By Joann Santiago
MANILA, Feb. 4 (PNA) — Moody’s Investors Service forecasts more cross-border issuance among Philippines’ corporates in the near term with demand for these instruments remaining strong on back of the continued improvement of the country’s macrofundamentals.
In a research note, the debt watcher said foreign investors who are diversifying their portfolios are easily attracted to Philippines’ and domestic corporates, which in turn is seen to boost market conditions.
These, as the domestic economy has been posting over five percent growth in recent years due to regulatory and fiscal reforms bringing with it robust economic growth prospects.
For one, strength of the country’s external payments position has been cited by the major debt watchers and remains among the reason for the economy’s resiliency and the achievement of at least 21 positive ratings action from Moody’s, Standard & Poor’s (S&P) and Fitch Ratings since 2010.
In 2013, the country was upgraded by the three major debt rating agencies to investment grade status.
In 2014, Moody’s and S&P further upgraded their ratings on the country to two notches above junk status at Baa2 with “stable” outlook and “BBB” with “stable” outlook, respectively.
Moody’s said that as the Philippines becoming among the net beneficiaries of lower global commodity prices “investors appear keen to gain exposure to the country.”
With the domestic economy remaining attractive Moody’s said “an increasing number of Philippine corporates could look to the international markets to take advantage of favorable sentiment.”
This, in turn, is expected to also increase foreign currency financing needs due to the uptrend of offshore merger and acquisition.
”Nevertheless, a sudden surge in new offshore issuance is unlikely given that domestic liquidity conditions remain broadly accommodative,” the debt watcher added. (PNA)