Philippines wins investment grade rating

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Aquino
Investors acknowledge Philippine president Benigno Aquino’s growth policy

The Philippines on March 27 received, for the first time ever, an investment-grade credit rating from one of the world’s major ratings agencies.

Fitch Ratings raised its assessment one level to BBB- from BB+, the rating agency said in a release, rewarding Philippine President Benigno Aquino for leading a growth resurgence after lagging its regional peers for decades.

The move represents an important vote of confidence for the Southeast Asian island nation, which has been growing at a rapid clip for the past few years but whose per capita income is still among the lowest in Asia.

However, the exit from junk investment status bolsters Aquino’s drive to transform the nation into one of the region’s fastest-growing economies. The upgrade is also expected to boost capital inflows and complicate the job of the central bank as it tries to rein in an appreciating peso and curb asset bubbles.

Investors applauded to the news of the upgrade, sending the main stock market index up almost 3 per cent. The Philippine stock market soared more than 30 per cent in 2012, one of the best performances in the world, and has risen an additional 17.8 per cent so far this year — the third best in Asia after Japan and Vietnam. The Philippine peso has climbed 7 per cent against the dollar since the start of 2012.

Foreign direct investment, likewise, rose 8 per cent in 2012 to $2 billion, from $1.9 billion in 2011.

“This is an upgrade that was long overdue,” Norio Usui, country economist for the Philippines at the Asian Development Bank, commented Fitch’s decision.

Current credit ratings of the Philippines:

Moody’s: Ba2

Standard & Poors: BB+

Fitch: BBB-

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Reading Time: 2 minutes

Investors acknowledge Philippine president Benigno Aquino’s growth policy

The Philippines on March 27 received, for the first time ever, an investment-grade credit rating from one of the world’s major ratings agencies.

Reading Time: 2 minutes

Aquino
Investors acknowledge Philippine president Benigno Aquino’s growth policy

The Philippines on March 27 received, for the first time ever, an investment-grade credit rating from one of the world’s major ratings agencies.

Fitch Ratings raised its assessment one level to BBB- from BB+, the rating agency said in a release, rewarding Philippine President Benigno Aquino for leading a growth resurgence after lagging its regional peers for decades.

The move represents an important vote of confidence for the Southeast Asian island nation, which has been growing at a rapid clip for the past few years but whose per capita income is still among the lowest in Asia.

However, the exit from junk investment status bolsters Aquino’s drive to transform the nation into one of the region’s fastest-growing economies. The upgrade is also expected to boost capital inflows and complicate the job of the central bank as it tries to rein in an appreciating peso and curb asset bubbles.

Investors applauded to the news of the upgrade, sending the main stock market index up almost 3 per cent. The Philippine stock market soared more than 30 per cent in 2012, one of the best performances in the world, and has risen an additional 17.8 per cent so far this year — the third best in Asia after Japan and Vietnam. The Philippine peso has climbed 7 per cent against the dollar since the start of 2012.

Foreign direct investment, likewise, rose 8 per cent in 2012 to $2 billion, from $1.9 billion in 2011.

“This is an upgrade that was long overdue,” Norio Usui, country economist for the Philippines at the Asian Development Bank, commented Fitch’s decision.

Current credit ratings of the Philippines:

Moody’s: Ba2

Standard & Poors: BB+

Fitch: BBB-

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