MANILA, Philippines—State-run Small Business Corp., an institution mandated to assist micro, small and medium enterprises, has obtained an “AA minus” rating from local credit watcher Philippine Rating Services Corp.
SBC was given a “PRS Aa-” rating which, based on Philratings’ scale, suggested that the borrower “has a strong capacity to meet its financial commitments relative to that of other Philippine corporations.” A plus or minus qualifies the rating further.
An issuer rating is an opinion on the overall credit-worthiness of the issuer, evaluating an entity’s ability to meet all financial obligations falling due within one year.
In a statement, Philratings said its rating on SBC had considered the government’s supportive regulatory framework for growth and development of the micro-SME sector, as well as SBC’s sustained positive performance in terms of profitability. The rating also took into account uncertainties on the sustainability of an improvement in SBC’s asset quality, with weaker asset quality measures seen for the interim September 2011, in contrast with the noticeable improvement as of the end of 2010.
Under Republic Act 9501, SBC is tasked to play a major role in the development of the country’s SME sector, particularly in the implementation of policies and programs to assist the sector in all areas.
Philratings said SBC was able to sustain its positive profit performance, boosted by the robust performance of its financing programs.
“On the other hand, projections for 2012 show moderate revenue growth, because of the slower rate of increase in net interest income and a decline in investment income,” the statement said.
The statement said SBC’s asset quality had likewise showed notable improvement in 2010, with its past due rate and non-performing assets ratio decreasing from year-ago levels.