By JIMMY CALAPATI

As fear of fear deepens financial rout in the US , Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said that the central bank is ready to provide cash to banks needing liquidity. The central bank has gross international reserves of $36.7 billion. Yesterday the central bank already sold dollars to help protect the peso.( Please see story on page B12) Guinigundo said that informal talks with other Asian central bankers showed that the impact on the region is "minimal". He said what is important is that the BSP together with other central banks continue to monitor developments. Asian Development Bank president Haruhiko Kuroda earlier warned that while Asia has ample liquidity, several asset markets, particularly real estate, were potentially vulnerable to shocks.

"We need to establish best practices for handling liquidity shortages or ensuring effective financial sector safety nets. Also, existing arrangements need to be more flexible to resolve weak assets ‘on’ or ‘off’ financial institutions’ balance sheets."

"It’s now time for Asia to move forward on its path toward greater financial integration and to develop the foundations for regional stability," Kuroda said.

"We provide liquidity first", Guinigundo said. BSP Governor Amando Tetangco said Monday that banks can turn to the repurchase facility the BSP offers.

He added that banks are better capitalized, and can absorb shocks.

After the 1997 crisis, banks were required to set aside funds appropriate for risks being taken in line with the implementation of the Basel 2 framework, an international benchmarking system.

BSP said that banks’ capital adequacy ratio (CAR), stood at 15 percent as of end-2007, above the BSP’s required minimum of 10 percent.

Kuroda said that what is feeding the financial rout is the uncertainty across markets.

Meanwhile, rating agency Standard & Poor’s yesterday said that the direct exposures of rated banks in Asia to Lehman Brothers are not expected to be significant enough to materially damage their credit profiles.

"Asian banks’ strengthened balance sheets, as a result of healthy profits over the vibrant economic environment during the past half a decade, can withstand the impact of likely losses from direct exposure," S&P said in a statement.

The statement also warned that S&P continues to believe that the risk to Asian banks is more from the impending economic slowdown and market turmoil than from direct exposure to the distressed US financial institutions.

S&P also revised the outlooks on the ratings on 12 Asian banks, financial institutions and insurance companies to stable from positive, and at the same time affirmed the ratings.

Among those revised where Phil. National Bank and Malayan Insurance.