“The macroeconomic fundamentals have remained generally sound,” Amando Tetangco Jr, the central bank governor, told fDi. “The improvements, particularly on the fiscal side, are intact. What we need to do is build on our recent economic gains by sustaining our economic reform efforts.”

The government announced in May that, on the back of a series of reforms, the 2005 budget deficit was estimated at 151.25bn pesos ($2.7bn), 16% below the official target for the year. The reforms are mainly concerned with raising the government’s tax take, through more and higher taxes, and improved collection.

Although agriculture is still one of the most important parts of the economy, together with light industry and tourism, it is the eight million overseas Filipino workers, a weighty 10% of the population, that are the country’s best asset.

At times of unrest, their contribution is even more important. With their steadily growing remittances from all over the world – officially $8.54bn in 2004, unofficially $14bn, according to the Asian Development Bank – they are mainly responsible for the consumer demand underpinning growth.

Meanwhile, the phenomenal growth of call centres and outsourcing in the country, with revenues of $850m last year, is providing job opportunities for educated workers that allow them to stay in the Philippines.

Consumer demand is not enough, however. Investment is also necessary. Political upheaval will slow the flow of FDI from new sources, but probably not as much as newspaper headlines might imply because traditional investors – mainly from the US, Japan and China – are accustomed to it.

With unemployment at 11.8% and 40% of the population living on less than $1 a day, according to the World Bank, Ms Macapagal-Arroyo is intent on creating jobs for the less-skilled as well as educated Filipinos. “I want to create six to 10 million jobs in the next six years so we can wipe out unemployment. How do we do this? By investment. Of course, we need the infrastructure and the business climate to bring investors in,” she said recently in an exclusive interview.

Corruption also needs to be tackled since, according to monitor Transparency International, the Philippines is still one of the most corrupt countries in the world.

But achieving this change is going to take some time. “The Philippines is trying [to turn the corner]. Everyone has that intention. It is just that in our culture things are pretty slow,” said Tessie Sy, heir-apparent to the SM Prime Group – the leading retail group in the Philippines – and chairman of Banco de Oro.

Political upheaval, part of the soap opera that is Philippine governance, will slow things down. But reform, however slow, is still an accomplishment. The hope is that it will not stall completely.

Karina Robinson