With Moody's upgrade, PHL credit rating now just one notch below investment grade

The latest credit rating upgrade the Philippines received from Moody’s Investor Service aligned the country’s long-term currency rating from the three major credit rating agencies (Moody’s , S&P, and Fitch Ratings) at one notch below investment grade, the Bangko Sentral Gov. Amando Tetangco Jr. said Monday. “This marks a milestone: It has been a decade since all three credit ratings agencies rated the Philippines one notch below investment grade status,” said Presidential Spokesperson Edwin Lacierda.

 

Moody's upgraded the foreign and local currency long-term bond ratings of the Philippines to Ba1 from Ba2, citing the country's improved economic performance and continued fiscal revenue buoyancy, Reuters reported.

 

The credit rating agency cited improved economic performance, enhanced medium term growth prospects, fiscal revenue buoyancy, and stable financial system as key factors that led to the upgrade, the central bank noted. The upgrade reflects a “sustained international confidence in the Philippines under the Aquino administration, especially striking given a weakened global economy,” Lacierda said in a statement.

 

“With the government’s concerned efforts and with the support of the private sector, the Philippines should achieve an investment grade credit rating sooner than later,” said Tetangco. 

 

The upgrade reflected the country's enhanced prospects for growth over the medium-term; and a stable financial system, Reuters said, citing Moody’s. 

 

The outlook for the latest rating is stable.

 

“We are delighted with Moody’s recognition of the Philippines’ strengthened macroeconomic fundamentals and growth prospects,” Tetangco said.

 

“Our prudent approach to external financial management has yielded a more manageable and sustainable external debt position,” the Bangko Sentral chief noted.

 

“In fact, the Philippines is one of the few sovereigns among its rating peers to be a net external creditor, with official FX reserves exceeding the country’s gross external debt,” he added. Lacierda noted Moody’s recognized Philippines’ strong macroeconomic fundamentals and government efforts to enhance its fiscal space, as it continues to strive for inclusive growth – including the historic Bangsamoro Framework Agreement, which may harness the long-untapped potential of Mindanao as well as secure equitable progress for its people.

 

This year Bangko Sentral cut policy rates by 100 basis points “to help the economy withstand ongoing global economic strains and to support economic growth.” — VS, GMA News