'Peace deal to boost Phl's credit rating'

TOKYO – Credit rating agencies are “very pleased” with developments in the Philippines, particularly on the economic and political fronts, Finance Secretary Cesar Purisima said yesterday.

In an interview with The STAR, Purisima said the credit raters have shown interest in the country’s fiscal status, economic growth, the status of the public-private partnership program and even in the preliminary peace deal between the government and the Moro Islamic Liberation Front (MILF).

“They are very positive. They recognize the important structural reforms that have been undertaken in the past,” Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said in a separate interview.

The Philippine officials briefed Standard & Poor’s on Thursday, and Fitch Ratings and Moody’s Investor Service on Friday night on breakthroughs achieved by the Philippines in its reform efforts.

The Philippines is trying to secure an investment-grade rating by 2016, to widen access to financing as well as entice more investors.

“The market has graded us two notches above credit rating. The credit ratings are known as lagging indicators but I hope they catch up soon,” Purisima said.

To date, the highest credit rating of the country came from Fitch and Standard & Poor’s, which ranked the Philippines only a notch below investment grade with stable outlooks.

Moody’s has placed the country two notches below investment grade but with a positive forecast.

Purisima said Mindanao is a potential boost to our growth rate, referring to the positive turn of events in the Mindanao peace process.

“It means there is better chance of pursuing growth. More resources will be free that can provide us with an additional momentum in pursuing growth,” Guinigundo said, apprising credits raters of the impact of the Mindanao development on overall growth.