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PHL aims for "A" rating as S&P maintains investment grade

20 พฤษภาคม พ.ศ. 2558

 

The Philippines is now aiming for the much coveted category "A" rating over the medium-term after Standard & Poor’s maintained its investment grade for the Southeast Asian nation.

 
S&P's minimum rating within the "A" category is "A-" or two notches up from the Philippines’ current rating of "BBB." 
 
“Fundamentals of the Philippines significantly improved over the last few years. With the trend staying positive, additional upgrades in the credit ratings over the medium-term should be achievable,” said Bangko Sentral ng Pilipinas  (BSP) Governor Amando Tetangco Jr.
 
“On the part of the BSP, efforts to further improve the regulatory environment for financial institutions, maintain price stability, and strengthen external payments position would be its contributions to placing the economy on an even higher gear,” Tetangco said.
 
S&P maintained its long-term, foreign currency rating of “BBB” for the Philippines, reflecting on a solid growth trajectory given sound fundamentals of the economy.
 
The debt-watcher assigned a “stable” outlook on the rating, which is one notch above the minimum investment grade assigned to the Philippines in May 2014, the Philippine Investor Relations Office (IRO) noted in an emailed statement.
 
S&P cited strong external payments position, improved fiscal situation, stable financial system, within-target inflation, robust domestic consumption, and young labor market as the factors likely to keep the positive trend for the Philippines.
 
“The ratings on the Philippines reflect our assessment of its strong external position, which features rising foreign exchange reserves and a low external debt burden,” S&P said.
 
 

"A" is attainable

In the same statement, Finance Secretary Cesar Purisima said a credit rating in the “A” category should be attainable, especially since the Philippines still remains underrated if one would compare its credit ratings with how the market prices Philippine debt papers.
 
“If compared with those of other emerging markets, fundamentals of the Philippines are one of the strongest. And with continually improving major credit indicators, including debt manageability, credit ratings ideally should adjust accordingly,” Purisima said.
 
S&P projects the government’s budget deficit, a key indicator of creditworthiness, will average at a modest 1 percent of gross domestic product from 2015 to 2019, better than the average of 2 percent posted in 2010 to 2014 and much better than the average 4 percent in the decade prior to 2010.
 
When President Aquino assumed office in 2010, the goal was to secure the minimum investment grade from all three major international credit-rating firms Fitch Ratings, Moody’s Investors Service, and S&P by 2016, according to the IRO
 
The Philippines now holds an investment grade rating that is a notch above the minimum from S&P at "BBB" and from Moody’s at "Baa2," and compares with  minimum investment grade of "BBB-" from Fitch.
 
 “Throughout the past five years of pursuing initiatives toward good governance, we have managed to outperform even our own targets and expectations. Moving forward, we expect to sustain the reform momentum and to raise the bar even higher,” Purisima said. – VS, GMA News


CR: http://www.gmanetwork.com/news/story/475858/economy/business/phl-aims-for-a-rating-as-s-amp-p-maintains-investment-grade