“Philippines is the most insulated. Headline data suggest the Philippines would be the least impacted by a significant downturn in Chinese demand,” Moody’s Investors Service said in a newsletter Wednesday entitled Inside ASEAN.
“Exports to China have actually diminished in terms of economic significance over the past decade. Instead, the Philippines’s growth story has been underpinned by robust domestic demand, which has in turn been fueled by structural reform and an upswing in the country’s credit cycle,” Moody’s said.
“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,” it added.
“Looking ahead, Chinese demand is expected to soften as the mainland economy undergoes a process of rebalancing – characterized by economic restructuring, policy reform, market liberalization, and slower credit uptake – and the risk that this process could prove disorderly is rising,” Moody’s explained.