Moody’s Investors Service Changes RP Credit Rating Outlook to Stable
Read in the newspapers today that Moody’s Investors Service, one of the leading global credit rating agencies (together with Standard & Poor’s), has changed its outlook for the credit rating of the Philippines from negative to stable. An outlook is an indicator used by rating agencies and this signifies the direction that a particular credit rating may take in the future. Any credit rating can be upgraded, downgraded, or maintained, at any time, depending on prevailing circumstances and future expectations. Thus, an outlook can be positive, negative, or stable.
Cited as reasons for the credit rating outlook change were the improvement in government revenues and the lower dependence on foreign debt. Moody’s is the last global credit rating agency to change its outlook from negative to stable. The other three are: Fitch Ratings, Standard & Poor’s, and Japan Credit Rating Agency.
Based on news reports (the Philippine Star, November 3, 2006 issue), the current ratings of the Philippines from Moody’s are as follows:
B1: long-term government foreign and local currency ratings
B1: foreign currency bank deposit ceiling
Ba3: foreign currency country ceiling
November 6th, 2006 at 3:15 am
Hi Angelica -
Does improved credit ratings mean a stronger peso? I was at the money exchange today to send some money to the wife (it’s that time of the month when her memory improves while I suffer a bout of amnesia!) and I heard my fellow OFWs grumbling that their dinars aren’t worth that much any longer with the peso hovering just below the P50/- per dollar rate. Whatever benefits this improved rate brings, I hope it trickles down to the poorest of the poor in our country and not just bloat the already-bulging pockets of the Taipans and Ayalas.
Regards,
Al
November 6th, 2006 at 1:54 pm
Hi Al,
This may be a chicken and egg question. Now that I think about it, it’s not too clear which comes about as a result of which. An improved credit rating or an improved credit rating outlook may make investors more confident in the Philippines, so more investments may come in. More dollars flowing in increases the supply of dollars and when there is more supply, the value of course, goes down. Then again, I read in some articles that one of the reasons for the improvement in outlook was the strengthening of the peso. You are right though. Improved credit ratings or credit rating outlooks don’t mean much — unless people feel it personally. Here’s to that day.
September 26th, 2007 at 9:32 pm
Aalt…
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From Angel: Thank you for dropping by this site. Glad to be of help.