Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

Home  >>   Daily News  >>   Philippines News  >>   Economy   >>  Fitch keeps Philippine rating
NEWS UPDATES 10 August  2010

Fitch keeps Philippine rating

Related Stories

August 6, 2010
Philippine inflation holds steady

August 5, 2010
Philippine credit rating needs plan

July 24, 2010
 Inflation could still be a Philippine issue

July 10, 2010
Philippines raises growth targets

July 9, 2010
Bank calls for domestic demand boost

Fitch Ratings said it kept its below investment-grade credit rating on the Philippines and would likely hold on to this assessment until such time that the Aquino administration improves its tax collections and shows it would stick to its budget deficit ceiling.

In a statement, the rating firm said it affirmed the Philippines’ long-term foreign-currency issuer default rating at “BB” with a stable outlook.

Fitch also kept its “BB+” long-term local-currency rating, likewise with a stable outlook. The short-term foreign-currency rating still stood at “B,” while the country ceiling held at “BB+.”

“While the credit profile has strengthened in some areas since the ratings were downgraded to current levels in 2003, Fitch waits for the newly elected Aquino administration to deliver on promises to boost the chronically-low tax take and maintain fiscal discipline in the 2011 budget to support a case for any positive rating action,” said Andrew Colquhoun, head of Asia Pacific Sovereigns at the rating firm.

“Raising the fiscal revenue share would directly address the Philippines’ main rating weakness, while generating resources to meet President Aquino’s campaign pledges to raise public investment,” Colquhoun said.

The Philippines’ tax effort of 14.6 percent of gross domestic product (GDP) last year is “well below the median of 21 percent for ‘BB’ range countries,” he said.

An indicator of economic performance, GDP is the amount of final goods and services produced in the country

Besides remittances, “the Philippines’ emergence as a global back-office process outsourcing center” also helped prop up the country’s current account surplus, Fitch said.

It said the Philippines became a net external creditor in 2009 of about 3 percent of GDP, a turnaround from the 40 percent net external debt ratio in 2003.

The rating firm said the Bangko Sentral ng Pilipinas’ (BSP) “monetary management has delivered lower and less volatile inflation than rating peers, contributing to lower dollarization—22 percent against the “BB” median of 54 percent—and supporting financial stability.”

But “sustained growth with low and stable inflation would support the Philippines’ ratings at their current levels” only, Fitch said.


Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates
Contact: marketing@aseanaffairs.com

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
 
or
submit your comment in the box below
Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com