Fitch upgrades Philippines’ credit rating Firm cites improving gov’t fiscal position By: Michelle V. Remo and Ronnel W. Domingo Philippine Daily Inquirer The Philippines enjoyed another boost to its international image as Fitch Ratings upgraded the country’s credit rating to just a notch below investment grade.With the decision, the Philippines’ credit rating on its long-term foreign obligations now stands at BB+, an improvement from the previous BB. “The upgrade reflects progress on fiscal consolidation against a track record of macro stability, broadly favorable economic prospects and strengthening external finances,” Andrew Colquhoun, head of Fitch’s Asia-Pacific sovereigns, said in a statement. According to Fitch’s projections, the Philippine government’s budget deficit for 2011 would stand at 3 percent of the country’s gross domestic product, an improvement from the 3.7 percent registered last year. Fitch said the country was on track in meeting its medium-term fiscal development goals, citing recent improvements in revenue collection by the government. Revenue collection grew 18 percent in the first four months from the same period a year ago, it noted. The credit-rating firm said that should revenue collection growth continue, the county was well poised to reduce its overall debts over the medium term. The country’s debts stood at 57 percent of its GDP in end-2009, but Fitch said there was a chance the figure could decline to 50 percent by end-2013. The upgrade by Fitch of the country’s credit rating came after Moodys raised the country’s credit rating to two notches below investment grade earlier this month. The favorable credit actions came following pronouncements by the country’s finance and monetary officials that upgrades were overdue as they cited better economic figures for the country. Finance Secretary Cesar V. Purisima said the government would strive to attain its goal of investment grade-credit rating “at the soonest time possible.” “The Fitch upgrade is the fourth positive ratings action in the 11 months of the Aquino administration and is unprecedented in Philippine history,” Purisima said. The finance chief said Fitch’s move was another “objective vote of confidence” that the Philippines was headed in the right direction. “There will be no letup in our campaign to prosecute, convict and jail tax evaders and smugglers,” Purisima added. “We will work doubly hard to ensure that the investment-grade rating comes sooner rather than later.” “The Philippines’ strengthening credit profile continues to be internationally recognized by both markets and the rating agencies. Today’s upgrade from Fitch Ratings brings the Philippines one notch closer to investment grade status and is a clear acknowledgement of the country’s improving macroeconomic fundamentals,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said. |
U.S. Stocks Decline on European Woes as Jobless Claims Increase U.S. stocks slumped, sending the Standard & Poor’s 500 Index down a second day, as concern grew that Europe’s debt crisis will hurt banks and an increase in jobless claims added to signs the economy is slowing.JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) fell at least 1.2 percent as European Central Bank President Jean-Claude Trichet said the debt crisis threatens to infect banks. Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM) dropped more than 1.6 percent as oil erased its gains for the year. Stocks pared losses as Greece had reached an agreement with the European Union and International Monetary Fund regarding an austerity plan that would help it win more financial aid. The S&P 500 declined 0.3 percent to 1,283.50 at 4 p.m. in New York. It has gained 2.1 percent so far in 2011. The Dow Jones Industrial Average retreated 59.67 points, or 0.5 percent, to 12,050. It’s up 4.1 percent this year. Treasury Two-Year Yields Drop to Lowest in 2011 on Jobless Claims, Greece Treasuries rose, pushing two-year yields to almost a record low, as unemployment claims climbed last week more than forecast and on concern Greece will struggle to pass austerity measures. Yields on 10-year notes dropped the most in a week a day after the Federal Reserve said it will maintain monetary stimulus after its $600 billion program of debt buying ends this month, with policy makers lowering forecasts for growth. The $7 billion auction of 30-year inflation-indexed debt drew a lower yield than dealers forecast. “It can all be boiled down to uncertainty,” said Michael Pond, co-head of interest-rate strategy in New York at Barclays Plc, one of the 20 primary dealers obligated to participate in U.S. debt offerings. “The data came in weaker than expected. There continue to be concerns over Greece.” Yields on two-year notes fell three basis points, or 0.03 percentage point, to 0.35 percent at 5:08 p.m. in New York, according to Bloomberg Bond Trader prices. The 0.5 percent security maturing in May 2013 increased 2/32, or 63 cents per $1,000 face amount, to 100 9/32. The yields touched 0.33 percent, the lowest level since Nov. 5. The day before that, they fell to a record low 0.3118 percent. Benchmark 10-year note yields dropped seven basis points to 2.91 percent after falling 10 basis points, the most on an intraday basis since June 15. |
Oil Rises on Concern IEA Crude Release May Limit Future Supply Responses Oil rose in New York, reversing yesterday’s plunge, on concerns that stockpile releases by consuming nations may limit the ability to respond to supply disruptions in future.Crude climbed as much as 1.5 percent today after sliding 4.6 percent yesterday. The International Energy Agency agreed to release 60 million barrels to buyers. Oil stockpiles among the 28 member countries of the IEA declined by 340,000 barrels a day during the first quarter of this year, the Agency said in its monthly Oil Market Report on June 16. “The more stocks you use now, the less of a buffer you have for any supply shock in the future,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter. Crude for August delivery climbed as much as $1.32, or 1.5 percent, to $92.34 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.89 at 7:53 a.m. Singapore time. The contract yesterday slid to $91.02 a barrel, the lowest settlement since Feb. 18. Prices are up 20 percent the past year. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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