Country Risk Service Philippines Updater
The Economist Intelligence Unit, April 2013, Pages: 18
Benigno Aquino, who was elected president in 2010, continues to enjoy strong support, meaning that the Philippines looks set to enjoy a period of relative political stability in 2013-17. However, the president's attempts to hold his predecessor, Gloria Macapagal Arroyo, to account for alleged corruption have made enemies of those who benefited from her administration's patronage and may thus prove destabilising. Real GDP grew strongly, by 6.6%, in 2012. The Economist Intelligence Unit forecasts that it will continue to expand at a rapid rate in 2013, growing by 5.9%. Economic growth will remain rapid in 2014-17, at 6.1% a year on average. Budgetary underspending has been a problem, although efforts are being made to address it. These appear to be paying off, with underspending dropping to around 3.5% of the targeted level in 2012, from 5.3% in the previous year. Although the trade account will remain in the red in 2013-17, the current account will continue to post surpluses. Remittances will remain an important source of foreign exchange
The trial of Ms Macapagal Arroyo for corruption involving alleged large kickbacks finally began on March 7th. Her conviction would boost Mr Aquino's anti-graft credentials, but if he is seen as less willing to investigate members of his own administration, political instability could mount.
In March the government lifted a two-year ban on new mining applications. In theory the move should boost mining investment, but policy uncertainty will continue to constrain growth in the sector.
Country Risk Service Philippines Updater
Philippines at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2013-17: Political stability
Central scenario for 2013-17: Election watch
Central scenario for 2013-17: International relations
Central scenario for 2013-17: Policy trends
Central scenario for 2013-17: Fiscal policy
Central scenario for 2013-17: Monetary policy
Central scenario for 2013-17: Economic growth
Central scenario for 2013-17: Inflation
Central scenario for 2013-17: Exchange rates
Central scenario for 2013-17: External sector
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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