PH balances sound fundamentals with challenges and risks: Moody's


Posted at Sep 15 2017 02:05 PM

MANILA - Moody's Investors Service said Friday that the Philippines' credit profile balances sound fundamentals against structural challenges to competitiveness and rising political risks. 

The debt watcher said in its just released annual credit analysis of the Philippines that it expects sustained robust growth over the next few years on the back of the government's ambitious infrastructure development. 

It also said buoyant private sector investment and recovery in external demand would contribute to growth averaging 6.5 percent this year and 6.8 percent next year.

Moody's explained that the stable outlook on the Philippines' Baa2 rating indicates a balance of upside and downside risks. 

"On the upside, strong GDP growth could accelerate even further, especially if the government achieves higher investment spending," it said. 

"On the downside, capacity constraints are emerging and could prove more stringent than we currently envisage, giving rise to inflationary pressure." 

Other risks include the possible worsening of the Islamist insurgency in Mindanao that could lead to an expansion of martial law, might undermine both foreign and domestic business confidence, and disrupt economic activity in other parts of the country.