Why Philippines could be the only bright spot in ASEAN right now

But there are some concerns.

According to BNP Paribas, not only is the Philippines’ GDP growth the highest in the region, over the past year or so it has de-coupled from the rest of Asia. Moreover, such growth has clearly not been financed by government spending. 

Here's more:

The Philippines’ GOVERNMENT debt as a proportion of GDP has declined over past couple of years from 68% to 41%. It’s one of the few countries in Asia to run a fiscal surplus.

A structural surplus, diversified export base and better governance (‘no corruption, no poverty’) prompted an upgrade in the Philippines’ credit rating last year, and we see no reason to expect things to deteriorate anytime soon.

Our only concern about the Philippines is that the surge in GDP growth has not been accompanied by an increase in investment growth, implying that the Philippines could run into supply side constraints. Since the early 2000s, investment as a proportion of GDP has declined from 25% to c20%.

Still, on balance, the Philippines looks a lot better than Indonesia, Malaysia, Thailand and India. Currency depreciation over the past three months (PHP down 6.7%) looks to be more due to contagion than fundamental factors.