MANILA - The weak peso is a "credit risk" for the Philippines as a large share of the country's debt is foreign currency-denominated, Moody's Investors Service said Monday.

The peso continues to weaken as the dollar strengthens and oil prices rise, said Anushka Shah, vice president and senior analyst at Moody's.

The peso has been trading near 12-year lows this month and closed at 52.49 to the dollar on Monday.

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The Philippines and Indonesia which have seen the biggest depreciation in their currencies in Southeast Asia, are in a similar situation as both have large shares of foreign currency borrowings at 37 to 40 percent of total debt, Shah said.

"Currency depreciation will be bloating their debt servicing needs and diminishing their debt affordability, which is ratio of interest payments to revenue," Shah said in an interview with ANC's Market Edge.

The peso is second only to India's rupee as the worst performer among emerging market currencies, Shah said.

Despite this, Moody's is keeping its stable outlook on the country, she said.