Forecast for the Philippines

The domestic political situation is now calming down, although the government has yet to resolve the Abu Sayyaf hostage crisis in the south. The trial of the former president, Joseph Estrada, could also raise tensions. Policymaking should become easier, now that the government enjoys a small majority in the new Senate, although this may be eroded over time. One policy priority is to contain the fiscal deficit in view of the forecast slowdown in economic growth in 2001. …