The Philippines is not expected to face a financial crisis in the next few years, but possible interest rate shocks and climate change risks could pose a big threat to the country’s financial stability.
Japan-based investment firm Nomura counts the Philippines as among the economies not at risk of a financial meltdown over the next 12 quarters based on its recently released “Cassandra” report.
Designed as an “early warning model” for financial crises, Nomura’s Cassandra report — named after a priestess of Apollo in Greek mythology who foresaw the destruction of the city of Troy — tracked 40 economies, with a score that exceeds 100 interpreted as a warning that the country is vulnerable to a financial crisis.
The report gave the Philippines a Cassandra score of zero.
The Nomura report said, “Cassandra correctly signaled two-thirds of the past 53 crises in our sample of 40 countries since the early 1990s.”