Emerging East Asia\'s local currency bond markets are still expanding but risks to the outlook are rising given the prospects of tighter US monetary policy, slower economic growth in Asia, and persistent capital outflows, the Asian Development Bank (ADB) said Thursday. In its quarterly Asia Bond Monitor report, the ADB also warned that most governments in the region have missed the opportunity to raise cheap funds to finance critical infrastructure spending. \"Asia\'s bond markets and its borrowers are better placed to stand up to this latest round of global volatility than they were in 1997-1998 but tough times certainly lie ahead, \" Iwan Azis, Head of ADB\'s Office of Regional Economic Integration, said in a statement. \"The challenge will be to ensure the region can cope with higher borrowing costs and falling asset prices, which could hurt corporate balance sheets and dampen economic growth,\" Aziz said. The ADB estimates that Asia needs to spend at least USD 8 trillion on infrastructure between 2010 and 2020 to sustain economic growth. At the end of June, there were USD 6.8 trillion in local currency bonds outstanding in emerging East Asia, which is comprised of China, Hong Kong, Indonesia, South Korea; Malaysia, the Philippines, Singapore, Thailand and Vietnam, the Manila-based lender said. That was up 1.7 percent from March, but a slower growth rate than the 2.9 percent expansion in the first quarter of 2013, with investors now more cautious in the wake of the May announcement from the US Federal Reserve that it will soon start reducing its bond purchases. According to the ADB, local currency bond issuance in emerging East Asia also grew at a slow pace, as some borrowers held back in the face of higher funding costs around the region. There were USD 827 billion in new bonds sold between April and June, up 4.0 percent from the January-March period. To build resilience and support growth, the region needs to continue to develop more stable sources of funding, including more foreign direct investment and encouraging a wider range of bond investors, the ADB said. Insurance and pension fund investments, guarantees, and greater use of subordinated debt, alongside better project data, could also help channel more funds into transport, energy, telecommunications, and other infrastructure, it added. The ADB is a multilateral development finance institution dedicated to reducing poverty in Asia and the Pacific. Established in 1966, it has now owned by 67 members, mostly from the region, as well as the US, Britain and Germany.