Growth in Southeast Asia is “credit positive” – Moody’s Investors Service

Economic growth and resilience in Southeast Asia is “credit positive” according to Moody’s Investors Service, which pointed out that some countries in the region – the Philippines, among them – continue to show growth despite the weaker showing of other economies in the region. 

Christian de Guzman, Moody’s Assistant Vice-President, said in the credit rating agency’s report, as quoted by broadsheet Business World, that the “economic resilience in these countries is credit positive because it supports government revenues and mitigates the need for stimulus spending to support growth.” 

He added that the credit rating agency expects the Philippine economy, which posted 6.4 percent growth – the fastest growth rate among ASEAN (Association of Southeast Asian Nations) members – for 2012’s first quarter, to again show healthy growth for the next quarter. 

The Moody’s Investors Service official pointed out that this accelerating growth is actually bucking the trend of lackluster growth in other parts of the region, “particularly in China and Asia’s newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.” 

Aside from the Philippines, the other countries that are also posting growth in the region include Thailand, Indonesia, and Malaysia. The Moody’s report added, “As exports have been brought down by softening prices in international markets along with weak demand from the US and Europe, developing Southeast Asia has been supported mainly by domestic economies.”

Foreign direct investments have also remained strong for the resilient economies in the region, according to Moody’s, as “stable inflation and favorable consumer sentiment have sustained private household spending” and “government revenues have remained buoyant, reflecting profitable businesses and healthy labor markets.”

The credit rating agency has already raised its outlook for the Philippines from stable to positive, making it even more likely for the country to achieve a possible upgrade in credit rating in the next 12-18 months. This upgrade would mean an alignment with the credit ratings received from Standard & Poor’s and Fitch Ratings.