The Philippines' economy is standing strong post Typhoon Yolanda and the eventual tapering of the US Federal Reserves' bond purchases, debt-watcher Moody's Investors Service said. "We expect the Philippines to sustain high growth relative to peers over the 2-3 year rating horizon" reported by Moody’s. The Philippine
The Philippines' economy is standing strong post Typhoon Yolanda and the eventual tapering of the US Federal Reserves' bond purchases, debt-watcher Moody's Investors Service said. "We expect the Philippines to sustain high growth relative to peers over the 2-3 year rating horizon" reported by Moody's.
The Philippine economy grew by 7.4 percent in the first three quarters, the fastest in Southeast Asia.
A healthy current account surplus, which grew by 9.1 percent to $2.5 billion in the second quarter, and domestic demand for government bonds provided a "strong buffer" against external financial shocks like the Fed's looming cut in stimulus, said Moody's.
The Philippines, however, still faces credit challenges.
In the report, Moody's noted that the Philippines' per capita income is low, higher only than India among investment grade countries.
Moreover, Philippine revenues' ratio to the gross domestic product remains relatively "low" despite gains from more efficient tax administration which allowed the Aquino administration to spend higher for infrastructure development.
Much of the country's debt is also in foreign currency, making it "susceptible" to foreign exchange volatility compared with other investment grade countries.