MANILA,
Philippines - The Philippines has been awarded another investment grade
rating, this time from Korean firm National Information and Credit
Evaluation Ratings Inc. (NICE).
The credit rating raised the country’s long-term, foreign currency
rating by a notch to BBB- with a positive outlook, which means further
upgrade may be awarded in the short term.
“The rating upgrade reflects improved fiscal profile and growth
potential, robust stability in the financial market and the external
sector, and the government’s continuing efforts to improve governance
and infrastructure,” NICE said in a statement.
The firm stressed that key factors considered for the rating included
the strong economic growth of 7.2 percent achieved in 2013 although
this is forecast to slow to six percent this year. NICE noted that the
deceleration will be on the back of a “normal economic adjustment” as
the growth momentum is seen being sustained.
The credit rating agency also pointed out the stability of Philippine
financial markets despite global sell-offs of emerging market assets
since May last year.
NICE said domestic markets are less vulnerable due to the country’s
strong current account position and abundant liquidity levels.
“About the issue of real estate market overheating, which emerges due
to the expansion of the construction industry and the rise in real
estate prices, NICE expects it is under manageable level until now and
the authorities are willing and able to contain it,” the debt watcher
said.
NICE further said that the rating will be further supported if the
country generates more investments as a result of improvements in its
governance and infrastructure.
Rating constraints, meanwhile, include an overheating economy or when
asset bubbles are formed especially in the real estate sector, NICE
said.
Government officials yesterday said the credit rating upgrade
reflects the economic gains the country is enjoying following structural
reforms earlier put in place.
“As far as the BSP (Bangko Sentral ng PIlipinas) is concerned, the
latest investment grade is another acknowledgement of efforts to
maintain an inflation environment and a financial system conducive for
business and supportive of sustainable growth,” Bangko Sentral ng
Pilipinas Governor Amando M. Tetangco, Jr. said.
Finance Secretary Cesar Purisima said “this vote of confidence
acknowledges efforts to ensure the country is able to sustain
improvements in the economy over the long haul.”
The Philippines enjoys investment grade ratings from the three
biggest global debt watchers, Moody’s Investors Service, Fitch Ratings,
and Standard & Poor’s.
S&P in May awarded the country a BBB rating, a notch above the
minimum investment grade of BBB-, with a stable outlook. Fitch ratings,
meanwhile, affirmed the country’s BBB- rating in March with a stable
outlook.
Moody’s in October last year gave the country an investment grade rating of Baa3 with a positive outlook.
