We find that local bond yields and CDS spreads have broadly widened across the region since the end of February, though the magnitude of moves varies by country. Thailand and the Philippines have been the most affected, with the Philippines exhibiting the highest net oil import sensitivity — estimated at roughly 3.5–4% of GDP — and the largest CDS widening since February. India’s CDS spreads have also moved materially. Malaysia, by contrast, has proved the most resilient: as the region's only net energy exporter, it has seen CDS spreads edge tighter and local yields hold relatively stable. Indonesia occupies a more complex position — a net energy exporter that has nonetheless experienced significant local yield widening, partly reflecting its negative credit outlook and elevated fiscal strain.
Policy responses to the energy disruption have diverged. Malaysia and Indonesia have relied principally on fuel subsidy extensions while India and the Philippines have favoured excise tax relief and emergency distributions.
We conclude our analysis by applying AFII’s Co₂liseum transition analytics to the five sovereigns,identifying a noteworthy variation between climate transition scores and near-term market pricing. India, Thailand, and Malaysia are trading broadly in line with their Co₂liseum scores, suggesting transition risk is reasonably well-integrated into current spread levels. Indonesia and the Philippines, however, are temporarily trading against their scores. We interpret this divergence as a reminder of climate scoring’s longer-term horizon: climate metrics are structural signals, meaning acute commodity shocks can displace them temporarily.
