MANILA, Philippines ? The Philippines is vulnerable to the global financial crisis but less so than other countries in the region, as its banks and external financial position are sound, the London-based credit watchdog group Fitch Ratings said Wednesday.

Speaking to Reuters before the government launched an offer for an international bond, James McCormack, managing director of Asia-Pacific sovereign ratings at Fitch, said he saw no reason to change the country's ?BB? credit rating and ?stable? outlook.

"We are comfortable with the rating where it is," he told Reuters in an interview.

He said the country's healthy fundamentals should help keep its ratings outlook from being downgraded, but added that slow growth in government revenues posed a risk.

"It looks to us that when we cast our eyes around the region, at economies that are vulnerable to what is going on internationally, the Philippines is certainly included but it is not one of the countries that we are most concerned about," he said.

"The banking sector is reasonably isolated from what's been going on internationally, that includes both exposure to subprime and other assets with questionable values."

On Wednesday, the Philippines, one of Asia's largest sovereign debt issuers, launched a 10-year dollar bond offer, which one banker said could be for as much as $1.5 billion.

The fundraising is to help finance a budget deficit of up to P102 billion this year, compared with a target limit of P75 billion in 2008.

The government relies heavily on foreign and local borrowings to finance its capital and social spending program because revenues growth has not kept pace with the state's funding needs.

It imposed a higher and broader sales tax law in 2005 to rein in a ballooning budget deficit but it has had little success in curbing widespread tax evasion, smuggling, and corruption.

The government has resorted to selling state assets to offset perennially weak revenues.

"The fiscal correction that has taken place over the past few years has been very impressive, it's been quite notable. Deficit has come down, debt levels have come down, very disciplined approach on the fiscal side," McCormack said.

"But, we don't think it's necessarily sustainable because the way that the fiscal deficit has been brought down in the Philippines is mostly by curtailing expenditure.

"The problem in our view is on the revenue side and the revenue numbers for the Philippines are just too low and they are among the lowest of any country that we look at globally."

President Gloria Macapagal-Arroyo made ending a decade of budget deficits the centerpiece of her economic reform. But she abandoned the goal to allow more spending in support of an economy expected to slow down sharply.

Manila hopes more spending will ensure the economy expands by 3.7-4.7 percent in 2009.

McCormack said the government forecast was "too optimistic" and he expected slower growth of about 2.5 percent.

"It is quite weaker than the government's estimate but again when we compare that to other countries in the region that is not a bad growth rate."