Philippines looks for credit rating upgrades

Finance Secretary Cesar Purisima told reporters Thursday that he presented last week a “strong case” before major credit rating agencies in the US to raise the Philippines’debt rating. “I told them to reconsider the Philippines as we are apparently two notches below Indonesia, which shall not be the case. Not to downgrade Indonesia but to upgrade us. I have high admiration [for] Indonesia as to how they are managing their fiscal position,” Purisima said. “I believe I presented a strong case, our cost of borrowing is already close to investment grade,” he said.

The finance chief met with Moody’s Investors’ Service in Washington, D.C., and with Standard and Poor’s and Fitch Ratings in New York City.

Moody’s maintains a Ba3 credit rating on the Philippines, or three notches below investment grade, but last January raised its outlook to positive from stable.

Fitch has a BB credit rating, which is two notches below investment grade, while Standard & Poor’s raised the country’s long term foreign currency credit rating one notch to BB from BB minus previously.

“It is crucial for us to attain an investment grade. When that finally happens, we can expect a surge in terms of investments coming into the country,” Purisima said, adding that most investors have guidelines as to where they would put their money.

“If you are not an investment grade, chances are it is a red flag for them [investors],” the finance chief said.

Also on Thursday, Japan Credit Rating Agency Ltd. (JCRA) affirmed its BBB minus credit rating on the Philippines, but raised its outlook from stable to positive on the back of the sovereign’s improving finances.

“The revision of the rating outlook reflects the greater possibility that the Philippine economy will resume momentum for the improving trend of its fiscal position after it weathered the challenges of the world financial crisis rather successfully,” Yoshihiko Tamura, JCRA chief analyst, said.