Moody’s lauded PH economy as more stable than neighbors’ – gov’t

MANILA — The Philippines’ stable macroeconomic profile would enable the country to withstand external shocks better than most of its neighbors could, debt watcher Moody’s Investors Service said.

In a statement Sunday, the government’s Investor Relations Office (IRO) cited a recent Moody’s report which assessed the Philippines’ macroeconomic profile as “Moderate+,” better than the assessment of “Moderate” for China, India, Indonesia and Thailand, as well as Vietnam’s “Weak-.”

Moody’s assessed countries’ macroeconomic profiles ranging from “Very Weak-” to “Very Strong+.”

“When assessing a sovereign’s macroeconomic profile, Moody’s takes into account a host of factors, including economic strength, institutional strength, susceptibility to event risks, and credit conditions,” the IRO noted.

The IRO quoted Moody’s as attributing its relatively favorable assessment of the country’s macroeconomic profile to “robust economic growth, comfortable external liquidity, and improved institutional strength.” The last five years saw the Philippine economy expand at its fastest pace since the late 1970s.

In its March 18 banking report, Moody’s noted that the Philippines “remains among the fastest growing major economies in the Asia-Pacific region.”

The debt watcher also said it expected the country’s gross domestic product or GDP to expand by 6 percent in 2016 to outpace the 5.8-percent growth posted in 2015.

Also, “the country’s institutional strength has also improved, driven in part by an increasingly credible track record of policy effectiveness by a number of national agencies, especially the central bank,” Moody’s said.

“The country’s strong growth results from the continued strength of domestic consumption – fueled by a combination of improving employment conditions at home and relatively stable overseas remittances – as well as healthy public and private-sector investments,” it added.

According to the IRO, “Moody’s mentioned the important role played by the Bangko Sentral ng Pilipinas (BSP) in helping maintain a stable macroeconomic environment.”

“External risks, including contrasting monetary policies in advanced economies and lackluster global growth, make the job of central banks tougher. Nevertheless, despite a challenging global backdrop, the Philippines has managed to keep its macroeconomic environment relatively stable over the years on the back of prudent monetary policy and sound banking supervision,” BSP Governor Amando M. Tetangco Jr. was quoted by the IRO as saying in response to Moody’s report.

“As the Philippines aims to build on its economic gains from the past half a decade, the BSP will help maintain an enabling environment by staying committed to its mandate of price and financial stability,” Tetangco said.  SFM