Philippines: Emerging Economy, Albeit With Vulnerabilities

Shrugging off the moniker “sick man of Asia”, Philippines grew to be one of the bright spots of the SEA region, with growth in Gross Domestic Product (GDP) by about 6.7% in 2017.

However, implementation of new tax measures, extrajudicial killings, and erratic policies are boring holes into investor confidence. In the first year itself, American investment pledges nosedived by 70%, while South Korea's, by 93%.

The implementation of the TRAIN Law, sees increased taxation, worsen inflation and further demoralise foreign investors. However, the Philippine government is confident it can achieve their targeted 4% inflation. Besides, a weakening currency may boost exports, BPO sector, and improve the purchasing power of remittance-sending overseas workers.

Yet, actual investment saw a steady growth under Rodrigo Duterte’s presidency, breaking the ceiling and hitting 10 billion USD in 2017 – a record high. The first quarter of 2018 also witnessed further growth by 44%, reported the Department of Finance.