S&P says Philippine economy a 'rare bright spot'

Manila (Philippine Daily Inquirer/ANN) - The economic forecast for many countries these days ranges from shaky to dismal, especially among industrialized countries. Yet, the Philippines and Indonesia stand out as rare examples of emerging Asian economies with positive rating outlooks.

According to a report titled "Two Emerging Asian Economies Stand Out With Positive Outlooks Amid Sobering Economic News Elsewhere," just published on RatingsDirect, Standard & Poor's Ratings Services said that these two countries were among only 10 in the world that have positive rating outlooks, and none were industrialized economies.

Generally, the bond markets are treating the Philippines and Indonesia pretty well. And the cost to insure the two countries' debt using credit default swaps also illustrates the favorable treatment the credit markets are giving the two countries.

Meantime, Southeast Asian countries have reaffirmed plans to integrate their economies by 2015, carrying hopes the move will make the region a key growth leader for the global economy.

At the end of the three-day World Economic Forum for East Asia held in Bangkok Friday, member-countries of the Association of Southeast Nations (Asean) committed to pursue the Asean integration plan as scheduled by 2015.

Under the economic integration plan, their financial systems and capital markets will be interconnected, trade will be easier through the elimination of many tariffs, and freer movement of labor across borders will be allowed.

In a statement released by the World Economic Forum (WEF), Southeast Asian leaders cited the benefits of an integrated region. "Leaders of four Asean countries reaffirmed the 10-member grouping's commitment to form the Asean Economic Community as scheduled in 2015," WEF said in the statement.

WEF said Asean members also raised hopes the group would be joined by other Asian countries in the future.

The economic integration by 2015 is expected to transform Southeast Asia into a major growth force in Asia and the world, together with China and India.

The Philippines is supportive of the region's integration, saying doing so would help accelerate growth of member-economies. The country's economic officials believe the integration will help member-countries pursue the goal of "inclusive" growth.

Economists said that while the Philippines and other emerging Asian countries were cited for their respectable growth rates despite problems hounding advanced Western economies, they continued to suffer from growth that was not inclusive.

"Inclusive" growth is one that actually translates to poverty reduction and does not benefit only the rich. In the Philippines, poverty incidence remains high even as the economy has consistently grown over the years. With a report from Reuters

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