MANILA— If more COVID-19 lockdowns in the Philippines lead to delays in economic recovery then Moody's Investor Service will be prompted to have a "relook" at its rating level, its official said Friday.
The coronavirus pandemic and other preventive measures are "preeminent downside risks," Senior Vice President for Sovereign Risk Group of Moody’s Investors Service Christian De Guzman told ANC.
"If these lockdowns do lead to a delayed recovery, that is also going to impact the fiscal situation... And then we’re going to have to relook at our assumptions on whether or not this remains intact for its rating level," De Guzman said.
De Guzman made the statement before the government announced that Metro Manila would be under another hard lockdown from Aug. 6 to Aug. 20.
Based on the latest government estimates, the Philippine economy could lose some P105 billion every week if Metro Manila is under hard lockdown.
In 2020, Moody's kept the Philippines Baa2 rating with a stable rating or one notch above minimum investment grade.
Fitch Ratings also earlier affirmed the country's BBB rating but the outlook was revised to negative from stable, which means the credit rating may be lowered in the medium term or 1-2 years.
Before the imposition of the 3rd lockdown in Metro Manila and Fitch's outlook downgrade, Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said the country could hold on to its credit ratings due to its strong macroeconomic fundamentals.
The Philippine economy contracted by 9.6 percent in 2020, its worst since the end of World War 2.