China’s Evergrande debt crisis to have little impact on Philippines —Citi

The debt crisis besetting Evergrande Group, China’s second largest property developer, is seen to have little impact on the Philippines, global banking giant Citi’s Markets & Securities Services said Wednesday.

Evergrande is now the world’s most indebted real estate company with a whopping figure of $305 billion, according to the World Economic Forum.

The company has warned its investors that it could default on its debts.

Fears of Evergrande defaulting rocked global markets early this week amid worries that it could impact the global economy since China is the second largest economy in the world, according to a report by Reuters. 

However, for Citi Markets & Securities Philippines head Paul Favila the impact of Evergrande’s debt crisis on the Philippines will be minimal.

“There seems to be very little impact, which again is an indication as to, you know, the correlation of the Chinese economy really to what's happening in the Philippines,” Favila said.

“Say that the Philippines has always been an internally driven economy… very much consumption driven and I think that would be more of the focus as far as the Philippine economy is concerned going forward,” he added.

Meanwhile, Evergrande said it will strike a deal with bondholders to settle interest payments on domestic bond, which soothed fears of an impending default could unleash global financial chaos, according to a report by Reuters. 

“Of course, we're always mindful of the potential impacts in the global financial markets and how that might eventually impact local markets,” Favila said.

“[B]ut for now, I think the impact would be rather limited,” he said. — BM, GMA News