Moody's: Philippine sovereign rating upgraded to Ba2

BI / financial
15/6/2011
Irvin Avriano A.
Bisnis Indonesia

Moody's: Philippine sovereign rating upgraded to Ba2

JAKARTA: Moody's Investors Service raised their ratings on foreign and local denominated Philippine government bonds level from Ba3 to Ba2. The rating outlook is stable.

"[One of] the key drivers for the decision are the progress made in fiscal consolidation by the new Aquino administration," said Moody's Assistant Vice President-Analyst, Christian de Guzman, in his ratings research this morning.

He considered other factors are the sustained nature of macroeconomic stability, coupled with continued strength in the external payments position, against a background of a significant pick-up in the momentum for economic growth.

Long-term rating of foreign-currency bonds ceiling for the one of ASEAN country is also upgraded by Moody's to Baa3 from Ba1 level, and the deposit foreign currency ceiling long term rating were also upgraded from Ba3 to Ba2.

The Philippines' short-term foreign currency bond ceiling was raised to P-3, while the short-term foreign currency deposit ceiling remains at "Not Prime." The outlook for these ceilings is stable.

These ceilings act as a cap on ratings that can be assigned to the foreign currency obligations of other entities domiciled in the country. In addition, the local currency bond and deposit ceilings were unified at A2.

Related to the bond rating and the rating limit actions, the Philippine central bank (the Bangkok Sentral ng Pilipinas/BSP) rating has also been improved from Ba3 to Ba2 with stable outlook.