PRESIDENT Rodrigo Duterte's declaration of national emergency on the account of lawless violence has limited immediate impact on the Philippines' credit rating, Moody's Investors Service said Wednesday.
"The near-term sovereign credit impact of these developments is limited as we do not expect them to change economic and fiscal policies or outcomes," Moody's said, referring to the bomb explosion in Davao City night market last Friday and the subsequent declaration of a "state of lawlessness" by the President.
At least 14 people were killed and 70 others were injured in the bomb attack.
The declaration of the national emergency allows for heightened security measure, including the stepped-up deployment of soldiers and policemen in key areas, it noted.
Moody's cited the Philippine average economic growth of 6.9 percent year-on-year through the first half of 2016, a stronger performance than similarly rated peers.
"We do not expect recent events to meaningfully derail this economic momentum," it said, citing that while Mindanao has about 24 percent of the Philippine population, it only accounted for 14.8 percent of gross domestic product in 2015 and contributed 0.8 percentage point to the country's real GDP growth of 5.9 percent in the same year.
"At this stage, as long as the interventions under the state of lawlessness do not affect bsuiness nationwide, we assume that investment decisions will not be materially affected," Moody's explained.
But the credit rating agency warned that if the recent events lead to prolonged uncertainty around security or economic policy, "such a development would eventually dampen business confidence and, consequently, economic outcomes."
Moody's current credit rating on the Philippines is Baa2 with stable outlook. (SDR/Sunnex)