2013’s Biggest Surprise? The Philippines

In an excellent overview of the political and economic changes that occurred in the Philippines in 2012, the Financial Times this week discussed how the country, long the “sick man” economy of Southeast Asia, is primed for a significant take off, putting it in a much higher class of fast-growing economies, like Indonesia, India, China, and others. The paper rightly gives credit to the president, Benigno Aquino III, for overseeing new investments in infrastructure, taking a personal interest in—and reaching—a real peace deal with rebels in the south, taking on the Catholic church to make birth control more accessible in one of the most devoutly Catholic nations in the world, and targeting high-profile corruption cases. To be honest, like many Southeast Asia analysts, I did not expect very much from the Aquino administration, and his policies—and his willingness and ability to enact them—have come as a major surprise. Though well-liked before becoming president, Aquino seemed like a relatively aimless inheritor of his famed family name, having few signature issues or legislative attempts to his name in politics previously. He is, by far, the biggest shock of any Southeast Asian leader that has come in the past five years, even more so than the political competency of Yingluck Shinawatra in Thailand.

In 2013, the outlook for the Philippines is, if anything, brighter. With the peace deal in the south, the area can finally reach its economic potential, while the increased access to birth control should help the population stabilize and result in a smaller but more effective workforce, and force less Filipinos to head abroad to find work, as has happened for decades. The growing confidence in the country’s domestic investors —the Financial Times cites the Ayala Group plowing some $2 billion in the Philippines in 2012—is bound to eventually also help spark greater foreign investment, though the country’s old image still hinders it. Still, South Korean, Chinese, Indian, and some Western Information Technology firms already have seen the potential. 2013 looks very strong for the archipelago.