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FT Confidential Research

Philippines risks return to bad old days of spending sprees

Duterte's populist programs threaten hard-won credit ratings

Workers balance on steel beams as they work on an expressway undergoing construction in Manila, one of the Philippines government's infrastructure programs.   © Reuters

Even as the Philippine government celebrates a successful dollar bond sale, signs are emerging of a return to the bad old days when fiscal profligacy undermined the country's creditworthiness.

President Rodrigo Duterte's administration is likely to have breached its 3 percent limit on the fiscal deficit last year and is set do so again from next year until his term ends in 2022, as spending on infrastructure and social programs increases while tax revenues fall short.

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