PHL to receive more credit upgrades — DBS

Because of better macroeconomic and fiscal fundamentals, the Philippines will likely receive more credit upgrades from international credit rating agencies, Singapore-based DBS Bank Ltd. said in a report Monday. In “Emerging Markets Strategy for the First Quarter of 2011," DBS Bank economist David Carbon said the Philippines has come out of the global financial crunch stronger with a stable inflation, strong international liquidity position, and improving fiscal finances. “Looking ahead, the door for more ratings upgrade should be opened if the Philippines succeed in maintaining its post-crisis positive momentum," DBS said in the report. DBS Bank said the Philippine economy — as measured by the gross domestic product (GDP) —would grow 6.2 percent on average this year before easing down to 5 percent next year. The country’s GDP grew 7.5 percent in January-September this year from 0.7 percent in the same period last year. From the current ratio of 3.9 percent, DBS Bank believes the administration of President Benigno Aquino III could trim the budget deficit to 2 percent of the GDP starting 2013 until his term ends by 2016. “President Aquino appears to be fulfilling his campaign pledge of prudent spending," DBS Bank said. The Bangko Sentral ng Pilipinas (BSP) expects the country to get another credit rating upgrade from New York-based Moody’s Investors Service before the year ends. Last Nov. 12, Standard and Poor’s raised the country’s credit rating to BB from BB-, with a stable outlook. BSP Gov. Amando Tetangco Jr. said in an earlier interview with reporters the country deserves a credit rating upgrade from Moody’s after successfully surviving the onslaught of the global economic meltdown. “We are hopeful that Moody’s for instance will improve the rating, at least on the outlook, because there’s been significant amount of progress in various areas. The market has really gone ahead of the ratings agencies, [and] there needs to be a catch up there," Tetangco said. S&P's, Moody’s, and London-based Fitch Ratings are closely watching the fiscal and monetary developments in the Philippines. Moody’s upgraded the country’s credit rating outlook to positive from stable as early as 2008. However, the firm has yet to upgrade its sovereign credit rating for the Philippines, which is currently three notches below investment grade. Fitch Ratings, on the other hand, rates Philippine debt at two notches below investment grade with a stable outlook. — JE/VS, GMANews.TV