Fitch can at least revise outlook to positive -- Palace
BusinessWorld Online
April 5, 2011
MALACAÑANG is hopeful that Fitch Ratings will issue an upgrade for the Philippines or at least change its outlook to positive following a review of the country’s fiscal situation.
"It’s reasonable to expect a positive outlook," Sec. Ricky A. Carandang of the Presidential Communications Development and Strategic Planning Office said.
"[T]he fiscal prudence, the improvements in tax collections ... based on that alone ... I would think that there would be reason for an upgrade, or at least the outlook," he added.
President Benigno S.C. Aquino III earlier in the day declined to comment extensively on the country’s ratings prospects. He did say, however, that "a very good development" could be announced "by next week".
A Fitch team visited Manila last week for talks with economic managers, central bankers, revenue officials and private sector representatives as part of a ratings review. Ahead of the visit, officials said they were optimistic that Fitch would revise its current ‘BB’ rating, with a stable outlook, for the Philippines.
Finance officials last week said the Fitch team had raised concerns about the government’s revenue assumptions. Yesterday, Mr. Carandang said prudent spending would continue to allow the government to achieve fiscal consolidation.
"The main concern of the credit ratings agencies has always been the sustainability of the fiscal gains and we can see that the prudence in spending is not something that’s one-off. Every month, we’re seeing that," he said.
"[A]s far as fiscal management is concerned, we’ve shown concrete, sustainable improvements," he claimed.
"If you judge it based on solely internal performance, then I think there would be reason to be optimistic. But then you do not know what the impact will be fiscally of all of these things happening outside. That would probably factor into Fitch’s decision as well."
"[T]he fiscal prudence, the improvements in tax collections ... based on that alone ... I would think that there would be reason for an upgrade, or at least the outlook," he added.
President Benigno S.C. Aquino III earlier in the day declined to comment extensively on the country’s ratings prospects. He did say, however, that "a very good development" could be announced "by next week".
A Fitch team visited Manila last week for talks with economic managers, central bankers, revenue officials and private sector representatives as part of a ratings review. Ahead of the visit, officials said they were optimistic that Fitch would revise its current ‘BB’ rating, with a stable outlook, for the Philippines.
Finance officials last week said the Fitch team had raised concerns about the government’s revenue assumptions. Yesterday, Mr. Carandang said prudent spending would continue to allow the government to achieve fiscal consolidation.
"The main concern of the credit ratings agencies has always been the sustainability of the fiscal gains and we can see that the prudence in spending is not something that’s one-off. Every month, we’re seeing that," he said.
"[A]s far as fiscal management is concerned, we’ve shown concrete, sustainable improvements," he claimed.
"If you judge it based on solely internal performance, then I think there would be reason to be optimistic. But then you do not know what the impact will be fiscally of all of these things happening outside. That would probably factor into Fitch’s decision as well."
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