Southeast Asian finance ministers vowed vigilanceSaturday in the face of economic risks such as capital outflows caused by the USFederal Reserve's "tapering" of its massive monetary stimulus.Officials said the 10-member Association of Southeast Asian Nations (ASEAN) waswell-placed to withstand the winding down of the US quantitative easingprogramme, at a meeting that underscored host Myanmar's return to theinternational diplomatic stage.The region's economic outlook "remains robust, anchored by rising domesticdemand stemming from private consumption and infrastructure investment," theministers said in a joint statement."We remain vigilant in managing the downside risks, including capital outflows,volatile currency movements, emerging inflationary pressures and tighteningfinancial conditions, which could dampen economic growth," they added.Some emerging economies, such as Indonesia, suffered sharp capital outflows andlosses to their currencies after the Fed began to reduce its massive stimulusprogramme, as the world's largest economy emerges from a crippling financialcrisis. Indonesian Finance Minister Chatib Basri said that, as well as the tapering, theregion must be ready for the possibility of the Fed raising its policy interest rate inthe future.This may have an impact on the capital outflows from emerging markets, includingASEAN, back to the US," he told reporters.But he added that ASEAN has made preparations for the shift in US policy, stressingthe importance of tackling fiscal and current account deficits as well as maintainingsound financial institutions.Under quantitative easing, the Fed "creates" money to buy government debt fromfinancial institutions, which helps lower long-term interest rates, in theorystimulating the economy by encouraging companies and individuals to borrow.Last month the US central bank reduced its stimulus spending by another $10billion, to $55 billion a month, saying the economy was strong enough to support animproving jobs market.- Strong fundamentals -Low interest rates in the West following the 2008-2009 financial crisis promptedinvestors to seek out higher returns elsewhere, such as in buoyant emergingeconomies such as Indonesia, the Philippines and Thailand.With markets now turning their attention to the prospect of rising interest rates inthe United States, the fear is that a rapid repatriation of investment funds couldsend stock markets and currencies sliding in emerging Asia.But experts note that so far the impact has been limited, thanks partly to theregion's efforts to strength its defences since the 1997-98 Asian Financial Crisis."The macro-economic fundamentals of ASEAN countries are strong -- much strongerthan in 1997," Asian Development Bank president Takehiko Nakao said at themeeting."Governments have pursued sound macro-economic policies. Banks are well capitalised. Financial regulations and supervisions have been strengthened.Countries now enjoy larger foreign reserves."After the initial tremors sparked by the start of US tapering, announced in December,financial markets in Southeast Asia have since shown signs of stabilising."Countries are trying to take efforts to shore up their fiscal positions and I thinkinternational investors have noticed that. Some of the volatility is being muted,"said Tony Nash, managing director at IHS Consulting in Singapore.The ADB expects the ASEAN region to show economic growth of 5.0 percent in 2014and 5.4 percent in 2015."Domestic demand of ASEAN countries is solid. The US recovery continues tostrengthen. The eurozone will return to positive growth this year and Japan'seconomy today is stronger than before," Nakao said.ASEAN, which represents a region of 600 million people, wants to establish acommon market and manufacturing base to better compete with China and India.The ministers brushed aside doubts about whether a 2015 target to create an ASEANEconomic Community will be achieved, saying they were committed to meeting thegoals.Myanmar, for years a source of embarrassment for ASEAN's more democratic states,took over the rotating chairmanship of the regional bloc this year after reforms thatincluded freeing hundreds of political prisoners.