By Keith B. Richburg
Washington Post Foreign Service
Sunday, February 22, 1998; Page A26

MANILA—Roberto F. De Ocampo was looking, and sounding, like a man content.

It was the last week of January, and De Ocampo was in his final days as the Philippines' finance secretary before leaving the job to run for the Senate. Seated at the head of the long, polished conference table, and enjoying a glimpse at the room's panoramic view of Manila Bay, he began ticking off the accomplishments of his four-year stint.

He had been the second longest-serving finance secretary in the Philippines' postwar history. In each of his four years, the country ran a budget surplus. New measures had just been enacted to improve the notoriously inept tax collection system. A new value-added tax is already in place. "I'd say it's been a good four years," he said.

De Ocampo has another reason for the self-assured smile. The Philippines -- for years derided as the region's economic laggard that missed out on the miracle growth of the 1980s -- so far has managed to avoid the worst of the Asian economic meltdown of the '90s. The local peso has lost value -- but not nearly as much as the Indonesian rupiah, the Korean won or even the Thai baht. No banks here have gone bust. While other countries are contracting, experts say the Philippines will grow by more than 2 percent this year. The trade deficit remains manageable, and there is far less of a problem with short-term, high-interest debt to repay.

What's more, as the three hardest-hit Asian countries -- Thailand, Indonesia and South Korea -- have been forced to seek billions of dollars in emergency bailout money from the International Monetary Fund, Manila is now set to pull off what De Ocampo believes will be a regional economic coup. After three decades of running the economy under IMF supervision, the Philippines is about to exit from the IMF's tutelage, sending a signal that Filipinos are at last ready to try going it alone.

"We've been in the IMF for 30 years," De Ocampo said. "That's because the economy needed to be propped up. Now it doesn't need to be propped up. That could send an important signal that our economy can stand on its own feet.

"What's going on now is a perception game," he added. "For us to be moving out as others are moving in is a good sign. It signals a role reversal."

Other politicians, economists and independent analysts agree that the Philippines has been far less affected than other Asian countries, though not all share De Ocampo's optimism that the country can continue dodging the worst of the crisis. "The Philippines is not at the same level of crisis," said Vinay K. Bhargava, the chief World Bank representative. "Our own view is that should not be a source of comfort. They are not out of the woods."

Managing to avoid the meltdown of its neighbors is seen as a combination of good policies, good luck -- and an accident of timing. The Philippines has been spared in part this time around because it went through its own financial crisis in the 1980s, during the last days of Ferdinand E. Marcos's dictatorship, and the revolution that ousted him prompted a cleanup of the corrupt banking system he left behind.

Having missed the "Asian miracle" boom of the last decade, the Philippines had not embarked on the same kind of speculative frenzy, particularly in real estate, that led to the bubble bursting in places such as Bangkok. And because investors once wanted to avoid the Philippines, where coups were then likely, there was much less free-flowing foreign capital to waste on unnecessary projects and investments.

Also, while other countries, notably Indonesia, have been hard hit by a shortage of liquidity, Philippine banks have few problems finding hard currency. Decades of poverty have forced millions of Filipinos to go abroad for work, and they send back money to their relatives, providing a stable and steady source of foreign exchange.

Some here muse that the Philippines' current situation is a bit like the line from the old American blues song: Been down so long, bottom looks like up.

"Sure, we're much better, because all the rest have come from a high climb," said Sen. Edgardo Angara, a candidate for vice president and a fierce critic of the government's handling of the economy. "When you've been growing at 11 percent, naturally when you fall, the fall is much harder. But we've only been growing an average of 3.5 percent."

De Ocampo, who hopes to win a Senate seat based on his record as finance secretary, likes to think it is sound management rather than good luck that has kept the Philippines from feeling the worst. The trade deficit is half that of Thailand's, the banking system is more closely regulated, and external debt is a more manageable $37 billion, he said. "We are less affected because our economic fundamentals are sound," he said in the interview at his office.

But De Ocampo agrees his country has gained wisdom from past pain. "We learned our lesson from the '80s," he said. "What put the banks in difficulty in Thailand and Indonesia happened here in the '80s, except we called it cronyism." The financial system here underwent a restructuring in 1992-1993 which, among other reforms, forced banks to separate out their bad assets and created a stronger, more independent central bank with greater regulatory powers.

Still, many here believe the Philippines should not begin boasting just yet.

Defending the peso against further devaluation has meant sky-high interest rates, making it harder for exporters to borrow. Some overseas workers likely will get sent home from hard-hit Asian countries -- South Korea already has said it will send several thousand Filipinos back -- adding to the unemployment problem here and reducing the remittances coming in.

Also, while De Ocampo can claim four years of budget surpluses, most of those were profits from selling government assets under the privatization plan -- and now little is left to sell.

Bhargava of the World Bank said, "It's inevitable that there will be corporate bankruptcies or major distress in the corporate sector, and that will spill over into the banking system."

The bank's concern, he said, is the likelihood of more unemployment and a slashing of government spending on the poor to reduce overall expenditures. The bank hopes to complete a nationwide assessment soon to determine which groups are most likely to be hurt by the current economic crisis.

An unknown factor is the May presidential election. National campaigns here traditionally inject millions of dollars into the economy, but it is unclear whether the pattern this year will be the same. Also, while all the candidates running to replace President Fidel Ramos profess to follow his reform and liberalization policies, the financial markets may react adversely to a win by a candidate with a more populist agenda.

Even while remaining quietly confident, the government is hedging its bets. As the Philippines prepares to exit from IMF supervision, the administration is also busy negotiating with the fund for a standby credit facility, just in case.