Peso up on Moody's affirmation of Philippine ‘Baa2’ credit rating

The Philippine peso appreciated against the dollar on Friday as global credit watcher Moody's Investors Service affirmed the Philippines' “Baa2” credit rating with a stable outlook.

The local currency gained 9.5 centavos to close at P49.44:$1 from Thursday's finish at P49.535.

"The peso exchange rate closed stronger vs. the US dollar today after the latest affirmation on the Philippine credit ratings by Moody’s Investors Service at 'Baa2,' or one notch above the minimum investment grade, another sign of resilience on the country’s economic and credit fundamentals, including fiscal performance, as some other countries worldwide were downgraded due to COVID-19 pandemic/lockdowns," Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

Moody's Investors Service, on Thursday, kept the Philippines' long-term local and foreign currency issuer and senior unsecured debt ratings at Baa2, one notch above the minimum investment grade.

"The rating affirmation and stable outlook reflect Moody's view that the fortification of the government's fiscal position in recent years provides a buffer against a rise in public indebtedness due to shocks such as the ongoing global coronavirus outbreak," it said.

Under Moody's Long-Term Rating definitions, Baa obligations are subject to moderate credit risk, and are considered medium-grade and as such may possess speculative characteristics. — DVM, GMA News