Japan credit rating agency upgrades Philippines’ rating

MANILA - Japan-based R&I has upgraded the Philippine credit rating as it sees consistent rise in percapita income in the country as a result of immense growth in infrastructure investments and continuity of reforms.

Philippine officials welcomed R&I’s move, raising the country’s long-term foreign-currency issuer rating by a notch from the minimum investment grade of BBB- to BBB. The rating was assigned a “stable” outlook, which means it is unlikely to change within a year. At the same time, the credit watchdog maintained the country’s short-term debt rating at a-2, which indicates high certainty that short-term financial obligations would be paid.

“The Philippines’ economy continues to show strong growth, thanks to brisk investment coupled with private consumption driven by remittances from overseas Filipinos,” R&I said in a report released Wednesday.

“This should allow for relatively high growth and raise per-capita income levels steadily,” it stressed.

Per-capita income in the Philippines has been modest compared with those of more advanced neighbors, but the country is catching up in this area. From $3,684 in 2009, per capita income in the country (using current prices and purchasing power parity) increased to $4,649 last year. R&I recognized the country’s healthy fiscal situation, saying this helps fulfill the plan of boosting public spending.

R&I also said the rollout of more projects under the Public-Private Partnership (PPP) program would help drive more job-generating investments and sustain the rise in incomes.

R&I also recognized the country’s sound macroeconomic fundamentals, including ample foreign-exchange reserves, improving manageability of government debt, and within-target inflation. (SDR/SUNNEX)