Aquino welcomes Philippine credit rating hike

15-Nov-2010 Intellasia | AFP | 7:01 AM

Philippine President Benigno Aquino hailed his country’s sovereign credit upgrade by ratings agency Standard and Poor’s as a sign that the nation was moving out of the economic “doldrums”.

“We’re very delighted because the efforts that we have been trying to do are already being recognised by an agency with international character,” he told reporters late Friday at a summit of Asia-Pacific economies in Yokohama, Japan. Standard and Poor’s said Friday it had raised the Philippines’ sovereign credit rating by a notch to “BB”, citing the country’s improving growth prospects and ability to resist global shocks.

“We would like it (the rating) to go even higher but that is already cause for us to be delighted with the results, we have gotten a level up when we have been in the doldrums for such a long time,” Aquino said.

S&P cited the Philippines’ underlying strength “of its external accounts” as lessening the threats posed by the nation’s high public and external debt, providing a buffer against adverse shifts in trade or investor sentiment.

The agency’s long-term rating on the Philippines’ foreign currency senior unsecured debt was raised to “BB” from “BB-”. The new rating remains two levels below investment-grade.

However, it said the Philippine’s further progress toward investment-grade status was hampered by weak tax collections as well as public and foreign debt, all of which would take time to resolve.

The archipelago nation’s narrow revenue base and rampant tax evasion also remained problems, it said.

Aquino was attending a summit of Asia Pacific Economic Cooperation (Apec) nations.

The Philippine president has vowed a sharp change in leadership style from his predecessor Gloria Arroyo, promising to crack down on corruption, boost revenue collection and build crucial infrastructure.

His government has said it is targeting growth of 7.0-8.0 percent during his time in power.

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