BNP Paribas sees positive outlook for RP

Global financial giant BNP Paribas expressed a "very positive outlook" on the Philippine economy as reflected in the way the peso has been performing, a top company official said.

"We see the peso capable of appreciating to 47 to the (US) dollar by the end of the year," said Peter C. Labrie, Philippine country manager for BNP Paribas.

Andrew F. Freris, chief economist for Asia of BNP Paribas, earlier said that the peso has the potential of strengthening further to 45 to the dollar in 2008.

However, the BNP Paribas executives said much depend on the conduct of the elections in May and how the international community will react.

"Assuming that the May elections are peaceful, smooth and perceived to be honest, there could be an improvement in the credit rating of the country which would impact on debt servicing," Labrie said.

An upgrade of the country’s credit rating would have an impact on debt servicing. A positive credit rating means lower interest rates on borrowings with lower political risk considerations, while poor ratings means high interest rates, higher risk premiums, and to the extreme, unavailable fundingsources.

So far, BNP Paribas said it is bullish on the Philippine economy as it took positive note of improving fiscal reforms and the continued shrinking of the fiscal deficit.

Meanwhile, Labrie said there are also positive signs for growth in investments especially in the mining sector. Other strong growth areas are in tourism, infrastracture, services like BPO and logistical regional centers.

"We have been involved in several lending syndicates or facilities for funding for such AAA corporates like Ayala Corp., Mirant, Globe Telecom, Petron Corp., Smart Communications, JG Summit, and other top local corporates and multinationals," he said.

In the Philippines, BNP Paribas has an offshore banking branch license.

As an offshore branch, it provides facilities in foreign currency including working capital, trade finance, correspondent banking and forex services with the help of its worldwide network. It has access to services such as structured finance, fixed income, asset management and investment services.

"BNP Paribas in Manila deals with an exclusive group of clients including multinational corporations, large conglomerates and many of the top 1,000 Philippine corporations," Labrie said. It also has expertise in mergers and acquisitions.