The Philippines is expected to remain the most promising economy in Southeast Asia as the country performs better than the regional average, according to UBS Securities.
The financial services firm said in a new report that the Association of Southeast Asian Nations appeared to operate in a “different dynamic” as efforts to build a single economy progressed.
However, UBS noted that the Asean remained economically diverse—both in terms of size and level of development—even as it represented a population of some 600 million and a gross domestic product that was three-fifths that of Germany.
“Of the larger economies, we think the Philippines will continue to prove to be the most surprisingly impressive,” UBS said, citing analysis from economist Edward Teather.
The “Philippines, which recorded (a GDP growth rate of) 5.9 percent (in the first semester), is clearly surpassing the 10-year average growth rate,” it added.
With regard to the so-called Asean-5—the original and biggest economies in the group, including Indonesia, the Philippines, Malaysia, Thailand and Singapore—UBS said access to local capital markets was not difficult.
“We expect the Philippines and Indonesia to record a relatively healthy GDP growth in the context of the last decade,” UBS said.
“That context is important, because global and Asian growth is expected to be more modest in the coming years than before the global financial crisis,” it added.
Earlier this year, UBS said the Philippine economy might grow by 4.5 percent in 2012 considering that investment inflows to the country were indeed improving.
However, Teather said the improvement had not reached a point that good times ahead were ensured.
Back then, Teather said “favorable developments” and “clearer evidence of strengthening investment” were needed to be seen lest the apparent improvement turns into disappointment.
“Manila has been the place to be in early 2012,” he said. “The Philippine equity market has outperformed its peers.”