Abad: Phl closes in on investment grade status

MANILA, Philippines - The Philippines may achieve investment grade next year following the decision of Standard & Poor’s Ratings Services (S & P) to raise its debt outlook on the country, Budget and Management Secretary Florencio Abad said over the weekend.

 “With Standard & Poor’s raising their debt outlook for the Philippines, we are even closer to making investment grade next year, affirming the country’s growing reputation as a prime investment destination,” he said.

He said S&P’s outlook upgrade would reap benefits for the country.

 “We expect this upgrade to further reduce our risk profile and bring down the cost of borrowing, as well as lower the cost of doing business in the country,” Abad said.

He expressed hopes the outlook upgrade would further put the Philippines on the radar screen of investors and consequently help create more jobs. 

 “S&P’s raised outlook for the country reinforces the virtuous growth cycle we are now developing, where improved governance is the jumping board for genuine economic growth. This growth, in turn, will foster a thriving investment climate that will create jobs, sustain and build on our fiscal strengths, and create real benefits for the people,” he said.

Last week, S & P revised its outlook on the ratings on the Republic of the Philippines to “positive” from “stable.” At the same time, it affirmed its ‘BB+’ long-term and ‘B’ short-term sovereign credit ratings.

“We revised the outlook to positive to reflect our reappraisal of the political and institutional factors underlying the ratings,” said S & P credit analyst Agost Benard.

S & P said the positive outlook reflects its more favorable assessment of the prevailing political conditions and of the administration’s improved capacity to pursue its reform agenda.

The global debt watcher said it may raise the ratings next year on an improved government revenue structure, a continued diminished reliance on foreign currency government debt financing, or a lower government debt burden.