RTTNews - Thursday, Moody's Investors Service upgraded the Philippines' foreign and local currency government ratings to Ba3 from B1, citing the resilience showed by the country's financial system and external payments position in the face of global crisis.

The rating agency also raised the country ceiling for foreign currency bank deposits to Ba3 from B1 and the country ceiling for foreign currency bonds to Ba1 from Ba3.

The change in the foreign currency bond ceiling is based on a revised assessment of the risk of an external payments moratorium to low from moderate, Moody's said.

The outlook on the ratings is stable, it added.

International reserves of the Philippine central bank are at a historical high and exceptional policy measures have not been required to shield the banking system from global shocks, the rating agency said.

At the same time, Moody's noted that pressures have risen on the government budget and are more severe than had been originally expected this year. But, at the same time, the larger fiscal deficit should be finance-able from domestic and foreign funding sources.

Moody's Senior Vice President Tom Byrne said, The re-opening of global credit markets this year has also been opportunistically exploited by the Philippines in its effort to minimize both a crowding-out of the domestic markets and a rise in government bond yields.

Moody's expects the Philippines to restore its economic growth gradually, and, along with that, some pick-up in the government's fiscal revenue performance will help contain the abnormally large deficit.

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