Korea and the Philippines today are among the East Asian countrie_
most heavily burdened with external debt. This is a result, of course,
of heavy borrowing to finance current account defici=s it, the 1970's.
How Co account for these deficits ar_i an analysis of the two countries'
re_pon_es and their consequences is the subject of thi_ paper.
Taking balance of payments crisis to mean a sharp rise in the
current account deficit, financed by running down foreign exchange
reserves or external borrowing, two period_ of crisis have been identified
for both countries, 1974-7-I and 1979-82. While the focus is on theme
periods the analysis is put in the perspective also of the trends of
the preceding decade
