Fitch Ratings decision disappoints PH officials

MANILA, Philippines—The country’s economic managers were left disappointed on Tuesday following Fitch Ratings’ decision to affirm the Philippines sovereign debt rating.

Most officials were batting either for a higher rating or a “positive” outlook from Fitch, which was the first of the three rating agencies to elevate the country to investment grade at around the same time last year.

Earlier this month, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said the Philippines deserved another upgrade, given the government’s continued success in reducing its debt and the economy’s robust dollar revenues.

At a forum Tuesday morning before the news broke, National Treasurer Rosalia de Leon said the Philippines enjoyed risk premiums for its loans that were better than similarly rated peers like Thailand and Indonesia.

She said the country’s debt spreads were closer to that of A-rated countries like Malaysia.

“The best scenario would have been for an upgrade, or at the very least, a revision to a ‘positive’ outlook,” said Emilio Neri Jr., lead economist at Bank of the Philippine Islands, in an interview.

“I think they were being conservative because they wouldn’t want to take back any upgrade if the environment suddenly gets very volatile,” he added.

Fitch on Tuesday announced that it had affirmed its BBB- mark, the firm’s minimum “investment grade” rating, for the country’s long-term foreign- and local currency-denominated debt papers. The outlook was also maintained at “stable,” indicating little chance for a change in the next year and a half.—Paolo G. Montecillo

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