Credit rating agency Standard & Poor’s has raised the Philippines debt rating to the highest level since 2003, the news reports said. This takes President Benigno Aquino nearer to his objective of attaining investment grade and spurring gains in the bonds and the peso.
The nation’s long-term foreign currency-denominated debt was raised one level to BB+ from BB, the credit rating agency said in a statement . This is one step below the investment grade and on a part with neighboring Indonesia. The outlook on the rating is stable.
Agost Bernard, a Singapore-based analyst at Standard & Poor’s said, “The rating action also reflects the country’s strengthening external position, with remittances and an expanding service export sector continuing to drive the current account-surplus.”
The yield on the 5.875% peso bonds due March 2032 fell 7 basis points to 5.78%, the lowest since March 16, as per the Traditional Financial Services.
S&P’s recognition of the nation’s strong external position, growth aspects and improving fiscal sector adds fundamental support to the market.
Moody’s Investor Service boosted its outlook on the Philippines to positive in May, citing the improved debt levels. Fitch Ratings also raised the country’s debt to one step below the investment grade in June 2011.
S&P is an American financial services company. It is a division of McGraw- Hill Companies that publishes financial research and analysis on stocks and bonds.