Friday, March 15, 2013

Philippines a good candidate for upgrade

The Philippines has pitched for an investment-grade status from Standard & Poor’s Ratings Services (S&P) whose diligence visit to the country early this week was described by officials as “very positive.”

“We are a good candidate for investment grade. I am quite optimistic we will get it,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters yesterday.

S&P rates the Philippines one notch below investment grade at BB+ with a “positive” outlook. The forecast suggests an upgrade could come within the year.

The New York-based debt watcher is ahead among two other major credit raters, Moody’s Investors Service and Fitch Ratings, which despite rating the country one notch  below investment grade, both pegged their outlooks at “stable.”

Last month, Fitch also conducted its annual due diligence but the results are yet to be made public.

“I cannot share with you the exact details of the meeting but basically it was very positive,” Finance Undersecretary Jeremias Paul Jr. said in a phone interview.

National Treasurer Rosalia de Leon, in a separate phone interview, said the government shared its liability management strategies concentrated on lowering borrowing costs and lengthening debt maturities.

“They were very positive with what we presented,” De Leon said.

S&P officials, led by associate director Agost Benard, also asked for “clarifications” on the fiscal figures, she said without elaborating. Budget Secretary Florencio Abad, in a text message, said the agency is here to “conduct assessment” of the over-all economy.

On Tuesday, Finance Secretary Cesar Purisima reiterated the Philippines remains as one of “the most underrated” countries in the world, suggesting the market is already rating local bonds investment grade.

The Aquino administration has enjoyed 11 positive credit rating actions since it took over in July 2010 on the back of strong growth, low inflation, strong external payments position and improving state finances.-ABS-CBN News (March 14, 2013)

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