S&P GLOBAL RATINGS trimmed its growth outlook for the Philippines this year, even as it expects the economy to be one of the “least affected” by the coronavirus disease 2019 (COVID-19) outbreak in the Asia-Pacific region.

In a note sent to reporters on Wednesday, S&P said it lowered its gross domestic product (GDP) growth outlook for the Philippines to 6.1% in 2020, from the already downgraded 6.2%. The global ratings agency maintained its Philippine growth forecast at 6.4% for 2022.

This comes after Moody’s Investors’ Service on Tuesday reduced its GDP growth forecast for the Philippines to 6.1% from the 6.2% it gave last year.

While S&P and Moody’s forecasts are above the 5.9% growth recorded last year, these are still lower than the government’s downgraded target of 6.5-7.5%.

S&P said the Philippines is expected to be one of the economies “less affected” by the COVID-19 outbreak, along with Japan, Indonesia and Malaysia.

It noted that the Philippines’ tourism-related exports make up 3% of GDP, and less than a fifth of visitors are from China. Chinese travelers accounted for 1.74 million out of the 8.26 million international tourist arrivals to the Philippines in 2019, tourism department data showed.

“Most uncertain is the impact on supply chains. The Philippines is both upstream and downstream from China with processed intermediate trade with the country accounting for about 15% of overall trade. This is dominated by electronics components which may experience region-wide disruptions,” S&P said.

The Department of Finance on Wednesday released data showing the volume of containers coming into the Philippines from mainland China plunged 62.15% year on year in the first half of February.

Data showed the total number of containers coming from China dropped to 29,195 in the first 18 days of February from 77,878 during the same comparable period in 2019.

The decline is all the more apparent after January saw an 8.24% year-on-year increase in the volume of containers to 66,828.

Finance Secretary Carlos G. Dominguez III on Tuesday said: “We’re concerned, but we believe that the slack will be taken up in other markets.”

S&P lowered its growth forecast for the Asia-Pacific region by 0.5 percentage point (ppt) to 4.3%, “which assumes China’s economy will expand at a coronavirus-dented 5% in 2020.”

“We expect significant growth drags of 1 ppt or more in Hong Kong and Singapore, given their close linkages with, and heavy reliance on mainland China. Australia, Korea, Taiwan, Thailand, and Vietnam will also suffer,” the debt watcher said.

“At this point, we anticipate a recovery will take a firm hold in the third quarter but risks are tilted to the downside. We expect more policy easing in the most affected economies, especially rate cuts,” it added. — LWTN with Beatrice M. Laforga