Moody’s ups Philippine banks

Moody's Investors Service said it upgraded the long-term and short-term deposit ratings of Philippine National Bank and Rizal Commercial Banking Corp. to Baa3/P-3 from Ba2/NP.

The Baa2/P-2 long-term and short-term deposit ratings of Land Bank of the Philippines was affirmed.

In addition, Moody's upgraded the baseline credit assessment (BCA) and adjusted BCA of Philippine National and Rizal to ba1 from ba3 respectively. Land Bank’s BCA was upgraded to ba2 from ba3.

Moody's upgraded Rizal’s senior unsecured debt, senior unsecured euro medium-term note program, noncumulative preferred stock and other short-term ratings to Baa3, provisional Baa3, B1(hyb) and provisional P-3 from Ba2, provisional Ba2, B3(hyb) and provisional NP, respectively.

These actions follows the conclusion of the review initiated on March 17 that was prompted by changes arising from the implementation of Moody's new methodology for rating banks globally.

In the case of Rizal, Moody’s said the action also concludes the review initiated on Dec. 18 that was prompted by the company's announcement on Dec. 17 that it entered into a definitive agreement with Cathay Life Insurance Co., Ltd (Baa2 positive), whereby Cathay Life will acquire an estimated 20% stake in Rizal.

The upgrade of the long-term and short-term ratings of Philippine National and Rizal reflects the consistent improvement in the credit profiles of these banks, backed by favorable operating conditions in the Philippines, Moody’s said.

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