roubini ofsovereignbondage creditratingsinindiaindonesiaphilippines 09jul2012

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July 9, 2012

Of Sovereign Bondage: Credit Ratings in India,Indonesia and the Philippines

By Michael Manetta, Adam Wolfe and Ayoti Mittra

Three Countries, Three Credit Rating Stories: Indonesia was upgraded to investment grade by two of thethree major credit rating agencies earlier this year; we use Indonesia as a benchmark to judge the

Philippines prospects for a similar upgrade in the coming 24 months. Meanwhile, Indias investment -

grade status has come under question as its current account and fiscal deficits have deteriorated.

Cracking the Ratings Code: Indonesias upgrade followed a major subsidy overhaul and a shift towardinflation-targeting by the central bank. An improvement in the tax base alongside tighter control on

government expenditures is a major reason the Philippines is tipped to receive an upgrade soon. Likewise,

Indias commitment to fiscal consolidation in 2003 helped to earn it an upgrade to investment-grade,

though its abandonment of this commitment in 2008 could lead to a downgrade.

Populism and Its Discontents: Subsidy spending remains a problem for all three economies, as it ispolitically difficult to reign in and crowds out government investment that could otherwise boost national

productivity.

The Importance of Revenue Sources: All EMs face difficulties in establishing efficient and reliable fiscalrevenue streams, but Indias reliance on non-tax revenues is particularly worrying.

Debt Sustainability vs. Debt Finance-ability: Indias twin deficits have coincided with mountinggovernment and external liabilities, while policy missteps have made the country more reliant on portfolio

flows to cover its current account deficit. Additionally, the banking sector s ability to absorb more debt is

increasingly questionable. Indonesia and the Philippines have both managed to maintain balanced or

positive current accounts over much of the past decade.

Ratings Outlooks


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Three Countries, Three Credit Rating Stories

In 2007, Standard & Poors awarded India an investment-grade sovereign credit rating,1

the third major credit

rating agency (CRA) to do so since 2004, citing the countrys strong economic prospects and external balance-

sheet, a deep capital market and weak but improving fiscal position. By contrast, Indonesian and Philippine

sovereign debt remained well below the investment-grade threshold, still mired in the shadow of large external

debt overhangs, poor fiscal governance and volatile macroeconomic environments. But times they were a-changin,

and the five years since have been a boon for Indonesia: Earlier this year, Indonesian sovereign debt was rated

investment-grade by two of the three major CRAs, in recognition of the countrys much-improved fiscal and

external debt levels, small deficits and stabilized macroeconomic environment. Meanwhile, the Philippines stands

poised to break through the investment-grade plane in the next two years, having, like Indonesia, undertakenseveral key reforms that put the country on a more solid fiscal trajectory.

For India, the past five years have been less fortuitous. Since S&Ps upgrade, persistent current account and fiscal

deficits have left Indias national balance sheet in disrepair, the result of structural inefficiencies and policy

shortcomings that have in tandem prevented Indias economy from realizing its vast growth potential. These

macroeconomic and institutional deficits culminated in downgrade watches issued by S&P and Fitch during the

week of June 13, foreshadowing Indias loss of investment-grade status just six years after obtaining it.

Figure 1: Credit Rating Timeline


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Cracking the Ratings Code

Sovereign credit ratings have taken on new importance in the post-global financial crisis world. Rebalancing the

global economy requires massive amounts of investment in EMs to boost labor productivity and employment

opportunities, raise incomes and ultimately rebalance growth toward domestic demand. There are extensive

savings available in global markets to finance such investment, but for many EMs, it comes at a high price. As credit

ratings frequently determine a countrys borrowing costs in international capital markets, at least for EMs,

reaching a higher sovereign rating has become an integral part of many EM governments long -term development

plans. Many institutional investors are restricted by mandate from investing in below-investment-grade securities,

rendering investment grade status a highly coveted award.

