Philippines on track for investment grade rating

The Philippines’ chances of getting another credit-rating upgrade toward investment status remain intact even with the recent cuts in the ratings of nine economies in the eurozone.

This was according to Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., who said that, although events in Europe influence the performance of the Philippine economy through various channels, the impact of their problems in terms of the country’s credit standing is almost nil.

“I don’t think that [eurozone’s woes] will impact our own credit standing,” Tetangco told reporters Wednesday. He said the creditworthiness of the Philippines is improving despite problems of major Western economies.

Last Friday, Standard & Poor’s cut the credit ratings of nine countries in the eurozone amid the prolonged debt crisis in the region. The move stripped France and Austria of their long-held AAA credit ratings.

The seven other countries that were downgraded were Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia.

The downgrade of the ratings of these countries came amid expectations that the debt crisis in the eurozone would likely persist through 2012 as the region has yet to unveil a firm plan toward resolving the turmoil.

Economists said the debt woes in the West may have dampening effects on the Philippine economy. This is because the eurozone serves as one of the biggest export markets, is host to many overseas Filipino workers, and is a source of foreign direct investments and official development assistance.

Meanwhile, BSP Deputy Governor Diwa Guinigundo said the ongoing impeachment trial of Chief Justice Renato Corona should not affect the Philippines’ chances of improving its credit rating as long as economic targets will continue to be pursued.

He said the government should simply not lose focus on accelerating economic growth by boosting public spending, regardless of developments on the political front.—Michelle V. Remo