Fitch upgrades PHL credit rating for first time in 8 years

For the first time in eight years, global rating agency Fitch Ratings has raised the grade of Philippines long-term debt, lauding the Aquino administration for "broadly disciplined fiscal management" of the budget deficit, revenue collection and monetary policy. Fitch stamped a “BB+" on Philippine long-term foreign currency debt and “BBB-“ on long-term peso debts. It also maintained at “B" the short-term foreign currency issuer default rating. "The upgrade reflects progress on fiscal consolidation against a track record of macro stability, broadly favorable economic prospects and strengthening external finances," said Andrew Colquhoun, head of Fitch's Asia-Pacific Sovereigns team. The BSP said the rating hike is record-setting. "The Fitch upgrade by one notch is very significant in that Fitch rating has been unchanged in the last eight years notwithstanding the remarkable strides in the economy during the same period," Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said in a text message. Fitch noted the improvement of the budget deficit level to 3 percent of GDP in 2011, down from 3.7 percent in 2010. Also cited was the 18 percent revenue growth in the first four months of 2011, against a nominal GDP growth of 9.3 percent. The credit rating agency also praised the BSP for sustaining its "track record of delivering effective monetary policy management" as inflation stayed below 5 percent because of its recent policy decisions. — Earl Rosero/VS, GMA News