PhilRatings sees capital market growth with Moody's partnership

Philippine Rating Services Corporation (PhilRatings) is expecting accelerated growth and deeper development for the domestic capital market following Moody’s acquisition of a 19.99% stake in the local credit rating agency.

In a chance interview, PhilRatings president Angelica Victoria Viloria said that the strategic partnership aims to enhance credit rating infrastructure and discipline in the Philippines, leveraging both Moody’s global expertise and PhilRatings’ decades of local market leadership.

"We’ve been operating in the Philippines for 41 years as a credit rating agency. Our goal is to grow the capital markets and to provide rating services that make things more transparent and to provide investor protection," Viloria said at the sidelines of the ceremonial partnership signing between PhilRatings and Moody’s in Taguig City on Wednesday.

Early this month, the US Embassy in the Philippines announced that the Moody’s is acquiring a minority stake in PhilRatings —making it the first global credit rating agency to invest in a Philippine credit rating agency.

Moody’s, for its part, said the move is part of efforts to expand its Asia-Pacific network of domestic rating agency affiliates.

While the domestic financial sector has expanded over the decades, Viloria, meanwhile, pointed out that the Philippine capital market still lags behind regional and international peers.

"If you compare the Philippines with other jurisdictions or other countries, our capital markets are more limited compared to them in terms of instruments that are available, [and] in terms of the range of ratings that are offered to investors," she said.

To bridge the gap, Viloria said the alliance combines Moody’s extensive international reach with PhilRatings’ deep-rooted understanding of the local economic landscape.

"It’s really a thrust to enhance and grow the credit rating infrastructure and discipline and exposure in the country, which eventually translates to capital markets development and growth of the economy," she added.

In a separate news release, Moody’s said Philippine businesses could gain greater access to competitive financing following its strategic partnership with PhilRatings.

The global credit watchdog said its partnership with PhilRatings is also expected to contribute to the development of the local currency corporate bond market, providing Philippine businesses with additional financing options beyond traditional bank lending.

It said that greater access to long-term funding could benefit companies undertaking capital-intensive projects in transportation, renewable energy, telecommunications, logistics, and manufacturing.

A more developed domestic bond market could help businesses secure financing on competitive terms, subject to market conditions and their credit profiles, according to Moody’s. —AOL, GMA News