THE PHILIPPINES is among economies in Asia least vulnerable to global shocks, Moody’s Investors Service said in a report, with “low” exposure seen despite a slide in the country’s external payments position.

In a Feb. 8 report, the debt watcher tagged the Philippines as one of the Asian economies with the least exposure to global financial hiccups, noting that the country had “minimal vulnerability” and “considerable flexibility” in terms of trade and external debt.

The Philippines is better situated than many of its neighbors, Moody’s noted — even if the country’s current account surplus likely slipped to 0.7% of gross domestic product (GDP) last year — since a manageable foreign debt burden and ample foreign currency reserves supported its economy.

The current account, which measures money flows in terms of goods and services between the country and foreign markets, is expected to remain in surplus but narrower at 0.8% of GDP — coming from 2015’s 2.6% — reflecting further increase in imports that outstrips export gains.

Moody’s expects the Philippines to be among the hardest-hit nations should “protectionist” US President Donald J. Trump clamp down on outsourced services.

In its report, Moody’s gave the Philippines the lowest score of 25.2% in its external vulnerability scorecard, besting seven other Asian nations.

China came second at 30.6%, followed by South Korea with 41.5% and Thailand at 44.5%.

Malaysia is seen to have “moderate” vulnerability, with a rating of 146.1%.

Moody’s drew up the scores by dividing individual economies’ short-term external debt, currently maturing long-term debt, and non-resident deposits in a year over the total foreign exchange reserves held by their respective central banks.

Philippine gross international reserves totalled $81.044 billion in January, enough to cover 9.2 months’ worth of import payments and 5.8 times of short-term foreign debt.

Asian economies are generally insulated from external shocks, Moody’s said, noting: “Asian governments will benefit from relatively low external vulnerability and the ability of policy makers to introduce countercyclical measures.”

“Widespread current account surpluses among Asian economies point to high domestic savings to finance investment and which provide a buffer against external shocks,” the Moody’s report read.

“Relatively few countries in Asia have external debt greater than 50% of GDP, although debt and external vulnerability metrics have been increasing for many countries.”

However, the Philippines was tagged with “moderate” exposure in terms of foreign currency debt equivalent to 36.3% of total state borrowings, higher than single-digit levels posted by Korea, Thailand, and Malaysia. On the other hand, Vietnam and Indonesia had “elevated” vulnerability from offshore debt, with the levels hitting 42.3% and 42.5% respectively.

Economic managers have actively limited the country’s dependence on foreign borrowings, keeping the financing mix at 80%-20% in favor of domestic sources.

Despite this, the Philippines is perceived as having ample policy space to address heightened tumults in the global market, given relatively low inflation, a general government debt that is equivalent to barely 40% of GDP, as well as a highly liquid banking system with a low loans-to-deposits ratio, Moody’s said.

The Philippine banking sector also remains one of only two in Asia that are rated “stable” overall — alongside India — an outlier when compared to a trend of “deterioration” observed for neighboring economies, the debt watcher added. — Melissa Luz T. Lopez