CEBU, Philippines – Aside from gaming and mining sectors, all other industries in the Philippines are seen to remain unaffected by the slowdown of the Chinese economy, which is expected to linger in the next couple of years.
Market analyst April Lynn Tan said the crisis in China should not be a cause of concern, as there is a very small possibility that the economic crunch would spill over to the rest of the world, including the Philippines, similar to that of the 2007 financial turmoil.
"This is because unlike the U.S. in 2007, China today is not dependent on foreign borrowings. The Chinese government also has a very strong balance sheet allowing it to absorb potential losses from loan defaults if required," said Tan.
Tan, who is also the vice president and head of research of the online investment powerhouse COL Financial, said that Philippines' mining industry, as well as gaming sector are the only possible casualties of the China's downturn.
China's consumption of mining products coming from the Philippines may shrink, likewise the entry of Chinese gamers to the country.
She said the Philippines’ strong economic foundation afforded the country to withstand any external intervention, and the crisis in China should not alarm investors, and the market.
The resilient consumer spending growth buoyed by the country's attractive demographics, strong inflow of overseas remittances and the growing BPO sector; rising investment spending; and strong finances of the government, are just few of the strong foundations why the Philippines is seen to head a promising economic pathway.
According to research firm IDEAglobal, China is mulling a 15-20 percent devaluation of its currency by the end of 2016 in a move that could spark a crisis in Asian markets.
China, the world's second-largest economy after the U.S., devalued its currency last month in a bid to help exporters. The country is grappling with a softening economy and wild swings in the stock market.
The yuan was trading at about 6.3708 per dollar on Wednesday, having weakened to four year-low around 6.45 after last month's surprise devaluation.