by: Karen Cayamanda
Friday, May 3, 2013 | Outsourcing News |
After getting the first-ever investment grade status from credit rating agency Fitch Ratings last month, the Philippines now has its second investment grade rating, this time from debt watcher Standard & Poor’s. From BB+ with a positive outlook, S&P awarded the country with a BBB- with a stable outlook.
In a statement, S&P Credit Analyst Agost Bernard said the Philippines’ recent upgrade shows that the country is becoming less reliant on foreign currency debt, is able to control inflation, and has a much better external profile. This can be attributed to the previous and present administrations that have improved the fiscal flexibility and capital markets of the country. Bernard added that the improvement in inflation environment, as well as currency appreciation, likewise contributed in this latest investment grade rating.
Things may be going well for the Philippine economy, but S&P noted that there is a need for more infrastructure projects, and current restrictions on foreign ownership can have an impact to economic growth. Also, the current rating may be lowered if the country is not able to effectively manage the investment flow as a result of better investor confidence and if the country shows significant decline in external performance.
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