US rate hike won’t affect Philippines – R&I

MANILA, Philippines - Japanese credit rating agency Rating and Investment Information Inc. (R&I)  said the impending US interest rate hike  won’t significantly affect the Philippines.

“R&I does not believe that the Philippines’ economic fundamentals will deteriorate significantly. The rating outlook is stable,” the company said in a statement.

With the Philippine economy growing at an average of six percent, R&I said the strong economic trend together with prices stability and the financial system created a favorable macroeconomic environment.

Brisk investment has also contributed to the continued growth in the past years alongside private consumption which is the primary driver of the Philippine economy. Risks are also limited in both fiscal and external sectors.

Although share of investments in the gross domestic product (GDP) is increasing, R&I noted it is still the lowest among neighboring countries, while per-capita income levels are also low compared with other members of the Association of Southeast Asian Nations (Asean).

“If the Philippines sustains solid growth and makes steady progress in raising per-capita income, it will likely have a positive impact on its creditworthiness,” the agency said.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., on the other hand, said the country is still in a desired convergence of fast growth and lower inflation. 

“We have sufficient buffers against external shocks. The banking sector remains sound and stable. The credit rating agencies recognize these.  We all need to ensure that the Philippines keeps its hard-earned investment grade sovereign credit ratings beyond 2016,” he said.