Fitch rates Philippines bond BB

Fitch Ratings said it assigned a long-term foreign-currency rating of BB to the Philippines' 10-year $1.5 billion global bond (short first coupon). The transaction was priced at 99.158% to yield 8½%. The rating is in line with the country's foreign-currency issuer default rating of BB.

The country's long-term foreign-currency issuer default rating of BB and long-term local-currency issuer default rating of BB+ have a stable outlook despite the negative implications of the global economic slowdown on the country.

The Philippines is going to fare reasonably well when compared to some of the other sovereigns rated in the BB category, Fitch said. The Philippines' economic growth is forecast to decelerate to 2.5% in 2009, the agency said, and national government budget shortfall to widen to 2.3% of GDP.

Remittances from overseas workers, which account for more than 10% of GDP and is an important driver for both external financing and the overall economy, also will be affected, Fitch said.

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