Philippines bullish on investment grade
The Philippines expects to get the much-awaited investment grade status by international rating agencies Standard & Poor’s, Moody’s and Fitch in about 6 to 8 months, an investment banker said at the sidelines of the Euromoney Philippines Investment Forum 2013 held on March 12 in Manila.
Roberto Dispo, president of First Metro Investment Corp., one of the largest investment firms in the country, told reporters that he was “sure it will happen this year” as all numbers pertaining to the country’s performance in the past years already reflect investment grade status.
The Philippines is currently ranked one notch below investment grade by the 3 major international credit rating agencies, rated BB+ by Fitch Ratings and Standard & Poor’s and Ba1 by Moody’s.
British banking giant Barclays and Singapore-based DBS Group also predicted the Philippines would receive investment grade in 2013 due to the government’s effective debt management, as did renowned US economist Nouriel Roubini and Japanese investment bank Nomura.
However, UK bank Standard Chartered isn’t that bullish and has said in its recently released Asia Focus Report 2013 that it expects the upgrading only by end-2014 “by at least two of the three main rating agencies.”
An investment grade translates into lower interest on government debts, possibly less taxes and cheaper loans for companies’ expansion, all resulting in more jobs, better social services and infrastructure.
The World Bank and the International Monetary Fund recently revised upwards their GDP growth forecasts for the Philippines’ economy, with the World Bank changing its prediction from 5 per cent in October to 6.2 per cent in December and the International Monetary Fund amending its 4.7 per cent forecast to 6 per cent in January
On the downside, structural weaknesses remain in the Philippines, including low average income, a weak business environment and a low fiscal revenue which all has taken weigh on the credit profile so far. Household incomes in the Philippines are also lower than most Southeast Asian countries, which makes the country less attractive for business. Poverty incidence in the Philippines stands at 26.5 per cent, one of the highest in Asia.
The Philippines expects to get the much-awaited investment grade status by international rating agencies Standard & Poor's, Moody's and Fitch in about 6 to 8 months, an investment banker said at the sidelines of the Euromoney Philippines Investment Forum 2013 held on March 12 in Manila. Roberto Dispo, president of First Metro Investment Corp., one of the largest investment firms in the country, told reporters that he was "sure it will happen this year" as all numbers pertaining to the country's performance in the past years already reflect investment grade status. The Philippines is currently ranked one notch below investment...
The Philippines expects to get the much-awaited investment grade status by international rating agencies Standard & Poor’s, Moody’s and Fitch in about 6 to 8 months, an investment banker said at the sidelines of the Euromoney Philippines Investment Forum 2013 held on March 12 in Manila.
Roberto Dispo, president of First Metro Investment Corp., one of the largest investment firms in the country, told reporters that he was “sure it will happen this year” as all numbers pertaining to the country’s performance in the past years already reflect investment grade status.
The Philippines is currently ranked one notch below investment grade by the 3 major international credit rating agencies, rated BB+ by Fitch Ratings and Standard & Poor’s and Ba1 by Moody’s.
British banking giant Barclays and Singapore-based DBS Group also predicted the Philippines would receive investment grade in 2013 due to the government’s effective debt management, as did renowned US economist Nouriel Roubini and Japanese investment bank Nomura.
However, UK bank Standard Chartered isn’t that bullish and has said in its recently released Asia Focus Report 2013 that it expects the upgrading only by end-2014 “by at least two of the three main rating agencies.”
An investment grade translates into lower interest on government debts, possibly less taxes and cheaper loans for companies’ expansion, all resulting in more jobs, better social services and infrastructure.
The World Bank and the International Monetary Fund recently revised upwards their GDP growth forecasts for the Philippines’ economy, with the World Bank changing its prediction from 5 per cent in October to 6.2 per cent in December and the International Monetary Fund amending its 4.7 per cent forecast to 6 per cent in January
On the downside, structural weaknesses remain in the Philippines, including low average income, a weak business environment and a low fiscal revenue which all has taken weigh on the credit profile so far. Household incomes in the Philippines are also lower than most Southeast Asian countries, which makes the country less attractive for business. Poverty incidence in the Philippines stands at 26.5 per cent, one of the highest in Asia.
