S&P to give PHL its second investment grade rating — FMIC and UA&P

The Philippines will likely get its second investment grade rating in the next three months, according to the latest research note by First Metro Investments Corporation and the University of Asia and the Pacific. This time it will come from global debt-watcher Standard & Poor's (S&P), which would basically upgrade the Philippines' creditworthiness from its own rating of one notch below investment grade to investment grade, and affirming the March 27 upgrade given by Fitch Ratings. “We expect S&P to affirm the investment grade rating in the next three months,” FMIC and UA&P noted in the latest “Market Call” released late Tuesday. S&P and Moody's Investors Service still rates the Philippines a notch below investment grade. An investment grade rating lowers the borrowing costs of the government and homegrown corporations, making more funds available for investments. It also stokes investor confidence in a country as it underpins strong macroeconomic fundamentals and capacity to pay-off debts. FMIC and UA&P said some investors are still waiting for another global debt watcher to upgrade the Philippines and confirm that it has become the new investment hub. “Investors are expected to have a wait-and-see attitude in the coming months as they seek confirmation from Moody’s and S&P,” read the report. “Hopes are high for the rest of the credit rating agencies, Moody’s and S&P, to follow Fitch’s move to solidify the country’s grounding as an investment hot spot,” the report read. The report noted a second investment grade rating may result in higher flows of speculative investments, which will further strengthen the peso. — Siegfrid Alegado/VS/TJD, GMA News