Philippines expects 3rd major credit rating upgrade

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philippine pesoUS-based rating agency Moody’s indicated it may upgrade its credit rating for the Philippines soon, after it has put the current Ba1 rating (highest junk status) “on review for upgrade,” the debt watcher announced on July 25.

Two other major credit rating agencies, Standard and Poor’s and Fitch, have already upgraded Philippine government securities to investment-grade earlier this year, and also the Japan Credit Rating Agency.

In a statement, Moody’s said that the Philippine economic performance has “exceeded expectations” against the backdrop of still-fragile global external demand. Inflation remained “manageable” with “no strong signs overheating” being seen.

The Philippine economy will grow “significantly faster than similarly rated peers over at least the next 2 to 3 years,” the statement said. Moody’s also said an upgrade could come “if there is evidence” that the government’s debt burden will decrease and that investment spending will increase.

Eventually, Moody’s could upgrade the Philippines to Baa3, an investment grade after its metrics.

The Philippine’s GDP per capita has improved to $4,412 in 2012, from just about $2,500 in 2011. The improvement could be traced from a “robust” economic growth of 6.8 per cent in 2012, among the highest in emerging markets, due to strong consumption and local investments.

Meanwhile, the Philippine monetary authorities decided to keep key rates unchanged on July 25 amid signs that inflation would remain under control. The overnight borrowing rate remained at 3.50 per cent, an all-time low.

 

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Reading Time: 1 minute

US-based rating agency Moody’s indicated it may upgrade its credit rating for the Philippines soon, after it has put the current Ba1 rating (highest junk status) “on review for upgrade,” the debt watcher announced on July 25.

Reading Time: 1 minute

philippine pesoUS-based rating agency Moody’s indicated it may upgrade its credit rating for the Philippines soon, after it has put the current Ba1 rating (highest junk status) “on review for upgrade,” the debt watcher announced on July 25.

Two other major credit rating agencies, Standard and Poor’s and Fitch, have already upgraded Philippine government securities to investment-grade earlier this year, and also the Japan Credit Rating Agency.

In a statement, Moody’s said that the Philippine economic performance has “exceeded expectations” against the backdrop of still-fragile global external demand. Inflation remained “manageable” with “no strong signs overheating” being seen.

The Philippine economy will grow “significantly faster than similarly rated peers over at least the next 2 to 3 years,” the statement said. Moody’s also said an upgrade could come “if there is evidence” that the government’s debt burden will decrease and that investment spending will increase.

Eventually, Moody’s could upgrade the Philippines to Baa3, an investment grade after its metrics.

The Philippine’s GDP per capita has improved to $4,412 in 2012, from just about $2,500 in 2011. The improvement could be traced from a “robust” economic growth of 6.8 per cent in 2012, among the highest in emerging markets, due to strong consumption and local investments.

Meanwhile, the Philippine monetary authorities decided to keep key rates unchanged on July 25 amid signs that inflation would remain under control. The overnight borrowing rate remained at 3.50 per cent, an all-time low.

 

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