While the rest of the world is being battered by economic storms, the Philippines is in a position to stand strong in the coming months, Fitch Ratings said.
“[The] picture for emerging markets is not uniformly gloomy and some countries, including India, Philippines and Vietnam, are less exposed to the current conjunction of risks,” said Andrew Colquhoun, Fitch’s head for Asia-Pacific sovereigns.
Global markets are under assault on several fronts.
In Asia, the continent’s main economic driver China is facing a government-induced slowdown in growth.
On the other hand, Europe’s economy continues to move at a sluggish pace. In the United States, monetary authorities are expected to announce by December their first rate hike in nearly a decade, forcing other countries to take a step back in the meantime.
Fitch Ratings this week cut its global growth forecast for 2015 to 2.3 percent, the weakest since 2009, in large part driven by pressures on emerging markets, namely the recession in Brazil and Russia, and the ongoing structural adjustment in China.
Growth in the major advanced economies is projected to pick up toward 2016, but with downside risk coming from volatilities in emerging markets.
Fitch’s outlook mirrors recent assessments on the resilience of the Philippine economy, which government officials said would grow by at least 6 percent in 2015.
Fitch’s statement also follows the firm’s recent revision of its outlook for the Philippines to “positive” from “stable,” signaling an intent to upgrade in the next year and a half.
Fitch rates the Philippines at one notch above “junk” status, which is also one notch behind the ratings of Moody’s Investor Service and Standard & Poor’s (S&P).
In a separate report this week, S&P ranked 22 emerging markets in terms of their ability to absorb economic shocks from overseas, and found the Philippines anchored well.
S&P cited the country’s healthy level of reserves, low inflation rate, fast growth relative to neighbors in the region, and reliance on domestic factors for economic activity.