S&P rates Philippines bond BBB

Standard & Poor’s said it assigned a BBB rating to a proposed benchmark-size dollar-denominated global senior unsecured bond issue by the Republic of the Philippines.

The bonds mature in January 2040.

The bonds, which mature in January 2040, will constitute the direct, unconditional and unsecured general obligations of the sovereign and will rank at least equally with all other unsecured and unsubordinated external debt of the Philippines, S&P said.

The proposed debt issue is backed by the full faith and credit of the Philippines for the punctual payment of all principal and interest due, the agency said.

The ratings reflect the country’s strong external liquidity and net external creditor position, combined with an effective monetary policy framework, which has sustained a low inflation and interest-rate environment, S&P said.

These rating supports are weighed against a relatively low income level and fiscal constraints, owing to a narrow revenue base and a shortage of basic infrastructure and government services, the agency said.

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