Moody’s Corporation is set to become the first global credit-rating agency to invest in a Philippine firm, taking a minority stake in Philippine Rating Services Corporation (PhilRatings) as the country’s domestic debt market expands.
The investment in Manila-based PhilRatings will give Moody’s a foothold in the local ratings market while expanding its network of domestic rating-agency affiliates across Asia-Pacific. The transaction comes as the Philippines seeks to deepen its capital markets and tap more private financing for infrastructure and other long-term investments.
“Strong domestic debt markets are essential to supporting sustainable economic growth,” said Wendy Cheong, managing director and regional head of Asia Pacific, Moody’s Ratings. “PhilRatings has built deep insight into the local market, and its ratings serve as a strong complement to Moody’s global views on credit for investors in the Philippines.”
The move comes against a backdrop of growing demand for domestic debt financing across Southeast Asia. Corporate bonds outstanding in the region are more than twice the size of cross-border holdings, while the Philippines has more than $100 billion of planned infrastructure investment over the next three years, according to Moody’s.
The expansion of the local bond market is expected to increase the role of credit ratings and research in helping companies access new sources of capital, develop funding strategies, and provide investors with greater transparency.
“Moody’s Ratings’ global standards, best practices, and technical support will help us advance our mission to strengthen the credit market infrastructure in the Philippines,” said Angelica Viloria, president of PhilRatings. “Moody’s role as a minority stakeholder reinforces our commitment to trust, credibility, and best-in-class credit ratings and research for the Philippine market.”
PhilRatings will continue to operate independently following the investment, with its own management, governance structure, and credit-rating processes.
The deal marks Moody’s first investment in a domestic credit-rating agency in the Philippines and adds to its Asia-Pacific network of local rating affiliates. Financial terms of the transaction were not disclosed.
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