The central bank is hoping the Philippines wins another credit-rating upgrade from Moody’s Investor Service within the year in recognition of the country’s sustainable economic growth during the last seven quarters.
This followed the disappointment from Fitch Ratings’ decision to merely affirm its investment-grade rating for Philippine long-term sovereign debt paper.
“We’ve had 60 consecutive quarters of positive growth. In the last six quarters, we’ve had growth at close to 7 percent,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said. “What other proof do you need?”
Moody’s was the last major credit-rating firm to declare the Philippine s “investment grade,” which officially is an indication of the government’s capability to pay its loans. This also serves as a barometer for the health of the Philippine economy.
Despite being behind the curve in upgrading the Philippines, Moody’s is currently the only rating firm that has a “positive outlook” for the country. This indicates a possible upgrade in the next 12 to 18 months.
Fitch and Standard & Poor’s currently have “stable” outlooks for the Philippines, indicating that their ratings would stay the same for the next year and a half.
All three rating firms gave investment grade ratings for the Philippines last year. In 2013, the Philippine economy grew by 7.2 percent—the second fastest in Asia next to China. It was also better than 2012’s expansion of 6.8 percent.
Moody’s officials were in town earlier this month ahead of its official assessment on the Philippines later this year.
Guinigundo noted that Fitch, along with other rating firms, might be acting overly cautious in giving out higher ratings. He said most rating firms were “burned” during the 2008 crisis. “They were certifying bonds that turned out to be useless and jurisdictions that were weak,” he told reporters.
The Philippines, for its part, was kept two notches below investment grade for many years, despite the steady implementation of significant reforms that have contributed to the country’s good standing today.
“Four years ago, we forced the issue on them,” Guinigundo said, citing that economic managers have been consistent in pointing out discrepancies between methodologies used by major rating firms and the actual grades the country got.