Manila: The Bangko Sentral ng Pilipinas (BSP) on Friday welcomed Moody's favorable assessment of the country's banking system and external accounts. In a statement, BSP Governor Eli Remolona Jr. emphasized that Moody's assessment aligns with the central bank's observations, noting the strength of the banks and the solidity of external buffers. He reiterated the BSP's commitment to maintaining financial stability through sound regulation and prudent management of international reserves.
According to Philippines News Agency, Moody's released a credit opinion on April 14, highlighting the robust capitalization, profitability, and management of the Philippine banking system. The credit agency commended the quality of BSP's supervision, which adheres to international regulatory standards and employs preemptive measures to support financial stability. Moreover, Moody's pointed out the Philippines' gross international reserves (GIR) as being stronger relative to external debt when compared to similarly rated economies. The country's foreign exchange reserves have surpassed pre-pandemic levels, showcasing their robustness.
As of the end of March 2026, the Philippines' GIR was recorded at USD107.5 billion, corresponding to 7.1 months' worth of imports, significantly exceeding the three-month international benchmark. Additionally, the GIR stands at 3.9 times the country's short-term external debt based on residual maturity. The BSP also highlighted Moody's recognition of the Philippines' credible monetary policy framework and flexible exchange rate, which contribute to buffering external shocks.
Moody's credit opinion elaborates on its decision on April 14, 2026, to maintain the Philippines' investment-grade credit rating of 'Baa2' with a 'stable' outlook, a rating that was reaffirmed in August 2024. An investment-grade rating indicates low credit risk, enhancing the appeal of Philippine government bonds and reducing interest rates. This rating allows the government to allocate more resources toward development projects and social services by reducing expenditure on interest payments.
