Moody's reviewing Philippines' ratings for upgrade

Moody's Investors Service said Thursday that it is undertaking a review of the Philippine government's ratings for possible upgrade of investment grade after the country hit a 7.8 percent economic growth during the first quarter of this year. Aside from the recent track record of robust economic growth, Moody's said that the other key drivers for its decision to upgrade the Philippine ratings include the stable and favorable government funding conditions, improving fiscal and debt dynamics, and political stability and a strengthened government policy mandate. "The review will focus on the sustainability of the above factors and the relative strength of underlying credit metrics compared to investment-grade peers in the Baa rating range," it said. Since its last rating action on Oct. 29, 2012, Moody's said the Philippines' economic performance has exceeded its expectations; supporting the view that the economy will grow significantly faster than similarly rated peers over at least the next two to three years. The rating agency said the factors that could lead to ratings upgrade of the Philippines include confirmation that reduction in the government debt burden will continue and that funding conditions will remain favorable; and indications that the acceleration of investment spending will continue, helping to keep the economy on a path of stronger growth. "These developments should also be accompanied by an assessment that the health of the country's balance of payments and stability of the financial system can be sustained," Moody's said.