Philippines expects greater demand for its debt paper
The Philippines expects greater demand for its debt paper once it taps the overseas capital market this semester following an upgrade to one notch below investment grade of the country’s credit rating.
The government is considering to sell dollar-denominated bonds to fill in the balance on its overseas borrowing program this year but it is also open on doing a debt swap or issuance of peso-denominated global bond.
“The upgrade will benefit both exercises in terms of investor confidence resulting to greater demand and better pricing,” National Treasurer Roberto Tan told the PNA in a mobile phone message Thursday.
The government has a US$ 2.25 billion foreign borrowing program this year.
Last January, it sold US$ 1.5 billion worth of 25-year global bond due 2037 in an offering that was about eight times oversubscribed.
Tan remains mum on when the government will tap its remaining US$ 750 million programmed borrowing for this year but stressed that they are deeply watching for opportunities.
“Both are being studied by DOF/BTr for the second semester since each exercise pursues priority objectives in our funding and liability management objectives,” he added.
Standard and Poor’s (S&P) upgraded Wednesday the country’s credit ratings to ‘BB+’ with Stable outlook from ‘BB’ after noting the continued improvement in the country’s fiscal flexibility.
It also affirmed the domestic economy’s ‘BB+’ long-term local currency rating, the ‘B’ short-term sovereign credit ratings and the ‘axBBB+’/axA-2′ ASEAN scale ratings.
It, however, changed to ‘BBB-’ from ‘BB+’ the country’s transfer and convertibility assessment (T&C).
Aside from S&P, Fitch Ratings also rates the country a notch away from investment grade at ‘BB+’ with stable outlook.
Moody’s Investors Service is the only major ratings agency that gives the Philippines a rating that is two notches away from investment grade at ‘Ba2.”