Over the past three decades, the Asian markets for the most part have grown relatively rapidly. Hong Kong, Singapore, South Korea and Taiwan have recently been referred to as the Four Asian Tigers, however the recent growth of the Philippines has caused investors to wonder when there will be five tigers instead of four. The Asian Times reports on the current success of the Philippines along with the global implications:
The Philippines, long seen as a sick man of Asia compared with the neighboring economic tigers, has something to roar about of its own, after consistent strong economic growth was recognized this month by Standard & Poor’s increasing the country’s debt rating to its highest in nine years.
S&P raised its rating on the Philippines to BB+, one level below investment grade, from BB. The move, which will help to cut borrowing costs, reflects “the country’s strengthening external position, with remittances and an expanding service export sector continuing to drive current-account surpluses,” according to S&P analyst Agost Benard in Singapore, as quoted by Bloomberg News.
The Philippines is attracting favorable notices on the back of strong exports underpinned by an increasingly strong outsourcing industry and a growing technology sector. The country has overtaken India as the world leader in the business support sector, according to an IBM annual report – this despite Filipino workers coming at a premium. There work now goes beyond traditional call centers to process outsourcing and shared services to groups.
Exports in May surged almost 20% from a year earlier to hit a 17-month high of US$4.93 billion, the National Statistical Office of the Philippines reported on July 10. They rose 8.2% in the first five months of the year compared with the year-earlier period to $22.4 billion. The outlook is also remarkably strong – the purchasing mangers’ index (PMI) compiled by the Philippine Institute for Supply Chain Management, rose to a 12-month high of 59.8 in May. A level above 50 signals economic expansion; below 50, contraction.