The Philippines is expected to sustain economic growth this year and outperform many of its Asian neighbors, according to a report by Moody’s Economy.com Inc.
In the report, Nikhilesh Bhattacharyya, Moody’s Economy.com analyst, said the Philippines is projected to grow by 3.3 percent this year—down from 4.6 percent last year because of higher unemployment brought about by the global economic crisis.
“The Philippines, branded the sick man of Asia because of its relatively slow growth in recent years, will outperform many of its neighbors, with growth of 3.3 percent expected in 2009,” Bhattacharyya said.
The slow economic growth in Southeast Asian economies would not support the increase in labor force, leading to higher unemployment rates, he added.
The analyst suggested that the governments could help sustain employment with crackdowns on illegal immigrants and incentives for businesses. “The official figures are expected to hide rising underemployment as factories cut production, hurting workers’ hours as well as their salaries.”
For this year, Moody’s Economy.com expects Singapore, which is usually the most stable in the region, would be the worst hit among the Association of Southeast Asian Nations (Asean). It is a regional bloc of 10 countries that also includes the Philippines.
Singapore is projected to contract by 4.4 percent this year compared with a 1.2 percent expansion in 2008.
Thailand, which normally compared with the Philippines, would be hit hard—particularly its tourism industry—by political instability and the global downturn. “Continuing political problems and allegations regarding the treatment of refugees, along with a weak global economy, will dissuade tourists this year. The Thai economy is expected to contract this year as the much-needed fiscal stimulus is delayed.”
Indonesia is projected to grow by 3.9 percent, even with the holding of a presidential election this year.
By contrast, Malaysia’s anemic growth would border on recession in the first half of 2009, the report said. But given Malaysia’s flexible labor market, the unemployment rate will not rise markedly.
Moody’s Economy.com Inc. is a subsidiary of Moody’s Corp. and is engaged in economic research and analysis. Its commentary is independent and does not reflect the opinions of Moody’s Investors Service Inc., the credit ratings agency that is also a subsidiary of Moody’s Corp. –Maricel E. Burgonio, Reporter, Manila Times