The Philippine economy can manage the recent volatility of the financial market thanks to its strong fundamentals – buoyed by remittances and earnings from exports and business process outsourcing (BPO) firms – according to global credit watchers Standard & Poor’s (S&P) Ratings Services and Fitch Ratings.
According to the two financial service companies, the Philippines will not only remain afloat despite the sentiment-led market turbulence, its credit rating will remain unaffected by the volatility. Both S&P Ratings Services and Fitch Ratings granted the Philippines investment-grade status earlier in 2013.
S&P credit analyst Agost Benard added, in an interview published in broadsheet the Philippine Star, “Our outlook for the Philippines is stable.”
Fitch, on the other hand, said that the country is in a good position to remain resilient despite the sell-off caused primarily by concerns that the United States would cut back on and eventually remove its stimulus measures.
Fitch Ratings head of Asia-Pacific Sovereigns Andrew Colquhoun added that the Philippines has been posting a large current account surplus for about a decade now. The account surplus, which helps raise enough dollars to meet external obligations, stands at $3.4 billion as of March. This current account includes remittances, export revenues, and earnings from BPO firms.
In March of this year, the Philippines earned its first investment grade rating for credit worthiness -BBB-, with a stable outlook – from Fitch. Two months later, S&P also raised the country’s investment grade rating.
