As developed countries in the west are inundated with credit rating downgrades, the Philippines seems to face a rosier future as it inches closer towards investment grade status. One of the influential international debt watcher, Moody’s Investor Service, on May 29 revised its rating outlook for the Philippines to “positive” from “stable,” citing continued improvement in the country’s fiscal position. This revised outlook means the formal credit ratings upgrade is likely soon. Moody’s rates the Philippines’ foreign and local currency bonds two notches below investment grade, the same as Standard & Poor’s rating. Another ratings agency, Fitch Ratings, rates the Philippines one notch below investment grade. A better rating would translate to lower borrowings costs for the Philippines as investors are less likely to command high interest rates on debts to compensate for the risk of default.
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