MANILA - Moody's Investors Services said the clashes in Marawi and the imposition of martial law in Mindanao will not affect the country's growth prospects.
Moody's is retaining the Philippines' 6.5 percent growth forecast for this year, saying the ongoing siege in Marawi will not have any significant impact on the country's robust near-term economic outlook.
"We expect the impact on economic activity from the crisis in Marawi to be minimal and short-lived," said Christian de Guzman, vice president and senior credit officer at Moody's.
But De Guzman also warned that the economy may be affected if the situation in Mindanao deteriorates and the Duterte administration extends martial law.
"However, although unlikely to happen, potential challenges to the constitutional system of checks and balances could arrest or reverse the improvements in the rule of law over the past few years," he said.
"Unless violence escalates markedly and/or martial law is extended and imposes significant constraints to the economy, the contribution of the region to national output will remain positive," de Guzman said.
Moody's has given the Philippines a Baa2 credit rating or a notch above minimum investment grade on a stable outlook.