There are two good reasons why the Philippines will likely get an investment grade credit rating in early 2013, a monetary official said
The Philippines may get an investment grade by early 2013, according to projection by.
One is the country's sound macroeconomic fundamentals and positive perception by the international capital market, economist and Monetary Board member Felipe Medalla told a convention of Thrift banks, where he was the keynote speaker.
"We should be getting an investment grade, hopefully early next year," Medalla said.
The other reason is interest rates.
Philippine bonds carry lower yields than bonds of peers with similar credit ratings, an indication that credit rating agencies are behind the international capital markets in assessing the country's creditworthiness, Medalla said.
Philippine foreign exchange reserves reached a record of over $80 million as of end-August, the economist noted, saying that level of reserves gives Bangko Sentral the flexibility to cushion the impact of capital flight by foreign investors fleeing from emerging markets.
Bangko Sentral could also used its reserves to shield the peso from sharp declines, thus keeping the foreign exchange stable if need be. "The Philippines is practically invulnerable to capital flow reversals," Medalla said.
Moody's Investor Service has given the Philippines a credit rating of two notches below investment grade, while Fitch Ratings and Standard & Poor's assessed the country's creditworthiness just a notch under investment grade
Philippines Economy 2012 Remains Strong
International credit watcher Standard & Poor's raised its growth forecast for the Philippines for 2012, even as it downgraded its outlook for other economies in Asia and the Pacific, saying the country has the capability to withstand unfavorable developments in the global economy.
In its latest report titled "Asia Pacific Feels the Pressure of Ongoing Global Economic Uncertainty," S&P said it now expected the Philippine economy to expand by 4.9 percent, instead of the earlier projection of 4.3 percent, this year.
On the contrary, the credit-rating firm lowered its growth projections for several economies and kept its previous forecasts for a few others in the region to take into account the impact of the prolonged debt crisis in the eurozone, the still lackluster growth of the United States and the slowdown of China and India.
S&P said the unfavorable developments in the world's biggest economies were expected to dampen growth of many Asia-Pacific countries, except for the Philippines.
More HongKongers Tourists Arrive Visayas for Travel Restriction in Manila
In spite of the updated black travel advisory of the Hong Kong Security Bureau on the Philippines, an official from the Department of Tourism (DoT) yesterday said that the tourism industry has already bounced back from the restriction and expects an even bigger growth rate from the Hong Kong market by the end of the year.
"We are happy to report that visitor arrivals from Hong Kong from January to July, 2012, reached 67,844 representing a growth rate of 1.71 percent," said Assistant Secretary for International Promotions Benito Bengzon Jr.
According to Bengzon, the alert issued two years ago is still in place but the DoT continues with its marketing and promotions program for the Hong Kong outbound travel market.
The Hong Kong Special Administration Region's black travel advisory is a warning to its citizens to avoid all travel to a country placed under the category.
The Hong Kong Security Bureau updated its black travel advisory to the Philippines underlining the risk of possible terrorist attacks.
"Serious hostage-taking incident happened in Manila on August 23, 2010. Residents should avoid all travel to the country; those who are already there should attend to personal safety and exercise caution," the advisory said.
The black travel advisory was issued after the August 23 hostage-taking incident in front of the Quirino Grandstand where a dismissed police officer hijacked a bus full of Hong Kong tourists.
Live Trading News, GMA News, Manila Bulletin
Written by Makisig Bayani
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