MANILA, Philippines — The Philippine economy is somehow insulated from “spillovers” from slower global trade volumes partly triggered by tensions between the United States and China, Moody’s Investors Service said.
In a research note dated March 19, the global debt watcher said the Philippines’ exports to China was at 11.7 percent of the Southeast Asian nation’s gross domestic product, lower than those of other Asian economies.
Meanwhile, Hong Kong, Mongolia, Singapore, Vietnam and Taiwan could face largest deceleration in economic growth as these economies have high trade exposure to China.
Thailand, Vietnam, Taiwan and Malaysia could potentially see some gains should trade and investment divert away from China, as these countries already produce similar products that are sourced from Beijing, Moody’s said.
“The slowdown in Asian exports has been broad-based, reflecting weakening global output and, in particular China, given its role as a source of final demand and in the region's supply chain,” Moody’s said.
“These trade-driven economies are key nodes in the manufacture of intermediate products, especially for electronics, which are particularly exposed to tensions between the US and China,” it added.
“Given the uncertain outlook for growth and trade policy, as well as generally tighter financing conditions, slower investment growth will amplify the trade slowdown.”
China is counting on its millions of consumers and renewed investment to stabilize the economy as slowing global growth and a trade war with the US hit its export machine.
The US and China have exchanged tariffs on more than $360 billion in two-way trade, and China's exports and imports plummeted much more than expected in February.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will return to Beijing next week as the United States and China inch toward resolving their trade war, a senior administration official told AFP on Tuesday.
The renewed shuttle diplomacy is a sign of progress in the talks after several weeks in which momentum toward a resolution appeared to have slowed. — Ian Nicolas Cigaral with AFP