S&P raises Philippine rating

S&P raises Philippine rating

MANILA (AFP): U.S. credit rating agency Standard and Poor's
Friday raised the Philippines' sovereign long-term foreign
currency debt rating to "BB plus," from "BB," and said the
outlook was positive.

The upgrade, which covers US$4.4 billion of sovereign
obligations, reflects improvements in public finances, a rapidly
diminishing foreign debt burden, and increasingly favorable
prospects for output and exports, the agency said in a statement.

Two of the country's largest firms -- Philippine Long Distance
Telephone Co. (PLDT) and the state-run National Power Corp. (NPC)
-- also clinched long-term foreign currency debt upgrades both
from "BB" to "BB plus" as a result of the improved Philippine
sovereign rating.

Standard and Poor's said the Philippines' sovereign ratings
"remain constrained by the challenge of broadening the public
sector's revenue base," and that further upgrades were contingent
on the passage in Congress of the remaining portions of a
comprehensive tax reform package.

Aides of President Fidel Ramos, who wants the country to
obtain an investment-grade rating before his term ends on June
30, 1998, said earlier this week that Congress aimed to pass
these components by May 1.

They include the simplification of the individual income tax
structure and amendments to the corporate tax which would plug
loopholes blamed for low collection rates.
The sovereign peso-denominated debts of about 10.7 billion
dollars also received an upgrade to "A minus" long term and "A-1"
short term from "BBB plus" and "A-2" respectively, the US agency
said.

The Central Bank of the Philippines' long-term, foreign
currency and local currency credit rating were also raised to "BB
plus" and "A minus," respectively, in accordance with the
sovereign upgrade.