The Philippines’ credit profile is among the most susceptible to climate change risks, Moody’s Investors Service said.
In an assessment released on Tuesday, Moody’s said that a common characteristic among the most susceptible sovereigns was their economic reliance on an agricultural sector that is typically not irrigated but rain-fed.
Of the 36 sovereigns whose credit quality were tagged as most susceptible to climate change, 17 are in Africa and 12 in the Asia Pacific.
“The list of sovereign credits identified as most susceptible to physical climate change risks remains substantially the same as in November 2016,” the ratings agency said.
For the Philippines, however, Moody’s said that the “update of the data underpinning our assessment shows that the Philippines’ credit quality has become relatively more susceptible to climate change”.
“While according to the ND-GAIN indices, many sovereigns have improved their capacity to face climate change and/or reduced their sensitivity, the Philippines’ capacity and sensitivity have not changed,” it added.
ND-GAIN stands for the Notre Dame Global Adaptation Initiative that measures a country’s vulnerability to climate change and also its readiness to improve resilience.
“The Philippines’ heavy reliance on agriculture (31 percent of employment) and high exposure to climate-related disasters (on average 19 events per year over the last decade) imply that it was already among a group of sovereigns that we assessed as vulnerable to climate change – but it is now among the most vulnerable,” Moody’s said.
Latest Philippines Statistics Authority data show that workers in the agriculture sector comprised the second largest worker group in the country, accounting for 26.0 percent of the total employed as of January 2018.
Moody’s has assigned a ‘Baa2’ investment grade rating with a stable outlook to the Philippines.