PHL banks stand out for having positive outlook — Moody's
The credit outlook for the
Asia Pacific region remains stable despite perceived global economic slowdown
and volatility in financial markets, with Philippine banks standing out as
exceptional, debt-watcher Moody's Investors Service said
Thursday.
“Looking ahead, sovereign ratings in the region are likely to withstand the effects of the moderation in global demand and the volatility in global capital markets,” Moody's said in its special report, “Asia-Pacific 2013 Sovereign Mid-Year Update: Broad Regional Stability Amid Continuing External Volatility.”
Specifically, outlooks for banking systems are stable in nine out of 15 rated systems in the Asia-Pacific.
The Philippines, however, is “unique among Moody's system globally” for having a positive outlook, which means that the system can be upgraded.
Hong Kong, Mongolia, and Singapore have been revised to negative this year.
“Although we do not expect banking system stress to materially affect sovereign creditworthiness in these countries, there continue to be important channels of transmission,” Moody's said.
Moody's sees governments “running relatively tight fiscal policies, or continuing with gradual fiscal consolidation.”
Last year, Moody’s upgraded the issue ratings for the Bangko Sentral ng Pilipinas' debts to Ba1 or one notch below investment grade from Ba2 with a stable outlook.
It also upgraded the foreign and local currency long-term bond ratings of the Philippines to Ba1 from Ba2 with a stable outlook.
Moody's cited as one of the reasons for the stable financial system is that it posed limited contingent risks and provided a stable source of financing for the government.
A higher credit rating allows banks and governments to borrow for less.
The debt watcher noted that the region's debt as a percentage of its output is expected move up only slightly, averaging 49 percent for the 2011 to 2014 period from 47 percent in the pre-2008 financial crisis.
“Overall, Indonesia and the Philippines have featured the biggest improvements in terms of their percentile ranking,” Moody’s said.
“High economic growth, narrow fiscal deficits, and exchange rate appreciation have combined to lead to debt consolidation in both countries and have contributed to the upward trajectory in their ratings,” it added. — SOA/BM, GMA News
“Looking ahead, sovereign ratings in the region are likely to withstand the effects of the moderation in global demand and the volatility in global capital markets,” Moody's said in its special report, “Asia-Pacific 2013 Sovereign Mid-Year Update: Broad Regional Stability Amid Continuing External Volatility.”
Specifically, outlooks for banking systems are stable in nine out of 15 rated systems in the Asia-Pacific.
The Philippines, however, is “unique among Moody's system globally” for having a positive outlook, which means that the system can be upgraded.
Hong Kong, Mongolia, and Singapore have been revised to negative this year.
“Although we do not expect banking system stress to materially affect sovereign creditworthiness in these countries, there continue to be important channels of transmission,” Moody's said.
Moody's sees governments “running relatively tight fiscal policies, or continuing with gradual fiscal consolidation.”
Last year, Moody’s upgraded the issue ratings for the Bangko Sentral ng Pilipinas' debts to Ba1 or one notch below investment grade from Ba2 with a stable outlook.
It also upgraded the foreign and local currency long-term bond ratings of the Philippines to Ba1 from Ba2 with a stable outlook.
Moody's cited as one of the reasons for the stable financial system is that it posed limited contingent risks and provided a stable source of financing for the government.
A higher credit rating allows banks and governments to borrow for less.
The debt watcher noted that the region's debt as a percentage of its output is expected move up only slightly, averaging 49 percent for the 2011 to 2014 period from 47 percent in the pre-2008 financial crisis.
“Overall, Indonesia and the Philippines have featured the biggest improvements in terms of their percentile ranking,” Moody’s said.
“High economic growth, narrow fiscal deficits, and exchange rate appreciation have combined to lead to debt consolidation in both countries and have contributed to the upward trajectory in their ratings,” it added. — SOA/BM, GMA News
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