The sovereign credit watcher Moody’s Investors Service has rated the government’s upcoming global bond offerings a moderate risk and assigned it a Baa2 rating, its ninth highest grade.
The rating applies on all 5-, 10- and 25-year global bonds the Philippines seeks to sell in the global debt market to boost its meagre budget as well as finance its climate-related projects and programs.
Under the Moody’s system of ratings, the Baa2 is just a notch lower than a Baa1-rated sovereign bond and considered one with a moderate level of risk.
As a medium grade sovereign IOU, Baa2-rated bonds possess certain speculative characteristics. Moody’s assigned this rating on the sovereign on December 11, 2014 some 14 months after having earlier rated its IOUs as a Baa3.
“The Philippines’ Baa2 issuer rating has been characterized in recent years by strong economic performance, a strengthening fiscal position and limited vulnerability to external shocks, although the global coronavirus pandemic has disrupted and partially reversed these trends.
“Structural credit challenges include low per capita income and some constraints to the quality of institutions, which stand in contrast to strong policy effectiveness,” Moody’s said in explaining the rating.