THE PHILIPPINES should fare better than most of its peers in the Association of Southeast Asian Nations (ASEAN) in case of a Chinese economic downturn, given relatively low volume of Philippine exports to the East Asian giant,
Moody’s Investors Service said in a newsletter Wednesday.
“On aggregate, ASEAN member countries exported 12.2% of their total outbound shipments to China in 2013, up from just 7.3% a decade earlier,” Moody’s said in the July 2 issue of its quarterly “Inside ASEAN” newsletter. “As a result, China is now ASEAN’s largest trading partner...”
Moody’s said ASEAN now faces risks tied to a drop in China demand, which is “expected to soften as the mainland economy undergoes a process of rebalancing”.
“Philippines is the most insulated. Headline data suggest the Philippines would be the least impacted by a significant downturn in Chinese demand,” it said.
It noted value of Singapore exports to China in 2013 was equivalent to 16.4% of the city-state’s gross domestic product versus a 7.9% regional average. Malaysia, Vietnam and Thailand follow with 9.8%, 9.0% and 6.9% respectively, while Indonesia and the Philippines each was below 3%.
“The Philippines would feel some positive spillover impact from weakening Chinese demand, as lower commodity prices would serve to keep a lid on consumer prices despite the strength in domestic consumption.”
Raymond Luther B. Aquino
Business & Investment Opportunities
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