Major credit rating agencies assigned investment-grade scores to the Philippine government’s proposed issuance of benchmark-size US dollar-denominated senior unsecured notes.
Fitch Ratings assigned a “BBB” rating on it, while S&P Global Ratings gave it a “BBB+” score. Fitch said it was in line with the Philippines’ long-term foreign currency issuer default rating of BBB with a stable outlook. Fitch affirmed the Philippines’ long-term foreign and local currency IDRs on Jan. 10, 2021.
Fitch said the factors that could individually or collectively lead to negative rating action or downgrade would be a sustained rise in the government debt-to-GDP ratio associated, such as a reversal of reforms or departure from a prudent macroeconomic policy framework that leads to sustained higher fiscal deficits.
Factors that could lead to upgrade would be the sustained broadening of the government’s revenue base that enhances fiscal finances and places the government debt/GDP ratio on a downward trajectory; and strengthening of governance standards towards those of the rating-category peer median.