The most anticipated credit rating upgrade for the Philippines has been finalized. Although it is expected because the Philippines has already received an investment grade rating from Fitch last March and it was followed with another from Standard & Poor’s later in May. And so last Thursday (3 October 2013) the last major debt-watcher, Moody’s, granted and raised the Philippines’ investment grade status to a Baa3 rating with a positive credit outlook.
Although the “Baa3” rating is the lowest in the investment grade ratings, yet it is well enough to place the Philippines’ economic performance on par with Turkey and Spain. And it is also considered a critical milestone in lifting the country’s economic status from one of Asia’s weaker economies which was once even considered “the sick man of Asia”. And the economic growth of 6.8 percent last year and 7.6 percent in the first half of 2013 are among the highest in Asia-Pacific and remained one of Asia’s best performers.
According to Moody’s, “The Philippines’ economic performance has entered a structural shift to higher growth, accompanied by low inflation.”
With three investment rating upgrades in succession, it only means one thing to the Philippines, a good image with a brighter outlook to the eyes of the investors. And with the badge of credit worthiness, it also reflects the confidence of the international community with regards to the strength of the Philippine economy. Many believe that there might be another upgrade in the coming years before 2016, the time when the current President steps down. And so what’s this latest credit rating upgrade means to the Philippines?
An improving credibility to the international community.
Image from Rappler.com