BANGALORE, India -- Standard & Poor's Ratings Services said it has placed its 'B+' corporate credit rating on Philippine-based conglomerate JG Summit Holdings Inc. on negative watch reflecting near-term challenges of rising input costs, weakening demand in inflationary economic conditions, resulting in pressure on margins.

On the upside, the group continues to derive support from its prominent market position in a diversified portfolio of businesses, ranging from branded foods, low-cost aviation and real estate developments, the ratings agency said.

S&P also placed its 'B+' rating on the $300-million senior unsecured notes issued by the company's unit, JGSH Philippines Ltd., on negative watch.

The negative watch status reflects the large debt financing of the company's $840-million naphtha cracker construction and its interest to acquire a 40-percent stake in Petron Corp. for P25 billion.

"Although the construction of the naphtha cracker would likely be funded via a project finance loan on a non-recourse basis, the incremental debt, when consolidated to the company's financial, would likely place pressure on the ratings on JG Summit," S&P said.

"In our view, these ambitious plans are being pursued when the prospects for the company's business are more dampened," it added.