Philippines and the risks from the corruption scandal

The ongoing investigation into corruption in the Philippines brings the risk of further protests over the coming months. So long as any unrest is limited in scale and duration, the economic and financial market impact is likely to be limited. The bigger risk is that, similar to Indonesia, the government turns to populist policies in a bid to appease protesters, resulting in higher risk premia on Filipino assets. The large current account deficit leaves the peso particularly vulnerable to downward pressure.