if you want to get away with drilling without chipping, place masking tape over the area to be cut out, draw on the size of hole, and in your case use a 5mm drill bit in the centre of the area. then take a piece of what ever sanding paper you use( I use the yellow and green stuff from builders merchants sold on a roll at 40, 60 and 100 grade) and roll it very tightly around a piece of metal rod of about 1.8 mm dia until you have a round tube about 4 inches long and just diameter enough to go through the drill hole. then file out to your heart's content, getting a very smooth and none chipped edge to the whole recess.
lot cheeper than knackering your needle files with a grp compound that is basically what it is.... glass, and very hard in constituency.