MOODY’S Investors Service announced late Tuesday that they assigned a Baa2 senior unsecured rating to the US dollar-denominated global bond offering by the government of the Philippines.
The 10-year dollar-bond issuance was launched on Monday.
Moody’s said their rating of the bonds mirrors their Philippines’s issuer rating of Baa2 with a stable outlook.
“The Philippines’s relatively large economy and high growth potential supports its capacity to absorb shocks. The country’s favorable demographics support steadily rising labor inputs and potential growth, while keeping the burden of aging-related costs on government finances low,” Moody’s said.
“In addition, the long average residual maturity of the Philippines’s government debt, at around 12 years for its external obligations and 7.3 years for its domestic issuances, limits recurrent borrowing needs and strengthens the stability of the overall cost of debt,” it added.
The ratings agency further discussed that large foreign exchange reserves and low economy-wide external debt contribute to macroeconomic stability of the country and that its still low reliance on either foreign sources of income or financing insulates the Philippines from the direct impact of abrupt changes in the global macroeconomic and financial environment.
Another international rating firm, Fitch Ratings, also said their assessment on the bonds is dependent on their overall view of the economy.
Fitch has assigned the Philippines’s US dollar-denominated bond an expected rating of “BBB.”
“The expected rating is in line with the Philippines’s Long-Term Foreign-Currency Issuer Default Rating [IDR] of BBB with a Stable Outlook,” Fitch said.
“The rating would be sensitive to any changes in the Philippines’s Long-Term Foreign-Currency IDR,” it added.