Moody’s sees no imminent Phl rating downgrade

Moody’s Ratings is unlikely to downgrade the Philippines’ credit rating in the near-term despite emerging risks from the Middle East war considering the country’s strong external position and reserves buffer, its analysts said.

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However, Young Kim, associate vice-president and analyst at Moody's Sovereign and Sub-Sovereign Risk Group, said a prolonged conflict in the Middle East could imperil the Philippines’ credit rating amid potential inflation acceleration, a wider current account deficit and a slowdown in remittance flows.

“So, in our view, at least on the baseline, we don’t see (an) imminent rating action downgrade or negative type of action on the Philippines, per se,” he said in a virtual media briefing on Tuesday. “But that really depends on, again, the severity and duration of the conflict, as well as some of the government's responses to the crisis.”