The IMF said that after the market correction in May and June this year, emerging markets in Asia demonstrated resilience and immediately bounced back.
IMF senior adviser Masahiko Takeda said the Philippines, in particular, showed stronger rebound than other emerging economies in the region.
"In the Philippines, the rebound following the equity market correction in May and June was proportionately larger than the average rebound in the region," Takeda said. "What it means is that while the rebound was a general phenomenon, the Philippines was also getting additional push from its fiscal consolidation."
Takeda said the performance of the Philippine market indicated that investors are making more discrimination based on fundamentals and the country benefited from this added push.
"Valuations are also slightly below historical averages but the Philippines is somewhat above the rest of Asia," Takeda added. "In general this reflected the region’s general ability to withstand shocks and Asia continues to be a good destination for foreign direct investments."
According to Takeda, the initial impact of the military coup against Thai Prime Minister Thaksin Shinawatra appeared to be contained to the Thai market, "at least for the moment."
According to Takeda, the fiscal stance in the region was neutral and appropriately so, but long term challenges are still present, particularly spending pressures from aging population.
"Sustaining the region’s economic performance will require a rebalancing of growth," Takeda said.
Investments in the Philippines, in particular, needed to be mobilized in order to sustain economic growth especially since consumption continued to be the main engine for growth.
"The Philippines needs more investments than consumption," he said. "To compare, investments here is equivalent to about 15 percent of gross domestic product while it is at 30 percent in India and 45 percent in China, " the IMF said.