ASEAN KEY DESTINATIONS
Credit agencies warn Philippines
In the strongest warning yet, Standard & Poor's Ratings Services (S&P), which maintains a stable outlook on the Philippines, said this would turn negative "if the current deterioration in fiscal outcomes proves more than temporary."
In a statement, the credit rating firm said "weakening commitment to fiscal prudence or the inability of a new administration to pursue reforms" also would merit a negative outlook.
A negative outlook increases the likelihood of a reduction in the country's credit score, thus raising its borrowing costs-something it can ill afford at a time when the government is looking to tap the debt market to plug its budget deficit.
The government is faced with a fiscal gap of P325 billion this year.
In a separate statement, Moody's Investors Service said a reduction in the Philippines' rating "would arise from an inability to improve government finances, or a structural weakening in the balance of payments."
Moody's also maintains a stable outlook on the Philippines, and in July last year, upgraded the country's sovereign bond rating to Ba3 from B1 previously.
The rating firm said a positive outlook however would result from the "continued resiliency of the country's balance of payments and health of the financial system coupled with progress towards fiscal consolidation."
Similarly, Moody's kept its Ba3 rating on the Philippines' planned peso global bond.
Separately, Fitch Ratings Inc. on Thursday issued a statement that it would keep its "BB" credit score.
In 2007, the country’s FDI inflows amounted to $2.92 billion.
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