OFF INTO THE WILD WET YONDER How does this...
Moody’s Investors Service, Inc., is hinting that another credit rating upgrade for the Philippines could be coming very soon. As recently as Q4 of last year, Moody’s upgraded the country from Ba1 to Baa3 and noted a positive outlook.
This would come on the heels of a Standard & Poor’s Financial Services LLC (S&P) credit rating upgrade earlier this month, when the credit rating agency raised the Philippines from BBB- to BBB a year ago. Moreover, the S&P rating is the highest credit rating the Philippines has ever had. Both upgrades will certainly attract more foreign investment and allow the government to borrow from overseas at lower rates.
I can almost hear the comments now… “Ummmm, aren’t these the same [incompetent/complicit, depending on your viewpoint] credit rating agencies that were involved in the financial crisis of 2007–08? Not exactly reassuring.” I agree. And so does former Chairman of the U.S. Federal Reserve Paul Volker. These agencies should have been taken to the woodshed, put out of business, maybe even faced a court of law, but things don’t work like that anymore in the United States, or globally for that matter, unless, of course, you’re a foreign corporation in China.
So when the only game in town (for better or worse) makes it easier for you to grab some extra cash, it’s not something to easily turn your back on. As we all know, life is easier with cash than without. Let’s just hope these improving credit ratings keep on coming, and that this long-time frontier market, currently an emerging market, keeps on buzzing along so that everything remains “more fun” there.
H/T: The Philippine Star