Malaysia’s three-year government bonds headed for the worst week since July as increasing signs of a recovery in the U.S. economy added to speculation the Federal Reserve will pare its stimulus as soon as this month.
Thailand’s biggest bout of political unrest under the current government has increased economic risks, threatening to crimp a rebound from recession as protests damp local consumption and investment while weakening the currency.
Malaysian Prime Minister Najib Razak took steps for a shift toward fiscal prudence, scrapping sugar subsidies and unveiling plans for a consumption tax in 2015 while softening the impact with handouts to the poor.
The Philippine central bank will keep the option of another cut in the rate it pays for funds in so-called special deposit accounts, Governor Amando Tetangco said three weeks before the next policy meeting. The peso fell.
Thailand’s decision to expand subsidies for rice and rubber farmers to quell protests is undermining efforts to control rising debt, even as governments in neighboring Malaysia and Indonesia cut back support programs.
The Philippines won a rating upgrade from Moody’s Investors Service, completing the nation’s ascent to investment rank as President Benigno Aquino leads a growth resurgence that’s outpacing the rest of Southeast Asia.