Sovereign credit ratings are ultimately a measure of potential risk, not potential reward. Ratings reflect a countrys

ability and willingness to repay its debts. Unsurprisingly then, political stability, policy flexibility and institutional

quality are at the top of most CRA lists of criteria for establishing a credit rating. Quantitative measures, such as

the quantity of international reserves and the composition of debt, are also important factors. Of course, each CRA

emphasizes certain criteria above others, but in the end, a sovereign credit rating reflects the efficacy and

efficiency of policy-institutional factors that play a fundamental role in determining the macroeconomic

environment. Indeed, the ratings histories of India, Indonesia and the Philippines the focus of this analysis

illustrate how unusual it is for a healthy macroeconomic environment to emerge without the support of favorablepolicy-institutional factors. For example, Indonesias recent return to investment grade status seems obvious from

a macro-variable perspective: Small fiscal deficits, low and falling public debt-to-GDP, a strong FX reserve balance,

strong economic growth, fairly stable inflation and so on. But this macroeconomic environment came about thanks

largely to two major policy-institutional changes in the middle of the last decade: A major subsidy reform in 2005,

which helped lower total subsidy spending by 33%, and the introduction of an inflation-targeting monetary policy

regime by Bank Indonesia, also in 2005, which not only stabilized inflation rates but also reduced interest and

exchange rate volatility.2

The Philippines underwent a similar institutional overhaul in the 2000s, beginning with its own introduction of

inflation targeting in 2002, in line withthe general shift to inflation-targeting regimesacross EMs in the late 1990s

and early 2000s Fiscal consolidation began in earnest in 2005 06 with tax reform under Gloria Macapagal Arroyo
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accept a broader development mandate, and since 2008 the regulatory trajectory in India has reversed, with the

FRBM targets softened and pushed back until at least FY2015.

Figure 2: Primary and Fiscal Deficits to GDP Through 2011 (%)

Source: Bank Indonesia, IMF, RGE

Figure 3: Outstanding General Government Debt to GDP (%)

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Figure 4: Gross Debt-to-GDP Across Emerging Asia at end-2011 (%)

Source: IMF

Figure 5: Inflation Trends in India, Indonesia and the Philippines (%, y/y)

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Figure 6: GDP Per Capita in the Region (USD, 2011)

Source: Moodys Statistical Handbook

Populism and Its Discontents

To be sure, even a seemingly healthy macroeconomic environment can mask policy-driven distortions that credit

ratings should capture. In contrast to Moodys and Fitch, S&P left Indonesia one notch below investmen t grade in

April 2012 in light of the governments failure to secure additional subsidy reform for the third year in a row. S&P

rightly pointed out how sensitive Indonesias fiscal position is to movements in the global price of oil, and even

periods of relatively low oil prices have left Indonesias subsidy expenditure above nearly all of its peers on a

relative basiscertainly above that of India and the Philippines.3

Figure 7: Indonesia Outspends Its Peers on Subsidies (% of GDP)

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The difficulty the Indonesian government has had pushing through additional subsidy reform reflects a challenge

that nearly every sovereign faces: How to reform populist policies that create economic distortions and drain

much-needed public funds. For emerging markets, this is a particularly pressing issue given the cost of financingfiscal deficits and large-scale infrastructure projects necessary to boost potent ial growth. Indonesias government

has spent almost twice as much on subsidies as public investment every year since 2003.4

India now finds itself in a similar position, with subsidies outstripping investment in each of the past four fiscal

years. In India, subsidies only account for about 15% of Indias total central government expenditure, compared to

almost 25% for Indonesia, yet Indias fiscal and primary balances are in considerably worse shape. Interest

payments present a considerable fiscal cost, amounting to 3.2% of GDP in 2011, or 22% of total central

government expenditure. Even after stripping this out, the sheer size of outstanding debt to GDP forces India toface large debt principle repayments, amounting to 1.2% of GDP in 2011, which is captured in the primary balance.

