Wednesday, 11 February 2009

Philippines expected to outperform Asian neighbors

By Des Ferriols
The Philippine Star

MANILA, Philippines - Previously branded as the sick man of Asia, Moody’s Ratings said yesterday that the Philippines would outperform many of its neighbors this year, with growth projected at 3.3 percent.

Moody’s said that Southeast Asia would see a reversal of roles this year and the Philippines would lead growth despite the anticipated slowdown in economic expansion.

Moody’s assessment came in the wake of the latest warnings from the International Monetary Fund (IMF) which admitted for the first time that the world’s most developed economies have slipped into depression.

“This year will probably be the most interesting for Southeast Asia since the Asian financial crisis,” said Moody’s associate economist Nikhilesh Bhattacharyya. “We expect tradition to be turned on its head and ASEAN members to undergo a role reversal,” he added.

Bhattacharyya said Singapore, usually the most stable in the region, would be the worst hit amongst the ASEAN trading bloc, together with Malaysia and the big falls in output and milder rises in unemployment.

“Indonesia and the Philippines, traditionally less stable, will slow, but chances of recession are low,” said Bhattacharyya.

According to Bhattacharyya, the Philippines specifically, would outperform other economies in the region although growth would be slower than 2008. Consumer spending would be one of the strongest drivers.

Bhattacharyya said the Philippines has been branded the sick man of Asia because of its relatively slow growth in recent years. But this time around, the country would keep within its growth range despite the slowdown that would result from the global recession.

Bhattacharyya said Singapore is expected to suffer the largest swing in its economy, with a 4.4 percent contraction expected in 2009 compared with a 1.2 percent expansion in 2008.

On the other hand, Bhattacharyya said that Indonesia is expected to hold an uneventful election after a long period under a “dictatorship where political freedom was unthinkable over a decade ago.”

Bhattacharyya said Indonesia is expected to grow 3.9 percent and said this is “not too bad” considering the state of the global economy.

However, Bhattacharyya said nearly all other economies in the group would experience slow economic growth that won’t keep pace with labor force growth, leading to higher unemployment.

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