By Bianca Cuaresma
While other emerging markets around the world weigh heavy on global growth outlook due to increased volatility, the Philippines—along with two other emerging markets—continued to buck the trend, and remained strong due to the economy’s intrinsic assets.
In a special report on the global economic-growth outlook, Fitch Ratings said emerging markets are becoming an increasing source of risk for the global economy, as the collapse in commodity prices and political shocks puts more pressure on the slowdown.
But cited as outliers of this trend, however, were the Philippines, India and Vietnam.
“Growth in the major advanced economies is projected to pick up into 2016, but with downside risk from any rebound from the weakness in emerging markets. However, the picture for emerging markets is not uniformly gloomy and some countries, including India, the Philippines and Vietnam, are less exposed to the current conjunction of risks,” Fitch Head of Asia-Pacific Sovereigns Andrew Colquhoun said.
Fitch further noted that the vulnerabilities seen in emerging markets, especially those in the region, have been traced to their close trade ties with China—a connection the Philippines is adjudged not so reliant on.
At the recent Philippine economic briefing, Economic Planning Secretary Aresnio M. Balisacan explained in one of his presentations that the country’s growth relies mainly on consumption and that this effectively shields the $285-billion economy from the slowed down Chinese economic engine.
Government officials and economic experts also earlier said government spending, should it accelerate as programmed, could add further stimulus to the growth of the Philippine economy.
This was the also growth scenario drawn of India’s, as that government’s increase in capital expenditure was seen pushing that sub-continent’s resiliency as one of three emerging markets seen shielded against growth risks in their group.
Overall, Fitch scaled back its forecast growth of the global economy to 2.3 percent. This was its weakest and least optimistic forecast since 2009.
The significantly weaker global growth outlook was driven largely by pressure on emerging markets, such as Brazil and Russia, which are economies in recession.