But much of this can be, and is, refinanced, as state ownership of most of the financial sector provides a captive

market. Defense spending is another major expense for the Indian government, equivalent to about 3.2% of GDP

in 2011, compared to just 1.2% for Indonesia and 0.8% for the Philippines. But given the regional geopolitics of

South Asia, elevated defense spending isnt so surprising, or reckless. However, as neither of Indias national

partiesthe Congress Party and the Bharatiya Janata Party (BJP)appear able to form a government without

coalition partners pooled from Indias regional parties, whose primary negotiating position seems to be extracting

rents from the central budget to bring home to their states, it will prove politically difficult to restrain the growth

of subsidies and government salaries. Indeed, India continues to raise the minimum support price (MSP) for

agriculture products each year, crowding out funds that could otherwise be invested in much-needed fixed capital,

which would ensure these products actually made it to the market before spoiling.

Meanwhile, Indonesia and Philippineshave the somewhat unusual problem of often underspending their allotted

budgets: Indeed, the Indonesian government undershot its expenditure target in nine of the past 10 years, by an

average of 4%. While such conservatism certainly improves the fiscal balance, the spending shortfall usually comes

at the expense of public investment projects. Bureaucratic inefficiencies are often blamed, though as we

highlighted above, the desire for investment-grade status also influences the degree to which fiscal authorities are

willing to force spending out the door. This is tricky, because while rating agencies obviously see low deficits as a


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Figure 8: Public Capital Expenditure Often Falls Short of Budgeted Levels (IDR billion)

Source: Bank Indonesia

The Importance of Revenue Sources

Revenue sources are another crucial aspect of public finance that ratings must take into account, as dependable

income streams are often difficult to establish in EMs for both political and institutional/logistical reasons. This isparticularly problematic in India, where tax revenue is just under 50% of total revenue, compared to almost 75% in

Indonesia and 85% in the Philippines. In general, taxes are considered a more stable source of income for

governments than nontax revenues linked to natural resources or asset sales. Taxes are usually levied as a

percentage of nominal variables, such as income or consumption, and thus rise as the general price level and real

output/consumption rise. Revenue from natural resources or asset sales, by contrast, will rise only with inflation in

that particular sector, and the amount of resources/assets available to generate revenue is typically fixed.

Figure 9: Indias Tax Revenue-to-Expenditure Shortfall Is Among the Largest in Asia; Indonesias Is Among theSmallest (% of GDP in 2010)

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However, establishing a broad tax base can be difficult. Tanzi and Zee (2000) of the IMF highlight three of the most

formidable challenges to tax base development: The size of the informal economy, limited tax collection capacity

and poor data quality. There is no question that these three factors pervade India, Indonesia and the Philippines tosimilar degrees. All three countries have large informal sectors and are plagued by inefficient (and often corrupt)

tax-collecting bureaucracies. The big three CRAs have identified a low tax-to-GDP ratio as an area of needed

improvement in Indonesia, despite having the smallest tax revenue-to-expenditure gap among the three. The

Philippines has likewise had its own problems with pushing through unwelcome tax reforms, a reason continually

cited by CRAs for not upgrading Philippines sovereign rating. But Indias situation warrants the most concern, in

our view, given the enormous dependence of the state on capital receipts, or asset sales, to generate revenue. In

2011, capital receipts accounted for a whopping 37% of central government income, more than income taxes

brought in.

Figure 10: India Has the Smallest Tax Base Relative to Total Revenue Among the Three (2011)

Source: India Ministry of Finance Bank Indonesia Haver RGE

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concerns about the banking sector could quickly mutate into financing questions about the sovereign. Indias

particular variety of financial repression forces banks to hold government paper with a relatively low return, while

the governments contingent liabilities necessarily include the state-owned banks, which weakens its balance sheet.Public-sector banks control about 75% of the market in India, and the largest bank, the State Bank of India (SBI),

has about a 17% market share. The central government has been required to regularly top up the state banks

capital base; INR146 billion was budgeted in FY2013 for this purpose. In return, Indias commercial banks are

required to invest 25% of deposits in government securities, helping to contain the sovere igns domestic financing

costs. Clearly, the banking system poses a significant contingent liability risk to the sovereign.

