Debt watcher Moody’s Investor Service has cut the peso credit score for Philippine Long Distance Telephone Co. (PLDT) by a notch in a move to more closely align the company’s grade with the country’s own sovereign debt rating.
But the ratings agency said the downgrade did not mean PLDT’s financial strength had withered, despite posting lower profits and an accelerated spending program. Moody’s said PLDT remained unchallenged in the country’s lucrative telco sector.
At Baa3, PLDT’s rating remains at investment grade and is two notches above the Philippines’ Ba2 status. The company also remains the country’s best rated corporation.
“PLDT’s credit quality remains well balanced despite a sizeable recent acquisition and an accelerated capex program,” Moody’s said. “We continue to take into account PLDT’s strong fundamental credit quality, evidenced by its manageable leverage and excellent liquidity.”
However, Moody’s said that since the phone company’s revenue came mainly from its domestic operations—with the contribution of international sales being almost negligible—PLDT’s fate was still tied with that of the domestic economy. Paolo G. Montecillo