The First Quarter In 2009 Has Seen Key Developments In The Philippine Defence And Security Arena

Aug. 1, 2009 - PRLog -- The first quarter in 2009 has seen some key movements within the Philippine defence and security arena.

These include the delivery of 15 T41-B trainer planes donated by South Korea and continued conflict with separatist rebel groups that has resulted in the kidnapping of both international and local officials.

The rebel group Moro Islamic Liberation Front (MILF) has reportedly abducted three teachers and another separatist group, the Abu-Sayyaf Group (ASG), has kidnapped three officials from the International Committee of the Red Cross. These recent attacks highlight the continued conflict between the government and the rebel group and their apparent inability to establish successful peace talks.

Recent political developments have seen President Gloria Macapagal Arroyo successfully fend off an impeachment attempt from her opponents. Arroyo was allegedly linked to kick-backs from a multimillion dollar telecommunications deal with the Chinese company ZTE. Despite an overwhelming majority voting in favour of Arroyo, it suggests the possibility that 2010 may mark the end of her time in power.

Furthermore, we caution that any legitimate attempt to extend her rule could result in protests and subsequent rioting which could tarnish the investment environment for foreigners.

Real GDP growth was higher that expected in Q408, with a 4.5% expansion that surpassed the consensus forecast of a 3.5-3.8% increase, and the full-year growth for 2008 reached 4.6%. Although this underscores the resilience of the Philippine economy during deteriorating economic times, we remain sceptical when considering its ability to fend off the unfolding global recession. In view of this, we retain our below consensus forecast of 2.8% for 2009.

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