Additionally, Indias current account deficit has widened since 2008 and the financing quality of the deficit has

deteriorated. Whereas FDI fully covered Indias current account deficit until 2009, it now covers only about 58%,leaving India more reliant on short-term portfolio flows to meet foreign exchange needs. The current account

deficit is being driven by strong public-sector consumption and low real interest rates that sparked a decline in

savings, in excess of the decline in investment.

As is clear, this situation has arisen largely because of policy-institutional choices.As we have outlined elsewhere,

Indias persistent current account deficit is tied closely to the governments persistent fiscal d eficits, which have

been possible to sustain thanks to financial repressive policies and regular punts on fiscal consolidation programs.

The deterioration in financing quality of the countrys external deficits is in turn a function of poor governance that has undermined Indias immense growth potential. The end product is a highly inverted national balance sheet in

which the governments liabilities can be expected to increase dramatically during any economic downturn, similar

to what Southeast Asia experienced in the late 1990s. Moreover, while the Philippines and Indonesia can rely on

the US$240 billion Chiang Mai Initiative to provide FX swap lines in an emergency, the RBI only currently maintains

a US$2 billion swap agreement with the South-Asian Association for Regional Co-operation members, of which it is

the largest FX holder.

Figure 11: Current Account Deficits (% of GDP)

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government, but also the severe external dislocation that took place following the Asian financial crisis. Indonesia

in particular suffered a massive external devaluation in 1998 that never reversed and was accompanied a painful

recession and several (small) external defaults. Yet this external adjustment vastly improved the countrys externalbalance thereafter. Meanwhile, the Philippines has been enjoying a current account surplus and healthy FX

reserves sustained by robust remittance inflows from overseas Filipino workers (OFW) that form 10% of GDP.

Figure 12: Moodys External Vulnerability Indicator Reveals India Overtaking Indonesia in 2012

Source: Moodys

Note: Moodys external vulnerability indicator measures short-term external debt, currently maturing long-term

external debt and nonresident deposits as a ratio of official foreign exchange reserves.

Figure 13: Indias Elevated Total Debt Stock Narrows Policy Space to Offset Shocks (% of GDP)

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Going forward, our views on India, Indonesia and the Philippines largely correspond with their current ratings

trajectories of the CRAs. India remains stuck in a policy-institutional crisis that continues to worsen and has so far

shown little sign of impending resolution. Indonesia faces its own policy challenges, such as subsidy reform andcontingent liability exposure via the state-owned banks, but we believe its institutional setup is more flexible and

resilient than Indias, putting the country in a better position to handle external shocks and capitalize on the

positive momentum of the past several years in terms of credit worthiness. Likewise, the Philippines has

undertaken fiscal reforms to broaden the tax base and improve the fiscal balances, yet much remains to be

achieved. Still, given strong macroeconomic fundamentals, we see Philippines on the right track to receive a rating

upgrade in the next 18-24 months, while India will lose its investment-grade status if it cannot shift policy making

in a more productive direction.

Ratings Outlook: India, Indonesia and the Philippines

India: Dodging a Downgrade Should Be Easy, But Delhi Needs to Move

We can look back at Indias 1991 balance-of-payments crisis to gain some perspective on the countrys current

vulnerabilities. That crisis was sparked by persistent fiscal and current account deficits similar to todays, which led

to a sharp decline in investor confidence. India posted its largest current account deficit ever in Q1 2012 at

US$21.7 billion, leaving a 4.4%-of-GDP deficit for the 2011-12 fiscal year. Meanwhile, the fiscal deficit for FY2011-12 came in at 5.7% of GDP, nearing the post-FY1991 record. The combined twin deficits nearly touched that of

FY1990-91, and motivated the CRAs shift to negative sentiment. However, Indias FX reserve position is much

stronger now than in the 1990s, which will certainly help to delay a crisis from setting in, though it will not be

enough to prevent a crisis without a preemptive policy response. Just like in 1991, India easily has the

macroeconomic potential to escape this trap; the only real question is whether the government will act in time to

prevent a serious balance of payments crisis.

