Moody's Investors Service on Monday has upgraded the Philippines' foreign and local currency long-term bond ratings from Ba2 to Ba1, or one notch below investment grade.
In a statement, the credit ratings firm said the basis for the upgrade were the country's better economic performance and the continued fiscal revenue growth despite the detreriorating external demand.
The Philippines also now has "enhanced prospects" for growth over the medium-terms and a "stable" financial system, which has limited contigent risks and provides stable financing for the national government.
"Despite the headwinds from softening external demand, the Philippines has demonstrated considerable economic strength and fiscal resilience. In contrast to similarly rated countries, the country is poised to record a combination of faster growth, lower inflation, exchange rate appreciation, and an increase in foreign exchange reserves, while maintaining trend debt consolidation," Moody's said.
The agency added that even though the public-private partnership projects has not progressed, government spending on infrastructure has picked up. The uptick in spending did not make much impact on government finances since this was mitigated by the enhanced revenue administration.
In addition, remittance inflows continue to rise despite the global economic downturn, which underscores the OFW remittance role in sustaining household consumption and keeping the country's current account surplus healthy.-Interaksyon (October 29, 2012 1:24PM)
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