The Philippines’ credit rating will not be directly affected by the maritime dispute with economic powerhouse China, Fitch Ratings said Thursday.
Fitch said the South China Sea dispute, along with the East China Sea row between Japan and China, the cross-strait relations between Taiwan and the mainland and North Korea-related issues were causing geopolitical tensions in the region.
“Maritime disputes in the South China Sea underscore the growing importance of geopolitics in shaping the international policy agenda of countries in the Asia Pacific. Fitch Ratings believes shifts in the regional and global balance of power mean geopolitical risks will remain prevalent in the long term,” Fitch said.
“These risks have the potential to cause significant economic and political instability, though are not currently a direct ratings driver for sovereigns in the region,” it said.
The International Tribunal on the Laws of the Sea based in The Netherlands ruled against China in a bitter row over territorial claims in the South China Sea or West Philippine Sea. The court concluded there was no legal basis for China to claim historic rights within the sea areas falling within the so-called “nine-dash line.”
The Philippines enjoys an investment grade score from Fitch Ratings, with a stable outlook.