'Sick Man of Asia' Must Stick With the Treatment

Now that the Philippines is cleaning up its act and open for business, a critical question must be asked: Now what?

Bravo to Fitch Ratings for being the first to validate Philippine President Benigno Aquino's drive to cure the long-time "Sick Man of Asia." Standard & Poor's and Moody's Investors Service are sure to do the same this year, bestowing on the country the investment-grade rating it deserves.

Yet now that the Philippines is cleaning up its act and open for business, a critical question must be asked: Now what? Where does Aquino go from here?

Asia's 13th-biggest economy has a unique ability to disappoint optimists. Every five years or so, markets get all excited about change in the Philippines only to regret it. That makes it a fool's errand to predict turning points in this most erratic of Asian economies. Halfway through his six-year term, though, Aquino has raised taxes, arrested his predecessor on corruption charges, ousted the country's top judge for illegally concealing his wealth, addressed chronic tax evasion and acted to reverse the overpopulation that perpetuates poverty.

The economy also has been served well by its internationally respected economic policy chiefs: Finance Secretary Cesar Purisima and central-bank Governor Amando Tetangco. The wave of capital zooming Manila's way these days has created control problems, ones Tetangco has handled with agility and innovative policy making.

The trouble is, Aquino can't run for re-election in 2016. What if his successor has very different ideas about reform? What if a candidate looking to undue Aquino's good-governance campaign rides a wave of popular support into office and makes Fitch regret Wednesday's decision?

The key is avoiding complacency and institutionalizing the upgrades of the last few years. That means strengthening the nation's judiciary, a more powerful and independent anti-corruption agency and freer watchdog groups to police the government. It's also about articulating how a more efficient economy will spread the benefits of growth in a nation in which a fifth of its 106 million people live in slum conditions.

It's great that credit raters are finally rewarding the Philippines for its hard work. Yet what really matters is how Aquino cements the remedies that are reviving a long-ailing nation. The Philippines must stick with the treatment.

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