by: Sarah Joson
Tuesday, April 21, 2015 |
A study done by Standard Chartered Bank confirms that the Philippines will remain resilient against external shocks as it encompasses solid and buoyant economic fundamentals. The financial institution pointed out that most of the challenges did not affect the country’s market or economic variables. The bank also said the stable environment of the local economy has been driving the Philippine fundamentals and market metrics in recent years and external shocks would weaken but not critically damage domestic fundamentals.
It was also revealed that in Asia, the Philippines is one of the countries with the lowest external debt to GDP levels. It is currently at 17 percent or 0.6 times foreign exchange reserves and only eight percent of foreign obligations mature in a year.
Moreover, the report noted that the country’s current account surpluses since 2003 have cushioned balance of payments vulnerabilities. Even the strong business process outsourcing industry and steady inflow of remittances from overseas Filipino workers have supported services exports and boosted income receipts.
The bank shared a breakdown for the two segments, stating that the BPO industry exported $15.6 billion of services accounting for 5.5 percent of GDP, and received $20.4 billion in remittances last year. The country’s foreign reserves are likewise said to be sufficient.
It also highlighted that major credit rating agencies have been observing the resilience of the country. Moody’s, S&P, and Fitch recently gave the country a sovereign investment grade.
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