No. 06.18.13 No. 2112 10.30.2008
PHL, first sovereign rising star this 2013 International credit rating firm Standard & Poor’s (S&P) named the Philippines as the "First Sovereign Rising Star of 2013," for becoming the first country to convince investors that it is a safe investments haven. This after S&P upgraded the country from speculative to investment grade. S&P’s speculative grade ranges from ‘D’ to ‘BB+’, while an investment grade, from ‘BB-‘ to ‘AAA’. The country has surpassed Barbados, Croatia, Indonesia, Romania, and Turkey, which all have the BB+ rating, just a notch below the minimum investment grade.
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Aside from the Philippines, 13 other bond issuers were also upgraded to the investment grade for the first time. However, these 13 new bond issuers are corporate bodies.
“The upgrade reflects the Philippines’ strengthening external profile, the moderating inflation, and the government’s declining reliance on foreign currency debt,” S&P stated in its report titled “The Philippines Is the First Sovereign Rising Star of 2013.” The increasing foreign exchange inflows from migrant workers' remittances, foreign investments in the business process outsourcing (BPO) sector, and foreign investments in peso-denominated stocks and bonds played a huge role for the upgrade. The country has received three credit rating upgrades from credit watchdogs namely Fitch, S&P, and Japan Credit Rating Agency Ltd. (JCR). It is expecting a similar upgrade from Moody’s, another major credit rating agency. Meanwhile, the National Competitiveness Council (NCC) reported that the Philippines jumped five places in the latest World Competitiveness Yearbook (WCY). “Overall, the Philippines is moving in the right direction and its improved rankings in growth rates are a reflection of this. Since we still lag in actual levels of performance across a number of key fronts (e.g., investments, trade, and others), it is absolutely critical for us to maintain momentum and a pace of improvement that is faster than that of our major competitors. We are confident that the pace will continue to pick up.,” NCC Co-Chairman Guillermo Luz said.