DOF: Philippines clearly deserves top rating

The Philippines’ global credit rating is clearly of an investment grade because the country is unlikely to default on its debts, compared with some of the world’s major economies.

Finance Secretary Cesar V. Purisima made this remark during a presentation to investors in Singapore last week.

Purisima, along with National Treasurer Roberto B. Tan, led an economic team that met with officials of banks and investors groups at the city-state on Aug. 21 and 22.

Other members of the team include Bangko Sentral ng Pilipinas Assistant Governor Cyd Tuaño-Amador and Executive Director Claro Fernandez of the BSP’s Investor Relations Office.

The team met with representatives of Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Morgan Stanley and UBS.

The Singapore sortie was a followup to similar meetings held in the United States last June, when the team gave an update on the fiscal and macroeconomic situation of the Philippines and the ongoing reforms under the Aquino administration.

Among the highlights of the Singapore meetings was the status of the Philippines’ sovereign credit ratings.

“Given that the cost of protecting Philippine bonds against default for five years is lower than some investment-grade countries such as Russia, and considering that two out of the three major credit rating agencies rate the country one notch below investment grade, the Philippines can clearly make its case for an investment-grade status,” Purisma said in a statement.

Currently, Standard & Poor’s and Fitch Ratings rate the country at a notch below investment grade.

The other major credit watchdog, Moody’s Investor Services, rates the country at two notches below from the coveted grade.

Much of the optimism around the Philippine economy, Purisima said, stems from the administration’s achievements in fighting corruption, reining in the budget deficit, and upgrading the country’s infrastructure network.

The finance chief said that the reception of investor throughout the presentations was “very positive.”