Hurrah! Another Investment Grade for Philippines!

Philippines recently achieved an Investment Grade from Moodys Investor Service. 

It is the last of the Big Three credit rating agencies to rate Philippines as Investment Grade.

Moody's rating on Philippine Government is Baa3 with a positive outlook.

Please take a look on the Ratings table below. The first Rating in order to become an investment grade is Baa3 and we achieved that recently. 

Before this investment grade, we were lounging in the Speculative Grade for the longest time. 

In fact, since Moody's started covering Philippine Government credit, we never obtained an investment grade status.

For two decades, Philippine Government credit was judged to have speculative elements and a significant credit risk.

Until recently.

Our country made great strides in improving the fundamentals of our economy. .

According to Moody's, the factors on the upgrade of rating were:

      1. Sustainability of the country's  robust economic performance

      2. Sustainability of the country's  ongoing fiscal and debt consolidation

       3.Sustainability of the country's political stability and improved governance.

Additionally, the stability of the Philippines' funding conditions during the recent bout of market volatility in emerging markets points to the country's relative lack of vulnerability to external financial shocks.

Yes. We finally "arrived".

It was a long time coming. But it's all worth it.

Savor and take the opportunity of these investment grades. 

Borrowing costs getting cheaper. 

Interest rates at their historical low. 

Benign inflation. 

Favorable demographic conditions.

High growth GDP.

Peso at its sweet spot.

Kay sarap maging Pilipino! 

INVESTMENT GRADE
Rating	Long Term Ratings	Short Term Ratings
Aaa	Rated as the highest quality and lowest credit risk.	Prime-1 superior ability to repay short-term debt obligations.
Aa1	Rated as high quality and very low credit risk.
Aa2
Aa3
A1	Rated as upper-medium grade and low credit risk.
A2
A3		Prime-1/Prime-2 superior ability or strong ability to repay short-term debt obligations.
Baa1	Rated as medium grade, with some speculative elements and moderate credit risk.	Prime-2 strong ability to repay short-term debt obligations.
Baa2		Prime-2/Prime-3 strong ability or acceptable ability to repay short-term debt obligations.
Baa3		Prime-3 acceptable ability to repay short-term obligations.
SPECULATIVE GRADE
Rating	Long Term Ratings	Short Term Ratings
Ba1	Judged to have speculative elements and a significant credit risk.	Not Prime Do not fall within any of the prime categories
Ba2
Ba3
B1	Judged as being speculative and a high credit risk.
B2
B3
Caa1	Rated as poor quality and very high credit risk.
Caa2
Caa3
Ca	Judged to be highly speculative and with likelihood of being near or in default, but some possibility of recovering principal and interest.
C	Rated as the lowest quality, usually in default and low likelihood of recovering principal or interest.

Source: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004

https://www.moodys.com/research/Moodys-upgrades-Philippines-to-Baa3-revises-outlook-to-positive--PR_283602