Standard and Poor (S&P) Global Ratings upgraded the long-term sovereign credit ratings of Philippines to BBB+ from BBB while for the first time in 9 years, Vietnam’s credit rating was changed. Vietnam obtained a credit rating of BB from BB-.
As cited in the report in AgrinationPH, “S&P raised the credit ratings of the Philippines due to its strong economic growth trajectory, which we expect to continue to drive constructive development outcomes and underpin broader credit metrics over the medium term. The rating is also supported by solid government fiscal accounts, low public indebtedness, and the economy’s sound external settings”.
Further, “Vietnam’s development is attributed by country’s external settings, which feature broadly balanced external accounts, strong foreign direct investment inflows and a manageable external debt burden”, report stated.
Apart from these two countries, other Southeast Asian countries posted their credit ratings: Singapore rated AAA (1995); A- for Malaysia (2008); BBB- for Indonesia (2017); BBB+ for Thailand (2010).
“S&P is a business intelligence company that provides credit ratings on bonds, countries, and other investments.” This credit indicator is being used by various foreign investors in evaluating country’s economic conditions.
Economic conditions of other countries behind the S&P credit ratings
Among the Southeast Asian countries, Singapore has the highest credit score from S&P. This translates “country’s robust public finances and external positions, strong institutions, and prudent economic management”.
On the other, Indonesia acquired stable outlook on its sovereign credit rating, despite the volatile global capital flows and widening Credit Account Deficit (CAD).
In Thailand, “country’s strong credit metrics which off-sets ongoing political uncertainties in the next two years”.
Based on the report, Malaysia’s credit score is associated with “the government’s commitment to gradual fiscal consolidation and expects the one-off pressures such as the funding of goods and services tax (GST) rebates should abate after 2019”.