The interim government's budget cuts, which include slashing spending on economic development, have helped shrink the economy. The devaluation of the rupee failed to spark an expected boost in exports, though it has slowed imports.
Runaway inflation remains a headache.
On a positive note, private sector services such as tourism and banking are expected to grow. Infrastructure construction and property development should remain strong, and manufacturing is expected to be robust. Deregulation could energize the finance, telecommunications, transportation and insurance industries. Exports are expected to grow as should investment into the nation. 1997 may be remembered as the year the Philippines economy became truly integrated with the rest of the world's.