Moody's: Philippines bond Ba3

Moody's Investors Service said it will assign a Ba3 rating to the Philippines government's forthcoming Philippine peso-denominated global bond issuance.

The rating is well anchored by the continued strength in the sovereign's external payments position and a favorable outlook for domestic-demand driven economic growth, Moody's said.

In addition, the rating is supported by a relatively sound and liquid banking system, which does not pose foreseeable risks to the government's balance sheet," says Christian de Guzman, a Moody's Assistant Vice President and the lead sovereign analyst for the Philippines.

Robust overseas remittances over the past few years have coupled with sizeable portfolio inflows more recently to boost foreign exchange reserves to a historically high level, providing the economy and government finances a significant buffer against external shocks.

The stable outlook is also influenced by the continued ability of the country's central bank to anchor inflationary expectations under its formal inflation-targeting framework. Inflation fell close to the lower bound of Bangko Sentral's target range of 3.5 to 5.5 percent for 2010 and is expected to remain well within the range of 3.0 to 5.0 percent for 2011.

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