Figure 14: Current Account and General Government Fiscal Deficit to GDP (%)

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Figure 15: Indias FX Reserve Position is Much Stronger Now Than in the 1990s

Source: RBI, RGE Calculations

Economic reforms undertaken in conjunction with an IMF financing in 1991 helped to boost Indias trend growth

rate to 7% from below 5% previously. The reform effort during the 1990s simplified Indias tax code, encouraging

an increase in the aggregate savings rate, while the opening up of Indias economy made it more resilient to

external shocks. Indias total external trade was less than 20% of GDP in 1990, which may have protected it

somewhat from the global business cycle, but also made it extremely difficult to earn the FX necessary to fund its

current account deficit once investor sentiment shifted. Growth in Indias tradable sector helped solve this

problem, with total trade now at about 50% of GDP. By the early 2000s, Indias external balance had improved

markedly, which in 2004 prompted Moodys to upgrade India to an investment -grade sovereign credit rating. S&P

remained less convinced, citing Indias weak fiscal profile, but in 2007 decided to grant an upgrade.

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the Congress Party or the BJP reliant on regional parties who are only interested in extracting rents from the

central budget to bring back to their home states, making economic reforms more difficult.

Figure 16: India Remains Less Business-Friendly (tax rate as % of profits, USD cost per export container)

Source: World Bank Doing Business Report

Nevertheless, the steps that need to be taken now are much smaller than those in 1991, and even small policy

moves in the right direction should lead to lower yields on Indian debt. Multinational corporations still want to

invest in India, but a heavy regulatory burden, which lately has become erratic as well, and comparatively high

operations costs have kept Indias FDI inflows below potential and forced India to rely on portfolio flows to finance

its current account deficit. Pranab Mukherjees decision to step down as finance minister, and Manmohan Singhs

decision to take on the portfolio himself in the interim, presents a possible opening for India to show that it will

not spend resources pursuing controversial tax claims on foreign investors, which should boost investor sentiment.

Additionally, while INR devaluation only brought India pain in 1990, its now-larger export sector should be able to

take advantage of its new competitiveness in international markets. The trade balance should be further

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any, FX revenue via exportsborrowed heavily from foreign creditors, accumulating substantial external debt

denominated in USD. When the financial crisis that began in Thailand spread to Indonesia, leading to a break in the

fixed USD/IDR exchange rate, the currency mismatch among these firms assets and liabilities led to panicked USD-buying in the FX market, putting further pressure on the rupiah and creating a vicious cycle of depreciation, more

rupiah selling and thus a larger external debt burden in local currency terms. The rupiah lost more than 350% of its

value versus USD in 1998 alone, pushing private external debt to almost 80% of GDP; public external debt also

approached 80% of GDP, but the vast majority of the latter constituted official development assistance.

Short-term external debt was also particularly problematic, and the central banks efforts to slow the rupiahs slide

drained reserves to just 46% of total short-term external debt by the end of 1997. Despite the concentration of

external debt in the private sector, Indonesias sovereign credit rating suffered massively as a result of thesedepreciations: Standard & Poors relegated the countrys foreign-currency sovereign credit rating to selective

default three separate times between 1999 and 2002. When it emerged from its last default, in September 2002,

external debt-to-GDP had fallen to a more manageable 63% (from more than 100% in 1998), while total

government debt had fallen to 60% (from more than 80% in 1998). The rupiahs steep devaluation following the

onset of the crisis also helped push the current account back into surplus via an improved trade balance, which,

coupled with IMF loan packages, bolstered official FX reserves to more than 200% of remaining short-term

external debt by end-2002. External debt rescheduling also helped reduce the countrys outstanding external debt

stock, and it was the conclusion of these negotiations that pulled the country out of selective default by the end of

that year (the IMF loans were extinguished in 2005).

Ratings upgrades came in rapid succession in 2003 as reserves continued to grow. The reduction in both external

debt-to-GDP as well as public debt-to-GDP helped bolster investor confidence as well, though one sticking point in

particular weighed on the countrys credit rating outlook: A lack of reform on fuel subsidies. This was partially

remedied in 2005 when the Yudhoyono government canceled subsidies on diesel oil used by industry and fuel oil

(while keeping gasoline, diesel and kerosene subsidies), lowering total fuel subsidy spending by more than 33% the

following year and earning Indonesia ratings upgrades from all the major CRAs.

