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Marcos admin welcomes steady ratings from Moody’s

September 20, 2022 - Tuesday 6:09 PM by GDM

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The Marcos administration welcomed Moody’s Investors Service’s rating decision on Thursday, which reaffirmed the Philippines’ investment grade.

Moody’s kept the country’s Baa2 credit rating with a “stable” outlook, citing the resilience of the country’s economic recovery to external pressures and the government’s commitment to policy continuity.

In a statement, Finance Secretary Benjamin Diokno, head of the government’s economic team, said the Marcos administration “will continue to exercise fiscal prudence to ensure sufficient funding for our programs while meeting our financial obligations.”

Moody’s rating action was driven by the view that the challenging global credit conditions will not derail the country's continued recovery from the COVID-19 pandemic.

In Moody's view, the rebound in the country’s economic activity since mid-2021 has been strong and will be resilient to the current challenges posed by the turn in global credit conditions over the near-term.

The Philippine economy is likewise not significantly exposed to Russia. The country is less dependent on external demand as compared to Asia-Pacific peers given its relatively large domestic market, which in turn is further supported by stable remittance inflows from overseas Filipinos.

Moody’s also said that the government’s commitment to policy reforms helps assure gradual fiscal repair, following a reversal of the strengthening of the government's fiscal and debt metrics resulting from the pandemic.

Moody’s cited the Marcos administration’s introduction of a Medium-Term Fiscal Framework as an assurance of gradual fiscal consolidation and debt stabilization.

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