The Philippines is now rated investment grade by three major credit ratings agencies – a status that puts the tiny Asian state ahead of its peers and should help protect it from any further emerging-market volatility, analysts say.



Moody's on Thursday lifted the Philippine sovereign credit rating by one notch to Baa3, citing firm economic growth, improvements in the fiscal position and political stability.

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The decision follows similar upgrades by Fitch Ratings and Standard & Poor's earlier this year and comes at a time when recent volatility in emerging markets has cast a cloud over the credit ratings outlook for Asian neighbors such as India and Indonesia.



"From a strategic stand-point, the Philippines is well-placed to benefit from "leap-frogging" Indonesia, and implicitly India, on a relative ratings dynamics," analysts at Mizuho Corporate Bank said in a note.

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"For Indonesia, touted as the next emerging-market Asian nation to achieve all-around investment grade status, slipping behind the Philippines was emphatic; S&P lowered its sub-investment grade outlook from "positive" to "stable" in May," they said. Indonesia has an investment grade rating from Moody's and Fitch but not S&P.

Concerns about a downgrade to India's credit rating meanwhile resurfaced after the Indian rupee sank to a record low against the U.S. dollar in August, although the currency has rebounded since then.

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