If the nations of Asia are to survive the current turmoil in their financial markets, we're going to have to take bold action, individually and collectively. The first order of business is to put our fiscal and monetary houses in order. This may mean acknowledging bad bank debts, hiking interest rates in order to slow currency speculation, and reducing budget and trade deficits. It will mean requiring our banks and companies to adopt the standards of transparency in financial reporting that the new global economy and financial markets demand. We will also have to continue deregulating our industries and, for those who have not yet done so, put an end to the protectionism that prevents us from becoming truly competitive.

We in the Philippines know all this from experience. For years, we suffered the weaknesses that afflict some of our neighbors, notably the persistence of protectionism in economic and business policies. But under the tutelage of the International Monetary Fund for nearly 30 years now, and especially during the past decade, we have faced up to our problems. It wasn't easy. Many sectors of our society suffered greatly, and some complained loudly. But we persisted and, with the help of the IMF and the courage of the Philippine people, we are ready to exit from the IMF program.

In 1986, we threw out the crony capitalism of the Marcos era and liberalized our financial and banking sectors. We assembled one of the best economic management teams in Asia. We have worked with our Congress to enact 165 reformist laws. Our privatization program is in full swing.

Having taken our medicine, we are a step ahead of some other countries in facing the current challenges. We now have a policy framework that rewards economic merit instead of political access. Our banking system is sound--Morgan Stanley puts it in the same league with Hong Kong and Singapore--and we have avoided the bankruptcies that have engulfed the region. Inward investment is surging, with this year's level five times that of 1996's. And inflation is under control at just about 5%. Yes, our currency has been dragged down by the Asian contagion, but our strong macroeconomic fundamentals--the strengthening of which has been pursued relentlessly--are there for all to see.

As a result of all this progress, we are scheduled to graduate from the IMF's program at the end of this year. We will then take courses at the master's degree level, so to speak: we will have a standby arrangement with the IMF, in case we need help in the future.

Many of the Philippine economy's new strengths are the result of policy reforms that the IMF has recommended and that other countries in the region must now come to grips with--chiefly, overturning the monopolies, cartels and oligarchies that stifle the energy and creativity of free enterprise. In addition, the deputy finance ministers of APEC, meeting in Manila early in November, identified four reforms we should adopt on a regional basis: 1) more cooperation to upgrade our domestic financial systems, 2) more surveillance of domestic markets to avoid a buildup of external debt, 3) cooperative regional financing in keeping with the IMF's oversight authority and 4) a bigger role, and greater resources, for the IMF.

If the countries of the region can adopt these measures, we will weather the current economic crisis and regain the momentum of the past decade. What was good medicine for the Philippines will help all of Asia become healthy again.