Fitch rates Philippines new bonds BB

Fitch Ratings said it assigned the debt issues by the Philippines a rating of BB, in line with the sovereign's long-term foreign-currency issuer default rating. The Philippines long-term foreign-currency issuer default rating is BB, long-term local-currency issuer default rating is BB+, short-term issuer default rating is B and the country ceiling is BB+.

The outlook is stable.

The Philippines is raising a total of $1.5 billion by reopening two dollar-denominated instruments: the 6½% January 2020 bond and the 6 3/8% October 2034 bond. The new issues bring the total size of the 2020 bond to $1.4 billion and the 2034 bond to $1.85 billion.

The ratings balance a manageable external financing requirement against weaknesses in the public finances, including a low revenue base and high debt ratios, Fitch said.

The budget deficit seems to be on track to come in below the projection for 2009, supporting ratings at the current levels, the agency said.

Relatively high public debt continues to weigh on the ratings, Fitch added.

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