The company ranks the foreign-currency rating of the Philippines at BB+, one level below investment grade.
“The rating remains on stable outlook. Of course that can change depending on what happens with structural reforms and the economy’s growth path. Management of public finances and monetary policy will remain important.”
From a slower global economy, “there’s an impact via remittance flows. We didn’t really see a shock to remittance flows in the 2009 global recession. If that changes, then that could be a risk for the Philippines. It’s certainly something to watch.
“The much more important parts of the credit profile are particularly the structural reforms to lift the investment rate and raise the growth rate. The Philippines, after all, grows more slowly than Indonesia. We’re not just looking at one year’s numbers, or one quarter’s number, we’re looking for a longer period over the last five years or so.”
At stable outlook, “we’re signaling we don’t see a rating move in the next 18 to 24 months on current trends.”
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