...the PH new Moody's rating

Philippines keeps investment grade score from Moody's


ABS-CBN NEWS
11 October 2019

MANILA - Moody's Investor Service on Friday said it kept its Baa2 rating and with"stable" outlook for the Philippines due to its strong fiscal position and "limited vulnerability" to external risks.

The country's "high" economic strength, "moderate" institutional strength and fiscal strength, and "low" susceptibility to event risks determined the country's credit profile, Moody's said in a statement. 

The Baa rating, one notch above minimum investment grade, is subject to moderate credit risks, according to Moody's rating scale. 

The government's economic and fiscal reforms as well as its "effective monetary policy" contributed to the overall macroeconomic stability and sound financial system, Moody's said. 

"The stable outlook on the Philippines' rating incorporates our view that strong GDP growth relative to rating peers could accelerate even further," Moody's said. 

Economic growth momentum is expected to further recover due to a sound banking system and if higher infrastructure investment is achieved, the statement said.

Moody's estimates that the country's gross domestic product could grow 5.8 percent in 2019, slower than the government target of 6 to 7 percent due to the budget delay early this year.

A modest rebound is expected next year, with an estimated GDP growth of 6.2 percent as the government's catch-up spending "spills" over to 2020. 

Climate change risks, however, can have an impact on the country's sovereign profile due to climate-related disasters, the statement said.

• The World Bank on Thursday said the country's GDP could also grow 5.8 percent this year, missing the lower end of its target due to the budget delay and the public spending ban imposed before the mid-term elections in May.

...the continous PH economic growth

Fitch keeps PH growth projection at 6.1%


Mayvelin U. Caraballo
Manila Times
11 September 2019


FITCH Ratings has maintained its 6.1-percent growth forecast for the Philippine economy this year as it expects it to bounce back in the second half.

Workers are busy at a construction site in Quezon City. PHOTO BY RUY MARTINEZ

In a report released on Tuesday, the global credit ratings agency said the figure kept the country among “the fastest-growing economies” in the Asia-Pacific region.

The projected figure falls within the government’s downwardly revised 6- to 7-percent gross domestic product (GDP) growth target range.

Fitch also said it “expects growth to improve in 2H19 [second half of 2019] following a weak first half. Growth was weighed down by the delay in budget implementation and a weak external environment.”
The government earlier reported that the country’s GDP expansion slowed to 5.5 percent in the second quarter, bringing growth in the first half of the year to 5.5 percent.

A dispute between the Senate and the House of Representatives over alleged insertions resulted in the four-and-a-half-month delay in the passage of this year’s budget. This forced the government to run on last year’s outlay, limiting it to spend for items detailed in the 2018 appropriations and not on programs and projects supposed to be implemented this year.

Fitch also believes that the tight monetary policy and slowing growth momentum last year “have lowered overheating risks” for the economy.

The Bangko Sentral ng Pilipinas implemented a cumulative rate hikes of 175 basis last year, when the country’s economic growth slowed to 6.2 percent from 6.7 percent in 2017.

On the country’s average inflation rate, the debt watcher expects it to slow to 3.1 percent this year from 5.2 percent in 2018.

Its inflation forecast fell within the 2- to 4-percent official target range of the government, but was higher than the 2.6-percent forecast of the central bank.

Year-to-date average inflation rate now stands at 3.0 percent following the three-year-low 1.7-percent print in August.

...the strong Asian economy

PH still among strongest Asia economies in '19: Fitch


Joann Villanueva
pna.gov.ph
10 September 2019

MANILA -- Fitch Ratings is confident that the Philippine economy will remain among the strongest in the region this year with a growth of 6.1 percent as recovery is seen in the second half of the year.

In a report on the APAC Sovereign Credit Review for the third quarter, the debt rater said the country, which has an investment grade rating of 'BBB' with Stable outlook, Fitch Ratings said the below-target output in the first half of the year is projected to improve in the remaining quarters.

"The agency is maintaining its full-year 2019 growth forecast of 6.1 percent, continuing to place the Philippines among the region's fastest growing economies," it said Tuesday.

In the first half of the year, growth, as measured by gross domestic product (GDP) expanded by an average of 5.5 percent, lower than the government's 6 to 7 percent full year target.

The weak output was attributed to the impact of the delay in the approval of this year's national budget and the weak external environment.

The negative external front is seen to hamper domestic expansion in the next two years, with growth projected to be around 6.3 percent.

Fitch Ratings also noted that overheating risks have subsided after the total of 175 basis points increase in the Bangko Sentral ng Pilipinas' (BSP) key policy rates last year.

The rate hikes were done to help manage inflation expectations since inflation was on the rise due to supply-side factors.

Inflation peaked at 6.7 percent in September and October last year, exceeding the government's 2 to 4 percent target band.

Since then, inflation has decelerated and slowed to 1.7 percent last August.

Fitch Ratings projects inflation to average at 3.1 percent this year, within the government's 2 to 4 percent target band until 2021. (PNA)