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.