Philippine Investment Grade Credit Rating is on the Air


Finance Secretary Cesar V. Purisima and National Treasurer Roberto B. Tan led the Philippine delegation in meeting with banks and investor groups in Singapore on Aug. 21 and 22, the Investor Relations Office (IRO) said in a statement on Friday.

Also in the team were Bangko Sentral ng Pilipinas Assistant Governor Cyd Tuaño-Amador and IRO Executive Director Claro P. Fernandez.

"The Philippine government's economic team provided an update on the fiscal and macroeconomic situation of the Philippines, as well as on the milestones of the Aquino administration's governance reform agenda," the statement read.

Among these were the 760.92 billion in government revenues in the first semester, up by more than a tenth from the previous year, as well as the foreign exchange reserves which hit a record high $79.35 billion in July. Remittances from overseas Filipino workers also hit $10.13 billion in the first half, climbing 5.1% against yearago levels.

"The economic team highlighted that the consistent strong performance of the Philippine economy was achieved against the backdrop of continued global economic volatilities," the statement read.

"Despite the debt crisis in Europe, economic slowdown in China, and weak consumption in the US, the Philippines is structurally well positioned to sustain its growth," it continued.

The Philippines' credit rating momentum was another focal point in the meetings, especially as country bagged positive actions from Standard & Poor's (S&P) and Moody's Investors Service.

Just last month, S&P upgraded the Philippines' credit rating to BB+ from BB, taking the country to just one notch below investment grade. This is aligned with the BB+ credit rating granted by Fitch Ratings in June 2011.

In May, Moody's also raised its outlook on the country's Ba2 credit rating to positive from stable, indicating that an upgrade is likely in the next 12 to 18 months. The Moody's credit rating is the Philippines' lowest at two notches below investment grade.

"Given that the cost of protecting Philippine bonds against default for five years is lower than some investment-grade countries such as Russia, and considering that two out of the three major credit rating agencies rate the country one notch below investment grade, Secretary Purisima emphasized that the Philippines can clearly make its case for an investment grade status," the statement read.

"The reception was very positive throughout the investor presentations, with investors recognizing the strong performance of the Philippine economy... " it continued.

The Singapore roadshow followed a tour of the United States last June. This roadshow was supported by global banking giants Citigroup Inc., the Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc, ING Group, JP Morgan, Morgan Stanley and UBS AG.

Business World Online

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