Vietnam was able to get a fairly low cost last year because of the scarcity of the paper. On the other hand, a frequent issuer like the Philippines won't be able to enjoy the same borrowing costs even though they have the same ratings. |
We have yet to see how the law is going to be implemented, how much revenues would it generate and how these additional collections would be spent. |
What is important is the process of charter change itself as well as the outcome, whether it will materialize or not, does not affect this policy making economic reforms, especially fiscal consolidation. |
What we would look for is a gradual phasing out of the fuel subsidy and a more effective and coordinated policy response from the government and monetary authorities as and when shocks arise. Shocks such as high oil prices, a classic case of external shock, caught the government by surprise. |