The creation of BIMP-EAGA served as a window for global opportunities for Mindanao and Palawan.  However, when the Asian financial crisis hit the subregion, the growth area was heavily affected.

The Asian financial crisis reduced the power of currencies in the ASEAN. As the four (4) member countries had weak currencies, intra-regional trading ceased to be a viable proposition. Further, BIMP-EAGA failed to tap markets external to the BIMP-EAGA for potential dollar earners such as tourism and exports.

In Mindanao and Palawan, the once successful air routes and sea linkages had to fold-up its operations. The Samal Island Casino Resort stopped operations due to the decline in the island’s tourism industry. There was also a noticeable decline in BIMP-EAGA activities during this time.

The individual country problems that hit BIMP-EAGA were even more serious and essentially refocused their energies and efforts internally. Aside from the financial crisis, the subregion was also affected by a number of calamities such as the El Niño and La Niña, oil price increases, and the Abu Sayyaf hostage incident in Sipadan. From this, it was imperative to look inward, and the only feasible individual country act is internal housekeeping. In an effort to insulate the entire country from the effects of the crisis, central governments came-up with new guidelines to affect self-preservation.

In the Philippines, a different scenario took place. During the respite in bilateral and multilateral agreements, the Philippines focused on setting the groundwork for a more determined performance in the BIMP-EAGA.  Foremost of these is the approval by then President Joseph Estrada of Executive Order 244.  This officially designated the MEDCo Secretariat as the Philippine Coordinating Office for BIMP-EAGA and the MEDCo Chairman as the Philippine-EAGA Senior Official.  Also, the Asian Development Bank (ADB) approved a technical assistance to further strengthen the capabilities of the MEDCo Secretariat and make more effective its participation in the subregion.

Despite the slowdown of BIMP-EAGA activities, the Philippines was able to push some policy reforms in support to the sustained development of the growth area. Efforts to negotiate the decrease in trade barriers between Mindanao and Sabah succeeded especially in the removal of three (3) potential export products for both areas from the sensitive lists. The Philippine Tourism Authority (PTA) extended the Travel Tax Exemption for EAGA-bound passenger to December 2001.  The Civil Aeronautics Board (CAB) announced a more liberalized civil aviation industry to include multi-designation of airline carriers, the co-terminalization and fifth freedom traffic rights.

The ADB also played a vital role in the subregion as the Regional Economic Cooperation Advisor for BIMP-EAGA.