Moody's may cut Philippine rating

Moody's may cut Philippine rating

MANILA: The Philippines' credit rating may be cut by Moody's
Investors Service on concern President Gloria Arroyo will fail to
get lawmakers to pass tax increases needed to narrow the nation's
budget deficit.

The ratings are on review for possible downgrade "due to
concerns over the sustainability of the government's fiscal and
debt positions," the company said in a statement released in Hong
Kong. Moody's foreign- and local-currency ratings for the
Philippines are Ba2, two levels below investment grade and on a
par with Fiji and Bulgaria.

Arroyo is seeking to end a run of deficits since 1998 that
bloated national debt to 3.54 trillion pesos (US$63 billion) in
June, 19 percent higher than a year earlier. Credit rating cuts
have made it more expensive for the government to borrow and
caused the peso to slump, making it harder to meet debt payments.
-- Bloomberg