S&P rates Philippines bonds BB

Standard & Poor's said it assigned its BB debt rating to Philippines' (foreign currency BB/stable/B; local currency BBB/stable/A-3) announced global bond. The issue is a reopening of the republic's euro-denominated 9.125% bond due in February 2010.

S&P said the sovereign credit rating on the Philippine government is supported by the country's adequate external liquidity, with total debt service (including short-term debt) projected at 30% of current account receipts in 2004, similar to the median level for rated peers. Total external debt is projected at 119% of current account receipts this year, similar to the median level.

"The general government deficit is likely to remain relatively high at over 4% of GDP by the government's definition this year, compared with 4.6% in 2003, due largely to weak tax collection," said S&P credit analyst Agost Benard. "General government debt, excluding amounts guaranteed by the government and lent to public-sector corporations, is approaching 84% of GDP this year, compared with the median level of 51% for similarly rated sovereigns."

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