MANILA -The Philippines is likely to be “less affected” by China’s economic slowdown, Finance Secretary Benjamin Diokno said, adding that any negative impact on the country’s exports would be partially cushioned by strong domestic demand.
Diokno made the statement during the Asean Roundtable organized by the International Monetary Fund (IMF) on Oct 11 in Marrakech, Morocco.
Government data showed the Philippines’ merchandise exports to China amounted to $10.97 billion in 2022, accounting for 13.9 percent of the country’s total export sales last year. The United States was the top destination of locally-made goods in 2022 with a 15.8 percent share.
Philippine Exporters Federation (Philexport) president Sergio Ortiz-Luis Jr. last month said Filipino exporters are expecting a slowdown in sales growth this year due to supply-chain problems caused by geopolitical uncertainty.
China’s growth is slowing down as the world’s second-largest economy tackles property market woes caused by a debt-fueled expansion. At the same time, Chinese exporters have been hurt by softening demand from foreign markets that are battling surging inflation.
According to Diokno, financial systems in the Asean+3 region could be exposed to risk arising from China’s property sector, although “significant direct or second-order spillovers” are not expected.
While the Philippines is less dependent on trade for growth, Nicholas Mapa, senior economist at ING Bank in Manila, said a sluggish Chinese economy could hit the Philippines on the tourism front.
“The tourism sector was a major recipient of receipts from visitors from China. Despite this, we are aware of the headwinds faced by the domestic economy that could force growth to slow this year and next,” Mapa said.