MALACAÑANG said Tuesday the country’s economic fundamentals remained strong as it downplayed the warning from debt-rating agency Moody’s Investors Service that changing foreign policies might affect the country’s economic growth.
“The poverty rate has dropped. The inflation rate is stable. Government-private contracts continue to be honored. We will be okay,” Communications Secretary Martin Andanar said in a statement.
On Monday, Moody’s said that while the Philippine government’s Baa2 rating was stable, “the country’s growth prospects could be undermined if there is a significant shift in the government’s policies.”
It said the quality of the assets of Philippine banks would remain broadly stable, but “Risks are emerging in terms of the banks’ increasing exposure to real estate-related loans and higher yielding small and medium enterprises.”
Moody’s said proactive capital raising over the past few years and higher regulatory capital requirements than international norms would help the banks maintain buffers against downside risks.