Figure 17: Standard Deviations of Key Nominal Macroeconomic Variables for Indonesia Before and After

Introduction of Inflation Targeting in 2005


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Indonesias relatively impressive economic performance through the worst of the global financial crisis, the

stabilization of key macroeconomic variables, a growing stockpile of foreign reserves and persistently small fiscal

deficits all contributed to the countrys return to investment -grade ratings for Fitch and Moodys this year.Moreover, even as gross public and external debt continue to rise in absolute terms, they have fallen sharply as a

share of GDP, to just 22% and 25% respectively, a far cry from the 80-100% levels of 1998-99.

Figure 18: Indonesias Official Foreign Reserves to Short-Term External Debt

Source: BIS, Haver, RGE

Still, S&P has resisted giving Indonesia its final investment upgrade due to the continued lack of subsidy reform,

citing risks to the fiscal balance stemming from Indonesias expensive subsidy program. This years reform attemptfell apart in the eleventh hour as the Golkar party, an important member of the governing coalition, abandoned

the cause in order to bolster its position with the public, who were vociferously opposed to subsidy reform. We

can expect this kind of political jockeying to continue from now until the 2014 election, limiting the upside risk to

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Figure 19: 5y CDS Shows Philippines in Line with Countries with Superior Credit Rating

Source: Bloomberg

Currently the Philippines has a rating of Ba2 from Moodys and the anticipated upgrade will put Philippines

sovereign rating one notch below investment grade. Fitch upgraded Philippines to BB+ in June 2011, citing

countrys strong external position, macroeconomic stability and efforts by the government to reduce the fiscal

deficit. And for the most part, markets are indeed treating Philippines like an investment-grade economy, with the

cost of issuance comparable to those with a superior rating. Essentially, rating agencies are lagging behind market

expectations, which begs the question, do ratings really matter? Yes, ratings do matter, because an upgrade to

investment grade will open up the Philippines markets to a wider universe of international investors, including

large pension and endowment funds. The big plus would be inclusion in benchmark indexes such as the BarclaysCapital Aggregate Bond Index, since it would increase the demand for the sovereign debt from many institutional

investors who use the same.

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Figure 20: Interest Payments Consumed One-Third of Total Payments in the Mid-2000s

Source: Haver, RGE

Years of corruption, political uncertainty and poor fiscal management had impacted the Philippines rating. In the

early-to-mid-2000s, the Philippines was constantly under review and even downgraded due to large government

and external debt that made the country particularly vulnerable to external shocks, undermining the governments

efforts at fiscal consolidation. High debt levels in 2004-05 (70% of GDP) meant that interest payments were taking

up one-third of total expenditure, leaving very little for public investment. During that time, Philippines depended

greatly on external borrowing to meet its budgetary needs. As a result, the countrys fiscal performance had a

direct impact on its foreign debt position. Further, following the 1997 Asian Crisis, the Philippines was unable to

attract sufficient foreign equity investments, unlike its regional peers, and hence continued to rely on foreign debtto fund the public sector and the balance of payments.

The Philippines has made significant progress since the mid-2000s on addressing impediments to a sovereign

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Figure 21: Peso Continues to Remain the Strongest Performer in the Region Against USD (Jan 2012=100)

Source: Bloomberg, RGE

Meanwhile, despite the ongoing global financial turmoil threatening the EZ and the U.S., the Philippines has

managed to avoid a liquidity squeeze. In terms of financial soundness, capital adequacy ratios for universal and

commercial banks remain at 16.3%, well above the BSP's minimum ratio of 10% and the Basel Accords standard

ratio of 8%. There remains a good availability of peso credit, thanks to the banking sector having a very low loan-

to-deposit ratio.

