S and P issues ‘BBB’ rating on PHL’s ROP offering

MANILA-- The Philippine government's US dollar-denominated bond offering has been assigned a 'BBB' rating by S and P Global Ratings Wednesday, the same as the sovereign's rating.

In a statement, the debt rater said its ratings on the country "reflect our assessment of the country's lower middle-income economy and rising uncertainties surrounding the stability, predictability, and accountability of its new government."

"Offsetting these weaknesses is the Philippines' strong external position, which features rising foreign exchange reserves and low and declining external debt," it said.

The credit rater said its rating in the country has a Stable outlook "to reflect our view that a higher rating is unlikely over our two-year ratings horizon."

" We may raise the ratings on the Philippines if continued fiscal improvements under the new administration boost investment and economic growth prospects, or if improvements in the policy environment lead us to a higher assessment of institutional and governance effectiveness."

"We may lower the ratings if, under the new administration, the reform agenda stalls or if there is a reversal of the recent gains in the Philippines'fiscal or external positions," it added.

The Philippine government on Wednesday issued an announcement on the Republic of the Philippines (ROP) bonds sale overseas, part of process of which will be used to swap 14 series of bonds maturing from 2019-2037.

Earlier, National Treasurer Roberto Tan said they plan to issue at least USD500 million worth of global bond, with a new money component.

The last time the Philippines issued ROP was on Feb. 18, 2016, when it issued USD2 billion worth of 25-year bond, USD500 million of which was used to finance government programs while the bulk was used for liability management or to refinance 16 series of bonds, maturing from 2016-37.

Last year's sovereign global bond issuance has a coupon rate of 3.70 percent, the lowest coupon ever issued by the government. (PNA)

Source: Philippines News Agency

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