Philippines

While the final cost of Typhoon Yolanda is still being calculated in the Philippines, the impact that the country’s low insurance take-up could have on the national economy is fast becoming apparent.

Long a key component of the Philippines’ economy, the construction industry is earmarked for strong growth next year, as the country moves to roll out new infrastructure, address its housing shortage, and to begin rebuilding the areas hit hardest by Typhoon Haiyan.

Lenders in the Philippines are readying themselves for a further tightening of regulatory oversight, with the requirements of Basel III, as adapted by the Bangko Sentral ng Pilipinas (BSP), the central bank, due to come into effect at the beginning of next year. While the transition is not expected to be overly burdensome, the cost of greater security could be a short-term dip in profits.

Several major highway and light-rail transit (LRT) projects set to be rolled out next year could finally ease serious congestion problems in the Philippines.

Citing solid growth, political stability, greater accountability and a low level of exposure to external shocks, Moody’s has joined Standard & Poor’s and Fitch in assessing the Philippines’ sovereign credit rating as investment grade, with the agency holding out the possibility of a further upgrade.

Buoyed by a burgeoning middle class and greater availability of financing, the Philippines’ automotive sector is set for strong growth this year, with sales for the usually slow month of August hitting a record high.