Disclosed is a process for the manufacture of a modified polyalkylene terephthalate such as modified polybutylene terephthalate. In particular, the process comprises employing a titanium-containing catalyst formed by the reaction product of tetraalkyl titanate and a complexing agent comprising a phosphorous, nitrogen or boron atom. The process is used to prepare modified polyalkylene terephthalates characterized by improved hydrostability, as well as compositions derived therefrom.