01/10/2013 02:58 pm ET Updated Mar 12, 2013

The Philippines in 2013: The Best Is Yet to Come?

Having lived for more than a decade in this country, I have never sniffed as much optimism in the air. Filipinos are not exactly the most pessimistic people in the world, but recent years -- especially under the administration of President Aquino -- have given them more reasons to realistically expect a better future for themselves and the succeeding generations of Filipinos.

According to a recent survey by Pulse Asia, 92 percent of the Filipinos are "hopeful" -- the operative term for optimistic expectations of greater stability and growth -- about 2013. As a largely jovial archipelago, steeped in an ancient "Malayo-Iberian" spirit of resilience and easy-going fun, the mood in this country greatly contrasts with other regions reeling from tremendous geopolitical and/or economic tremors, namely the European Union (EU) and the Middle East.

What makes "Filipino optimism" particularly startling is the fact that the tiny archipelago still faces deep economic, political and geopolitical uncertainties. For a starter, it has actually emerged as the "frontline" nation in a broader "great power rivalry" between the two Pacific protagonists/superpowers: the U.S. and China.

If anything, 2013 is set to present this country more strategic challenges, with China stepping up its territorial claims against other claimant states in adjacent waters of South and East China Seas, and the Association of Southeast Asian Nations (ASEAN) still scratching its head over a lasting, multilateral diplomatic resolution to the brewing territorial conflicts. In absence of a decisive regional response and concrete U.S.' strategic-military assistance/commitment, it is very likely that the Philippines will soon find itself at the receiving end of China's unrelenting popular nationalism, which feeds its increasingly aggressive maneuvering in the disputed waters.

According to a recent UNFAO report, the Philippines, in contrast to practically all other Asian states, has actually experienced a big spike in hunger rates in recent years, adding two more million individuals to the list of undernourished citizens.

Moreover, with the U.S.' battling a "fiscal cliff" debacle and most center-economies -- including major emerging markets -- whimpering, the highly globalized Filipino economy, which is highly dependent on remittances from its nationals spread across fragile developed economies and risky states in the Middle East, is vulnerable to external economic shocks. The overall investment picture is far from rosy, with the Philippines suffering some dramatic fall in stock markets and investment flows in the latter months of 2012, suggesting serious problems with infrastructure, regulatory framework, and bureaucratic corruption.

On the political front, the Philippines is heading into a crucial electoral cycle -- which would test the mettle of its democratic transition -- without resolving very fundamental "rule of law" issues: In many provinces, especially in the so-called election hotspots, private armies abound, while human rights violations have gone largely unresolved, despite the Aquino administration's repeated promises of reform.

But, merely looking at the gloomy collection of imponderables and challenges misses the point about the objective foundations of an astounding upswing in the country's national mood. Come to think of it, the glass is actually -- and finally -- more full than empty.

There is a reason why President Aquino stands as among the most popular democratic leaders in the world, while his counterparts in Japan, Europe, and even the U.S., face a cynical electorate, desperate for a better alternative. According to a Pulse Asia survey, Aquino currently enjoys a whopping 80 percent approval rating, particularly praised for his anti-corruption/crime efforts. This puts him at par with charismatic global leaders -- such as Brazil's "Lula" and the U.S.' Barack Obama -- at their very peak.

Aquino is now presiding over a grateful electorate, a gradually consolidating democratic system, and most importantly (perhaps!) the next "Tiger Economy" in Asia.

The Philippines is among the most dynamic economies in the world, growing by 7.1 percent in the third quarter of 2012 -- outshining all its ASEAN peers. While most of Europe is struggling to prevent a precipitous slump in credit ratings, the Philippines is set to acquire the much-vaunted "investment grade" status early this year. With the boom in the real estate and services sectors, more employment opportunities are in store for a generation of "yuppies" hungry for consumption and travels. The Philippine Peso has been at its strongest in years, while foreign reserves are at a historic high and exports still seem resilient -- signaling a healthy trade balance. With stable public debt, inflation, and interest rates, the overall macroeconomic picture is encouraging.

But of course, the bigger question is whether the growing pie of wealth is trickling down to the general -- majority poor -- population? I don't think so, at least not in the short to medium run, especially with the government's insistence on a pragmatic economic agenda, still along the business-as-usual neo-liberal assumptions: privatized services, liberal trade agreements, and minimal state-guided strategic oversight and intervention. So far, neither the poverty rates, nor the employment picture is actually showing a dramatic improvement.

However, the country is patiently laying down the foundations of a more egalitarian society, with a growing chunk of the youthful, teeming population demanding better jobs, accountability, and quality governance.

More importantly, the current momentum, which has generated greater public optimism in the ruling government -- in turn, raising the proverbial "animal spirits" in the markets -- portends greater entrepreneurial dynamism, democratic activism, and electoral competitiveness. This is why, from now on, Filipino leaders will -- under constant public gaze -- be forced to be responsive to democratic signals and the demands of the new century. This explains why Aquino was able to rally enough legislative-political support for the passage of the controversial Reproductive Health (RH) and Sin Tax bills, despite vehement opposition from entrenched elements, halfway into his term.

It might take some time before ordinary Filipinos truly enjoy the fruits of growth and landmark legislative reforms, but what the bachelor Aquino shows is that the Philippines (at its current stage of take-off) needs a soft, pragmatic and calculating leader -- definitely more than the "strongmen" (and their beautiful first ladies), which ruled much of the third world in the 20th century.