By Katherine K. Chan, Reporter
MOODY’S RATINGS on Monday affirmed the Philippines’ investment grade credit rating with a “stable” outlook on expectations that the country’s fiscal position will stabilize as the economy gradually recovers and the government continues its fiscal consolidation efforts.
In a statement, Moody’s Ratings said it kept its “Baa2” local and foreign currency issuer and senior unsecured ratings for the Philippines, as well as its “stable” outlook.
A stable outlook means the debt watcher’s rating for the Philippines will likely remain unchanged over the next 12 to 18 months.
“The ratings affirmation reflects our expectation that stabilization in the Philippines’ fiscal metrics over the next two years will be supported by a gradual recovery in economic growth from the current cyclical slowdown and the government’s continued commitment to fiscal consolidation,” Moody’s Ratings said.
It added that the country’s access to local and global financing markets as well as its ample international reserves could cushion it against volatility in global capital flows.
These buffers, Moody’s said, will temper the impact of weakening debt affordability, institutional weakness, low-income levels, and the country’s vulnerability to physical climate risks.
Moody’s Ratings maintained its “stable” outlook on the Philippines, citing the country’s medium-term growth potential and strong credit fundamentals even as it may struggle to regain confidence.
“These strengths are balanced against the risk that a more persistent slowdown or pre-election spending pressures weigh on fiscal consolidation, or that reform momentum and confidence recover more slowly amid political noise ahead of the 2028 election, or that debt affordability continues to deteriorate beyond our baseline expectations,” it said.
The Philippines has held a “Baa2” credit rating and “stable” outlook from Moody’s for over a decade or since December 2014, when the debt watcher upgraded the country’s “Baa3” rating with a “positive” outlook.