Figure 22: Gross Fixed Capital as Percent of GDP

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back the shovel-ready date. The Philippines has the room to ramp up its investment, especially as it is competing

with the likes of Indonesia to secure an investment-grade rating in the near future. Even now, Philippines

investment-to-GDP is a meager 19%, compared to Indonesias 32%, when they started at the same level in 2003.For all the discussion on improved revenue collection, Philippines tax-to-GDP ratio continues to be unimpressive

at 12%. This is one of the reasons the country has failed to invest in basic infrastructure and other services.

Figure 23: Real Growth Comparison (%)

Source: Haver

While the Philippines debt-to-GDP ratio has improved, it is still significantly above Indonesias 25%. On the macro

side, though the Philippines is enjoying a period of low inflationcurrently under 3%its growth continues to trailIndonesias robust expansion. While Indonesia grew at a promising 6.5% in 2011, the Philippines grew 3.9% as

exports dwindled in the face of the EZ crisis. Over 2005-11, Indonesias growth averaged nearly 6%, compared to

the Philippines 4.7%. The reason for the Philippines poor performance is largely an overdependence on exports,

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APPENDIX: Key Vulnerability Indicators

Source: Moodys, IMF, RGE

1) Measures vulnerability to foreign capital flight ("external drain")

2) Measures extent to which domestic banking system liabilities are backed by reserves and thus vulnerability to

domestic capital flight ("internal drain")

3) Total Foreign Currency Deposits in the Domestic Banking System/(Official Foreign Exchange Reserves + Foreign

Assets of Domestic Banks)

4) India's Fiscal Deficit/GDP includes Central and State government

5) Liabilities to BIS Banks Falling Due Within One Year/Total Assets Held in BIS Banks

End-2011 India Indonesia Philippines M alaysia Thai land Brazi l Russia China

Nominal GDP (USD bn) 1676 846 213 279 346 2493 1850 7298

Nominal GDP Per Capita (USD) 1389 3509 2223 9700 5394 12789 12993 5414

Gross Public Debt/GDP (Moody's) 41.5 24.3 50.9 53.5 29.0 54.2 9.6 30.7

Gross Public Debt/GDP (IMF) 68.1 25.0 40.5 52.6 41.7 66.2 9.6 25.8

Gross External Debt/GDP 19.0 26.5 34.7 30.2 30.7 18.1 29.5 9.6

Short-term External Debt/Total External Debt 18.8 16.9 15.8 40.4 45.9 9.9 13.3 72.1

Short-term External De bt/GDP 3.6 4.5 5.5 12.2 14.1 1.8 3.9 6.9

Short-term External Debt/Official FX Reserves1 23.1 35.6 15.5 25.4 27.8 13.0 16.5 15.9

M2/Official FX Reserves2 5.4 3.0 1.6 2.9 2.4 4.7 1.7 4.1

"Dollarization" Vulnerability Indicator3 4.8 32.2 28.2 - 2.5 0 35.3 -

Net Foreign Direct Investment/GDP 0.2 1.2 0.6 -1.5 -0.3 3.1 -0.8 2.4

Fiscal Deficit/GDP4 -9.0 -1.1 -2.0 -4.8 -1.5 -3.5 1.6 -1.3

Primary Deficit/GDP -8.7 0.1 0.8 -2.9 0.6 3.2 1.9 -0.3

Public Debt/Public Revenues 372.3 151.1 364.3 246 160.8 150.2 25 135.8

General gov't int payment (% of gov't revenue) 21.7 7.8 20.5 9.6 8.0 18.6 0.9 4.2

Current Account Balance/GDP -3.9 0.2 0.2 11.5 3.4 -2.1 5.3 2.8

Liquidity Ratio relative to BIS banks 5 416.9 297.8 59.0 95.6 52.8 127.4 53.2 135.6

Exchange Rate Regime F lo at in g Floa ting Floa ting Floating F loating Floating ManagedCrawling

Peg

Financial Openness -1.15 1.13 -1.15 -1.15 -1.15 0.15 0.42 -1.15

Stock Variables

Flow Variables

Other Relevant Factors
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