Friday, 06 July 2012 15:41
Economic managers are positive that the Philippines has the momentum to get an investment grade credit rating following Standard and Poor’s (S&P) upgrade of the country’s rating to ‘BB+’ Wednesday.
“We have a positive ratings momentum given all the favorable developments in the economy,” Bangko Sentral ng Pilipnas (BSP) told PNA Wednesday night.
Also, Finance Secretary Cesar Purisima is grateful that S&P has noted the improvement in the government’s fiscal and monetary front.
“This is the 8th positive credit ratings action under the Aquino administration and this only gives us more confidence to continue with the work that we have started towards macroeconomic stability, fiscal sustainability and inclusive economic growth.”
“Two out of three major credit rating agencies now have us one notch below investment grade. We can now clearly make our case for an investment grade status,” he added.
Aside from the upgrade of the country’s foreign currency rating from ‘BB’ with outlook placed at “Stable” on account of continued improvement in the country’s fiscal flexibility S&P also affirmed the domestic economy’s ‘BB+’ long-term local currency rating.
“In our assessment, the Philippines's fiscal flexibility is gradually increasing, reflecting an improving government debt profile and moderating interest burden,” the ratings agency said in a statement.
“The stable outlook balances the country's emerging net-external-creditor status, relatively strong external liquidity, and signs of improving growth prospects, against low income levels and continuing challenges in fiscal and structural reforms,” it said.
“We expect the country will move into a slight net-external-creditor position this year,” it added.
Relatively, S&P also affirmed its 'B' short-term sovereign credit ratings and 'axBBB+'/axA-2' ASEAN scale ratings on the Philippines while the country’s transfer and convertibility assessment (T&C) was changed to 'BBB-' from 'BB+'.
By Joann Santiago
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