bonds to support its spending plans. The issuance was four times oversubscribed and the yield was 600 basis points above 10 year Treasury bonds. This was the first international sovereign bond issuance in emerging Asia since June and its success may signal a wave of new issuances early this year by other southeast Asian governments.
Another positive sign in Asia came from the equity markets. The markets started the year on the upside. Emerging market indices in Asia are up by an average of 5.5 percent this year, with the Philippines taking the lead (up 9.7 percent) followed by Korea (up 8.3 percent).