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The BRICs get the bulk of the emerging-market coverage from the mainstream media. But the Philippines continues to demonstrate the type of growth that should garner the southeast Asian nation of 95 million people the same attention that Brazil, Russia, India and China ordinarily receive.
The Philippines earned its first-ever investment-grade rating today as Fitch upgraded the country’s rating from BB plus to BBB minus. The upgrade comes on the heels of 6.6% increase in the nation’s GDP last year. The International Monetary Fund expects the Philippines’ economy to grow another 6% this year.
The fourth quarter of 2012 marked the country’s 55th consecutive quarter of growth. Its economy is expected to expand another 20% over the next five years.
Major improvements in the country’s manufacturing and construction sectors have helped spur such rapid growth. Many people credit President Benigno Aquino, who has overseen the Filipino economy’s revolution since he was elected in 2010. Aquino has stabilized the Philippines’ political landscape, safeguarding it against the corruption that had plagued the island nation in prior years.
Inflation has dipped below 4% on Aquino’s watch, and the Philippines’ government debt of 37% is manageable compared to other emerging markets.
Thanks to the country’s improving economic outlook, the Philippines has boasted one of the best performing stock exchanges in the world the last few years, with the Philippine Stock Exchange (PSE: PHS) more than tripling since early 2010. Its benchmark Manila stock exchange has been the best-performing emerging market index in the world in 2013, rising 18% year-to-date.
Some headwinds remain. Tax collection is still a problem despite strides made by President Aquino in that area. Per-capita income remains relatively low. Moody’s and Standard & Poor’s still give the Philippines a “junk” rating.
But the growth is undeniable. If you’re an emerging-market investor, the Philippines should have your attention by now.