Moody’s sees stable credit outlook for Asia Pacific; PHL to be insulated from projected China slowdown

By Joann Santiago

MANILA, July 22 (PNA) – - Moody’s Investors Service sees the Philippines being insulated in the possible cooling of the Chinese economy.

The Philippines, which is among the few economies in the Asia Pacific that the credit rating agency gives a “positive” outlook on its investment grade rating, which is currently at Baa3, is projected to be shielded from a slowdown of China.

The debt watcher said investors has been monitoring developments in China vis-à-vis the deceleration of domestic growth as its officials slowly cut the country’s dependence on public-backed and credit-fuelled investment.

It forecasts a soft-landing for China with the 2014 and 2015 growth placed between 6.5 percent and 7.5 percent for the said years.

Faster downturn may negatively impact export-dependent countries like Australia and Indonesia, it said.

”In contrast, among ASEAN countries, the Philippines could be the best insulated against a further slowing in Chinese growth given its reliance on domestic demand, services exports, and overseas workers’ remittances,” it said.

However, the debt watcher cut its growth forecast for the Philippines this year to six percent and 6.3 percent.

These are lower than the 6.5 percent and 6.4 percent projection for the two-year period that the debt watcher came out last April.

Meanwhile, the credit rating agency sees a stable credit outlook for the Asia Pacific Region as a whole despite a projected slower growth for the world’s second largest economy, rising interest rates, and lower domestic expansion in advanced economies. (PNA)