Filipinos in South Korea

Fitch upgrade the Credit Rating of the Philippines first time in 8 years since 2003

Since year 2003; the Fitch credit rating agency lagged their grade upgrade to the Philippines. For the first time in eight years, global rating agency Fitch Ratings has raised the grade of Philippines long-term debt, lauding the Aquino administration for "broadly disciplined fiscal management" of the budget deficit, revenue collection and monetary policy.

Fitch stamped a “BB+" on Philippine long-term foreign currency debt and “BBB-“on long-term peso debts. It also maintained at “B" the short-term foreign currency issuer default rating.

"The upgrade reflects progress on fiscal consolidation against a track record of macro stability, broadly favorable economic prospects and strengthening external finances," said Andrew Colquhoun, head of Fitch's Asia-Pacific Sovereigns team.

The BSP said the rating hike is record-setting. "The Fitch upgrade by one notch is very significant in that Fitch rating has been unchanged in the last eight years notwithstanding the remarkable strides in the economy during the same period," Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said in a text message.

Fitch noted the improvement of the budget deficit level to 3 percent of GDP in 2011, down from 3.7 percent in 2010. Also cited was the 18 percent revenue growth in the first four months of 2011, against a nominal GDP growth of 9.3 percent.

The credit rating agency also praised the BSP for sustaining its "track record of delivering effective monetary policy management" as inflation stayed below 5 percent because of its recent policy decisions.

The Bangko Sentral ng Pilipinas (BSP) policy board has opted to keep interest rates at present levels, but reduced inflation pressures by raising the reserve requirement of banks by one percentage point.

“In deciding to maintain policy rates, the Monetary Board noted that the latest baseline forecasts show a lower path and that inflation expectations have shown signs of leveling off," the BSP said.

The BSP decided to use another policy tool at its disposal to head off a possible increase in liquidity levels. It raised to 9 percent from 8 percent the regular reserve requirement on bank deposits and deposit substitutes. The level of liquidity reserves for banks stays at 11 percent.

“The Monetary Board believes that expectations of continued strong capital inflows driven by positive market sentiment over the favorable prospects for the Philippine economy could fuel domestic liquidity growth and contribute to inflation risks," the BSP explained.

Banks and non-banks with quasi-banking functions must comply with the new reserve requirement starting Friday, June 24. Reserve requirements are the chunk of funds in the form of bank deposits and deposit substitute liabilities that banks may not lend because these must be kept on hand or in deposits with the BSP.

The required reserves consist of regular or statutory reserves and liquidity reserves.

The BSP said the adjustment in the reserve requirement is part of the “normalization of liquidity-enhancing measures adopted during the global financial crisis." BSP officials hinted of eventually raising the reserve requirement to levels way back in January 2010.

 

 

I am among of the writers and administrators of this web site. I always on the heads up when it comes to Sports, Politics, Economy, Business, Physics, Mathematics, Technology, computers and NEWS all over the world that triggers ny eyes and interests. I am working as a volunteer with other 14 administrators, researchers, writers and contributors. We are a strong solid team. Join us and be among of the contributor with your name on each posted article.

Related Posts

0 comments:

Post a Comment

Thank you for leaving comment!. We encourage responsible and peaceful comments that add dimension our discussion. No Profanity , No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

Investment Recommendation: Bitcoin Investments

Live trading with Bitcoin through ETORO Trading platform would allow you to grow your $100 to $1,000 Dollars or more in just a day. Just learn how to trade and enjoy the windfall of profits. Take note, Bitcoin is more expensive than Gold now.


Where to buy Bitcoins?

For Philippine customers: You could buy Bitcoin Online at Coins.ph
For outside the Philippines customers  may buy Bitcoins online at Coinbase.com