Moody’s assigned a credit rating of “Baa2” for these yet-to-be-issued debt instruments, a sign that the borrowing is imminent.
The bond tranches are set to mature in 2030, 2035, and 2049, and will be used for general budgetary support and to fund eligible projects under the Philippines' Sustainable Finance Framework, it said in a statement.
The government borrowed $10 billion from the international market last May through a 10-year bond issue, with the proceeds also meant to fund the Marcos administration’s spending program.
Moody’s Baa2 rating reflects the Philippines' high economic growth potential, robust access to domestic and international funding markets, and substantial foreign-currency reserves.
The rating agency noted several challenges, including the country's low per capita income, institutional constraints, and exposure to climate risks. Geopolitical tensions, particularly with China, also pose risks to the country's economic stability.
Despite global uncertainties, the Philippines is expected to maintain strong economic growth, with projections of around 6 percent annual gross domestic product growth over the next two years, Moody’s said.
This growth is anticipated to support fiscal consolidation efforts and a gradual reduction in the fiscal deficit. However, debt affordability may weaken due to elevated government funding costs and a depreciating Philippine peso, increasing the interest burden on the government’s debt portfolio, it said.
