Philippines gets first investment grade ever

MANILA - The Associated Press

Credit rating agency Fitch Ratings has given the Philippines its first-ever investment grade, allowing the Southeast Asian nation greater access to low-cost funds.

The agency said it has upgraded the Philippines’ long-term, foreign currency-denominated debt to BBB minus from BB plus and long-term local currency-denominated debt to BBB from BBB minus . The outlooks on both ratings are stable. Fitch cited March 27 that the Philippines’ strong sovereign external balance and persistent current account surplus. The economy has expanded 6.6 percent in 2012 and Fitch expects 5.5 percent growth this year.

President Benigno Aquino III said the upgrade would lower interest on debt and increase investments. He said it was an affirmation of his good governance agenda and economic reform.

“More companies in the real economy can now consider us an investment destination,” Aquino said, adding that an investment grade for sovereign debt should lead to lower borrowing costs for Philippine companies in international markets.

The Philippines still lags behind Southeast Asian neighbors in foreign direct investment, and foreign chambers of commerce have cited restrictions such as a constitutional ban on foreigners owning more than 40 percent of key industries.