Phl hopeful of early credit rating upgrade

MANILA, Philippines - With the recent upgrade in the outlook for the Philippines to positive from stable, the government is hoping that a credit rating upgrade would follow earlier than expected.

Government economic managers said a credit rating upgrade should follow as early as next year.

“If you look at the fundamentals, we deserve a second look,” Finance Secretary Cesar Purisima said.

On Friday, Standard & Poor’s said it had upgraded its outlook for the Philippines to positive from stable.

Purisima said this is a welcome development but noted that the country is still underrated by credit rating agencies despite “evident and relevant gains to improve the government’s fiscal position, debt ratios and our overall macroeconomic picture.”

The finance chief added that the outlook upgrade should translate into a “much-deserved credit rating upgrade, sooner rather than later.”

Economic managers are hoping the upgrade would happen this year instead of 2013 as they earlier expected.

“Clearly, this adjustment from S&P reflects the Philippines’ strength amid the present global uncertainties, thanks to the reforms the Aquino administration had instituted for the past 18 months since it took over. It is worth noting that this outlook upgrade is the fifth positive credit rating actions made by various agencies for the Philippines since the Aquino government took helm,” Purisima said.

In a statement, S&P’s credit analyst Agost Benard said the agency revised the outlook to positive to “reflect its assessment that the Philippines’ external vulnerability has diminished.”

Benard said the country’s fiscal profile remains weak but is improving and that this is balanced by its strong external liquidity position as well as improving economic growth.

“The ratings could be raised on material progress in achieving a sustainable structural revenue improvement or further strengthening of the public balance sheet, yielding reduced fiscal vulnerability,” Benard said.