Outlook for 2011-15

• The resounding victory won by Benigno Aquino in the May 2010 presidential election suggests that the Philippines is on course for a period of relative political stability.
• Mr Aquino's predecessor, Gloria Macapagal Arroyo, will use what influence she still has in Congress (the legislature), the Supreme Court and other bodies to block attempts to investigate her for alleged corruption.
• Government revenue will remain low as a proportion of GDP, and the Economist Intelligence Unit expects the budget to remain in deficit, averaging 2.4% of GDP in the forecast period.
• Real GDP grew by 7.3% in 2010, the fastest pace since the mid-1970s, but we forecast that growth will slow to 5.2% in 2011 and will then average 5.6% a year in the remainder of the period.
• Inflation will accelerate to 5.3% in 2011, owing mainly to higher oil and non-oil commodity prices, before slowing to an average of 4.6% in 2012-15.
• After falling in 2011 in response to a rise in oil imports, the current-account surplus will grow in 2012, before declining again from 2013 as a proportion of GDP. The surplus will be equivalent to 3.1% of GDP on average in 2011-15.

Monthly review

• Merceditas Gutierrez resigned from her post as ombudsman on April 29th, ten days before the she was due to face an impeachment trial in the Senate (the upper house of Congress).
• The fiscal deficit stood at P26.2bn (US$607m) in the first quarter of 2011, representing only 23.3% of the projected deficit for the period, mainly owing to underspending on infrastructure.
• On May 5th the Bangko Sentral ng Pilipinas (the central bank) raised interest rates by 25 basis points, taking overnight lending and borrowing rates to 6.5% and 4.5% respectively. The bank began to raise rates at its previous meeting.
• The minimum wage in the capital, Manila, is set to rise by 5-6% from May 26th, following an agreement between government officials, employers and trade unions.
• Consumer price inflation reached 4.5% in April, up from 4.3% in March, according to the National Statistics Office (NSO). This was the highest rate of inflation since April 2009. Core inflation accelerated to 3.8% in April.
• The NSO has reported that the value of merchandise exports totalled US$4.3bn in March, up by 4% year on year-the slowest pace of growth in exports since October 2009.