S&P cuts Philippines outlook to ‘stable’ amid rising risks from Middle East conflicts
By Katherine K. Chan, A reporter
S&P Global Ratings downgraded its outlook on the Philippines to “stable” from “positive,” citing the impact of the energy crisis on the country’s foreign and financial positions.
Nevertheless, the credit watchdog affirmed the country’s long-term investment grade of “BBB+”, which is a notch below the “A” rating intended for the National Government. It also maintained its short-term “A-2” rating for the country.
“We have reviewed the rating situation in the Philippines to stabilize from positive because the war in the Middle East has increased the risk to follow external metrics and the country’s finances,” said a statement issued on Thursday.
The stable outlook means that the Philippines’ credit rating will likely be maintained for the next two years, reflecting the expectation that the country will “maintain a healthy economic growth rate that will allow fiscal performance to gradually improve while external metrics moderate.”
S&P noted that the war in the Middle East is likely to continue to disrupt the economy in the coming months as they expect conflicts to escalate and the closure of the Strait of Hormuz to ease this April.
“However, the uncertainty about how the situation will unfold is great,” he added. “We believe it is unlikely that external and financial support will develop sufficiently over the next two to three years to supplement the support for private equity.”
