Representatives of Moody’s Investors Service have met with the government’s economic managers as part of the credit rating agency’s annual review of the country’s creditworthiness.

Finance Secretary Benjamin E. Diokno and incoming Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona on Friday, June 30, met with Moody’s sovereign review team, led by analysts Christian de Guzman and Grace Lim.

During the meeting, Diokno and Remolona provided key information to Moody’s sovereign review team regarding the Marcos administration's economic policies, the Department of Finance (DOF) said.

These insights encompassed key macroeconomic developments, the ongoing economic and fiscal policy reform agenda, as well as an overview of the nation's growth trajectory and external economic outlook.

Aside from Diokno and Remolona, Budget Assistant Secretary Romeo Matthew Balanquit and National Economic and Development Authority Assistant Secretary Sarah Lynne S. Daway-Ducanes also participated in the meeting.

A sovereign review visit is an annual assessment conducted by credit rating agencies, such as Moody’s, on the creditworthiness and risk profile of a country's sovereign debt.

During the visit, credit rating agencies evaluate the ability and willingness of the government to meet its financial obligations on its outstanding debt, including interest and principal payments.

Representatives from the credit rating agency typically meet with government officials, BSP representatives, and other relevant stakeholders to gather information and assess various factors that may impact the country's creditworthiness.

These factors can include economic indicators, fiscal policies, political stability, regulatory frameworks, and external factors such as global economic conditions or geopolitical risks.

The credit rating agency analyzes the information gathered during the review visit and assigns a credit rating or updates an existing rating for the country's sovereign debt.

In September 2022, Moody’s affirmed the country’s investment grade credit ratings as the debt watcher believes the challenging global economic conditions will not derail the country’s recovery from the prolonged pandemic.

Moody’s, one of the three major international credit rating agencies, kept the Philippines’ “Baa2” rating, which is one notch above minimum investment grade, and with a "stable" outlook.

“The rating action is driven by Moody's view that the challenging global credit conditions will not derail the Philippines' ongoing recovery from the coronavirus pandemic,” the rating agency said.

However, Moody’s noted that “the severity of the pandemic shock has led to an erosion in the rating agency's assessment of economic strength.”

A higher credit rating indicates a lower perceived risk and can result in lower borrowing costs for the government, as investors may be more willing to lend money at lower interest rates.