MANILA, Philippines – Moody’s Investor’s Service on Thursday upgraded the Philippines’ credit rating to Baa3, becoming the last major credit rater to give the country an investment grade rating.
Moody’s cited the sustainability of the country’s robust economic performance, ongoing fiscal and debt consolidation, and political stability and improved governance as reasons for the upgrade. The rating comes with a positive outlook for the Philippines.
“In addition, the stability of the Philippines’ funding conditions- during the recent bout of market volatility in emerging markets- points to the country’s relative lack of vulnerability to external financial shocks, such as those arising from anticipated tapering by the (United States) Federal Reserve of its quantitative easing policy,” the credit rater added.
Moody’s likewise upgraded the government’s foreign currency shelf rating to (P)Baa3 and the Bangko Sentral ng Pilipinas’ liabilities have also been assigned a Baa3 rating and a positive outlook.
According to Moody’s, “obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.”
The Philippines was previously rated Ba1, the highest mark in the junk grade status.
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Fitch Ratings and Standars & Poor’s Ratings Services, two major credit raters, have already given the country an investment grade rating.
An investment grade status translates to lower debt interest payments, opening up more credit avenues and luring more foreign investments to the Philippines.