PHL ready for intl credit rating upgrade — report

The country is ready for an international credit rating upgrade, according to an industry-academe assessment of the economy. First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) Capital Markets Research said, “…the country is ripe for an upgrade, reason being that the Philippines’ economic fundamentals have remained strong with huge dollar reserves that can enable it to weather adverse external events." They noted that the foreign reserves of $67.8 billion can provide over 10 months of import cover. The amount is also equivalent to 10.8 times the short-term foreign debt FMIC and UA&P assessed that the country’s economic fundamentals are in “better shape" now than in 1997, when it got a BB+ rating. Moody’s Investors Service now has the Philippines at three steps below investment grade. Fitch Ratings and Standard & Poor’s rank the country at two notches under investment grade. In the months ahead, FMIC and UA&P see greater inflation risks, especially now that the April inflation of 4.5 percent was slightly higher than their 4.2-percent forecast. A country's dollar reserves measure its ability to meet its short-term needs for foreign currencies, while inflation erodes the currency’s purchasing power. — ELR/VS, GMA News