Investment Bank Nomura Singapore Ltd: PH to Get Investment Grade in 2013
The Philippines could notch its first-ever investment grade status this year on the back of strong economic fundamentals that could also mean more capitalinflows and continued pressure for peso to appreciate, an investment bank said.
“Economic fundamentals are strong and there is continued momentum toward reform/liberalization – the Philippines could receive a credit rating upgrade this year,” Nomura Singapore Ltd. said in a report released yesterday.
Reforms have been noticed by foreign investors which could soon attract more capital investments, it said, a scenario that has been “missing for the last two years” of economic success.
The country has enjoyed 11 positive credit rating actions since the Aquino administration took over in July 2010. It has since brought the country’s creditworthiness to just one notch below investment grade, which once achieved, could lower borrowing costs and attract more foreign investors.
The latter has been considered the missing link with foreign direct investments (FDI) only amounting to $1.2 billion as of November last year, below the $1.5-billion forecast and a measly compared to other Southeast Asian nations.
“In addition to progress made on the government’s infrastructure investment drive, we expect improvements in FDI,” Nomura said.