THE PHILIPPINES is among the countries that are most exposed to spillover effects from economic shocks and volatility in developed markets, the ASEAN+3 Macroeconomic Research Office (AMRO) said.
Increased interconnectedness among ASEAN+3 financial institutions, markets and economies highlights the potential for contagion as the region remains susceptible to shocks from global factors and developed economies, AMRO said in its ASEAN+3 Financial Stability Report 2024 released on Thursday.
“Global factors have significant spillover effects on ASEAN+3 financial systems. Japan and Korea, and the regional financial centers (Hong Kong and Singapore), Malaysia and the Philippines are most exposed to global factors such as the VIX (CBOE Volatility Index), macroeconomic risk, commodity prices, and the US dollar exchange rate,” it said.
“The financial markets of developed economies (North America, the UK, and Europe) have strong contagion effects on ASEAN+3, as indicated by the percentage of variation in ASEAN+3 stock market returns attributable to shocks in the stock market returns of these developed economies. All ASEAN+3 economies have significant links to financial systems in developed economies, with equity returns in Hong Kong, Japan, Korea, Malaysia, the Philippines, and Singapore being particularly sensitive to shocks from developed markets.”
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