The weak global development keeps on stressing economies around the world. In any case, while others are feared to enroll a log jam, with some even anticipated to have negative development, a few others remained a great spot.
“Less concerned about the Philippines,” based on a research by HSBC.
“We are less concerned about the Philippines than we were, given the relative immunity from a slowdown in China,” it said.
The Philippines has been affected by weak global growth as seen in its first half output for 2015.
Growth, as measured by gross domestic product (GDP), as of end-June this year stood at 5.3 percent, weaker than year-ago’s six percent.
The deceleration was attributed to the impact of weaker net export and lower-than-programmed government spending.
In the first six months of 2015, the Philippines came in third after China and Vietnam in terms of domestic output but analysts remain optimistic on the domestic economy.
Amidst this development, the research note said the country “is one of the few EM (emerging market) countries relatively unexposed to a slowdown in Chinese growth and lower commodity prices.”
“Trade in goods (and especially commodities) plays a small part in exports and so the same risks to growth do not exists,” it pointed out.
The HSBC report said this was proven in part by the continued resiliency of the Philippine peso, which the central bank said remained in the middle of the range in the region in terms of depreciation and volatility.
It said that “while more relevant for the emerging world, if we see a weaker currency and widening spreads, this implies capital outflows and likely lower potential growth in the near term.”
“Brazil, Russia, Colombia and Malaysia look most vulnerable here, whilst India and the Philippines look better,” it said.
HSBC, however, noted that “the run-ups in asset prices that we had seen have cooled, and so our concerns have abated.”
And while capital flows to EMs continue to exit, HSBC said it sees investments to the Philippines, just like in Nigeria, Spain, UK and Sweden, rising.
Relatively, the report said more EMs are focused on improving education to help boost productivity.
