MANILA, Philippines - South Korean credit rating agency, NICE Investors Service Co. Ltd., assigned a positive outlook to the Philippines' BB+ rating.
NICE Investors Service lifted the outlook on the Philippines "BB+" long-term foreign currency rating and the "BBB-" long-term local currency rating to positive from stable.
In raising the outlook on the Philippines' rating, NICE cited the following reasons: increasing tax revenue collection; enactment of the sin tax law and implementation of other fiscal reform; improving business environment to attract more investments, stable inflation, robust services and consumption sectors that support growth, sound bank lending practices, improving debt profile, and healthy external payments position.
In a statement, the Investor Relations Office says a change in rating outlook, from stable to positive, provides a signal to the market that the likely direction is towards an upgrade in the next 6 to 12 months.
Philippine officials welcomed the positive credit rating action by the South Korean agency.
"This positive rating action from an Asian-based credit rating agency confirms the strong credit story of the Philippines. This action of NICE Investors Service will help the Philippines in the Korean market and its investors, especially in projecting the improvements in the economy as well as in governance," Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said in a statement.
Finance Secretary Cesar Purisima said the formal recognition of the Philippines' investment grade status by credit ratings agencies is "imminent."
"We have always been confident that good governance will lead to good economics and this positive ratings action is a recognition of our commitment to removing the country's constraints to growth. The market already prices our debt as it would a much higher-rated country, and I believe formal recognition of our investment grade status by the credit ratings agencies is imminent," he said.
The Aquino administration has already earned 11 positive credit rating actions since President Benigno Aquino assumed office in June 2010.
It is widely expected that the Philippines will receive its first investment grade credit rating this year.
At present, the Philippines is rated at one notch below investment grade by the following agencies: Standard and Poors (BB+/Positive); Moody’s (Ba1/Stable); and Fitch Ratings (BB+/stable).