"When the situation for bank lendings still awaits the outcome of the extensive financial restructuring...new bank credit will definitely shy away as credit sources adopt a highly cautious and restrained approach in the region," he told an Asian debt markets conference in Hong Kong via teleconference call.

Espiritu said fierce competition in bank lending, weak regulatory systems and rapid growth in the corporate bond market set the stage for speculative attacks.

The finance secretary also said issuers' costs would remain high because of the volatility in the regional currency market and weak corporate earnings.

"It is safe to assume that (yield) spreads will take time to return to pre-crisis level," he said, citing the example of the Mexican financial crisis. Investors would demand far greater transparency andtimely information from borrowers, he added.