According to debt monitor Moody’s Investors Service, the Asia-Pacific region, including the Philippines, would undoubtedly feel the effect of rising tensions and Russia’s threat of invading Ukraine via global price shocks and trade disruption (Feb. 23).

Moody’s managing director Michael Taylor said in a statement that the Asia-Pacific economies they monitor had “little direct exposure to Russian or Ukrainian firms, and as such we do not foresee any immediate or direct ratings effect from the crisis in Ukraine.“

The area, however, “may not be immune to second-round impacts of a war,” according to Moody’s.

Commodity pricing, trade repercussions, and financial market disruption are all plausible transmission pathways, according to Moody’s. Domestic creditors, for example, have been seeking higher returns on short-dated Treasury bills over the last two weeks, making it more costly for the government to borrow via the local debt securities market. While the globe watched events on the Ukrainian-Russian border, global oil prices rose as well.

“The worldwide price of oil and liquefied natural gas (LNG) is expected to increase rapidly in the event of a war, which will be favorable for the Asia-Pacific region’s few exporters but bad for the much larger number of net energy importers,” Moody’s stated. The Philippines is a net importer of crude oil.