Moody’s keeps PH investment grade rating
Debt-watcher Moody's Investors Service affirmed the Philippine government’s investment grade credit rating owing to the country’s strong economic growth and improving fiscal position.
In a statement, Moody’s said late Friday that the Philippines' long-term local currency and foreign currency issuer as well as senior unsecured debt ratings were maintained at “Baa2” with its outlook at “stable.”
“The Baa2 rating incorporates a number of very positive credit features, including the high economic strength derived from a large and fast-growing economy, as well as improving fiscal strength based on
moderate government debt levels and gains in debt affordability,” Moody’s said.
“These are balanced against more negative features which constrain the rating, principally low per capita incomes and, relatedly, still low revenueraising capacity as compared to similarly rated peer countries,” the rating agency added.
For the stable outlook, Moody’s said it balances positive and negative factors.
Moody's said it expects that the country’s growth will remain robust and that the Philippines' fiscal metrics will strengthen somewhat as the government continues to make progress on its socioeconomic reform agenda.
Meanwhile, Moody’s noted that policymakers face challenges in managing the current inflationary pressures, which already surpassed government’s target range.
“In addition, domestic political developments and prospective changes to governance frameworks,
including a shift to a federal form of government, present downside risks to the country's institutional and fiscal profile,” it said.
Moody's has also affirmed the government's foreign currency senior unsecured shelf rating at (P)Baa2 and the senior unsecured ratings for the liabilities of the Bangko Sentral ng Pilipinas (BSP) at Baa2.
“In Moody's view, the credit quality of the central bank is closely aligned with that of the government,” the agency explained.
Last Wednesday, Fitch Ratings also kept the Philippines’ a notch above the minimum investment grade status on the back of the country’s robust economic growth, government’s comfortable debt level, and policies supporting macroeconomic stability.