Malaysian credit rater upgrades Philippines

MANILA, Philippines - RAM Ratings, a credit watchdog based in Malaysia, has upgraded the regional credit rating of the Philippines as it cited the country’s ability to withstand global headwinds.

The Philippines’ Southeast Asian credit rating was lifted by a notch to A1, which is five steps above the minimum investment grade.

The new regional rating carries a “stable” outlook, which indicates likelihood it will stay the same over the short term.

The regional, or Southeast Asian rating takes into account a country’s performance vis-a-vis other sovereigns in the region.

Meantime, RAM Ratings affirmed the Philippines global credit rating at BBB3, which is the minimum investment grade.

Global credit rating refers to the score that takes into account a country’s performance vis-a-vis other sovereigns worldwide that is covered by RAM Ratings.

The global credit rating of the Philippines is likewise assigned a “stable” outlook.

In a report released last week, RAM Ratings said the upgrade in the Southeast Asian rating of the Philippines reflected its “ability to withstand external volatilities that compares favorably to ASEAN peers.”

“Despite a slower pace of growth in workers’ cash remittances, domestic private consumption expanded further. The country also weathered a bout of financial volatility in 2015 relatively well,” RAM Ratings said.

The Philippines’ resilience to challenges posed by the external environment is offen credited to its strong fundamentals, including low inflation, ample foreign exhange reserves, stable banking system, and manageable government debt.

Strong domestic consumption and rising domestic investments likewise help boost economic growth even as exports remain anemic due to weak global demand.

The Philippine economy, measured in terms of gross domestic product, grew seven percent in the second quarter and by an average of 6.9 percent in the first half of 2016, thus remainaining one of the fastest growing economies in Asia and the world.