Thai-style coup in RP unlikely, says global investment report

Despite comparisons with Thailand and a long history of coup attempts, a successful military coup in the Philippines is unlikely due to an improving economy and the lack of a credible opposition to President Arroyo, a major foreign investment bank said.

In its latest global report, the Singapore-based United Overseas Bank (UOB) said Mrs. Arroyo is in a "stronger position" to fend off attacks until next year or before the opposition makes another attempt to impeach her.

The coming months, the report said, would give Mrs. Arroyo a little more time to concentrate on the slowly improving economy before another destabilization attempt can be launched against her.

"Despite the history of military-led coup in Philippines, the chance of a military coup in Philippines remains unlikely... despite the comparisons being made with the Thai Sept. 19 coup," the UOB report said, referring to the coup that ousted Thai Prime Minister Thaksin Shinawatra.

"President Arroyo is in a stronger position at least for the next 11 impeachment-free months after the failed impeachment bid in August... giving her the luxury of concentrating on improving the economy," it added, stressing that the lack of a credible opposition to challenge her rule also works in her favor.

Since her tumultuous assumption to office in January 2001, Mrs. Arroyo has been battling ouster moves and destabilization attempts from opposition groups and forces loyal to former President Joseph Estrada, who was deposed in the country’s second popular uprising.

Attempts to unseat Mrs. Arroyo included two impeachment attempts, the failed 2003 Oakwood mutiny and the alleged rightist-leftist coup plot last February.

The UOB said the strengthening of the peso in the third quarter came as a surprise as the currency rallied strongly on the back of the country’s better trade surplus, cumulative balance of payments surplus from January to August, and steady remittances from overseas Filipino workers as well as "some easing concerns on the political front."

The Philippines’ gross domestic product (GDP) grew 5.6 percent in the first half of the year from a year ago, near the lower end of official forecast of 5.5-6.1 forecast for the full year.

However, investment growth remained "disappointing" because of high interest rates, poor infrastructure and the government’s attempts to reduce the budget deficit.

Because of this, the UOB said the government must work on attracting more foreign investments to support its long-term growth.