Investment Risk Remains High In Philippines Due To Growing Terror Threats

ZAMBOANGA CITY (Mindanao Examiner / 27 Feb) – The Dublin-based Research and Markets warned Tuesday of possible terror attacks in the Philippines because of the alignment between the Abu Sayyaf and Jemaah Islamiya groups, blamed for the spate of bombings in the country.

“Terrorist strikes in the Philippines are likely to become increasingly frequent over the next 16 months. The alignment between the Abu Sayyaf Group and Jemaah Islamiyah is expected to fuel terrorism as is the growing relationship between these organizations and the Rajah Solaiman Movement,” it said on its website http://www.researchandmarkets.com.

Rajah Solaiman was established in 2002 with the ostensible aim of creating a theocratic Islamic state across the Philippines—supposedly to rectify what it views as the artificial influx of Catholic and Christian influences that had been first introduced by the Spanish and then consolidated under the United States.

It represents a highly fanatical fringe element of Balik Islam — a legal movement of Christian converts or reverts as they like to be known to the Muslim faith.

Filipino authorities linked the Rajah Solaiman group to the 2004 bombing of the SuperFerry 14 off Manila that killed more than 100 passengers and the synchronized bomb attacks in February 2005 in Manila, General Santos City and Davao City that left scores of people dead and wounded.

The Research and Markets said the threat of terrorism will be further attenuated by weakening governance and increasing political and social instability.

The Philippines is to hold national elections in May, but this early the opposition fear that massive cheating may mar the polls to favor the administration candidates.

“Terrorism, political instability and social instability will undermine economic stability. Economic growth is likely to be much weaker than expected in 2006 and 2007 as personal consumption expenditure weakens and private investment continues to contract. Weakening economic growth will push the public sector borrowing requirement and the debt stock higher,” it further said.

It also said that the deteriorating economic and credit fundamentals are likely to trigger significant capital outflows from the Philippines, led by the country’s banking sector, which has turned increasingly toward exchange rate arbitrage for generating profits.

“Condor Advisers expects the peso to depreciate sharply in 2007 while the stock market, domestic fixed income market and international bonds all suffer serious corrections. Investment risk in the Philippines is high and will remain high through 2007,” it said.

Research and Markets is a leading source for international market research and market data, whose clients include major research publications from most of the leading publishers, consultants and analysts. (Mindanao Examiner)