Fitch downgrades RP’s outlook

LONDON-BASED Fitch Ratings has cut its growth forecast for the Philippines to just 0.5% for this year, substantially lower than the its 2.0% estimate in February and the government’s trimmed 3.1-4.1% expectation announced last week.

"We are now forecasting a GDP (gross domestic product) growth rate of 0.5% in 2009, the lowest growth rate since 1998," James McCormack, head of Asia Pacific Sovereigns at Fitch, told BusinessWorld.

The revised forecast follows a two-day visit last week by a Fitch team which Mr. McCormack headed.

Manila's budget deficit may balloon to about 222 billion pesos ($4.6 billion), or 2.8 percent of gross domestic product, wider than a previous estimate of 2.2 percent, James McCormack, managing director of Asia-Pacific sovereign ratings at Fitch said on Monday.

He added that the wider deficit would not necessarily trigger a credit rating downgrade.

"We have to look at the fiscal deterioration and try to separate how much of that deterioration is due to trying to stimulate growth and how much is due to structural weaknesses in public finances," he told Reuters in a telephone interview.

The Philippines' latest forecast is for a budget deficit of 199.2 billion pesos or 2.5 percent of GDP this year.

"A big part of what we are going to see this year is probably a cyclical deterioration in the Philippines … In that sense, we probably wouldn't be moving the rating lower during a cyclical downturn then moving it back up when the cycle turns," he said.

 

Ahead of Fitch’s report and given lower expectations by multilateral institutions and investment banks, the government last Thursday announced that it was dropping its 3.7-4.4% growth forecast for 2009.

sources , inquirer , bworldonline

 

Content Protected Using Blog Protector By: PcDrome.

Please don't print this Website

Unnecessary printing not only means unnecessary cost of paper and inks, but also avoidable environmental impact on producing and shipping these supplies. Reducing printing can make a small but a significant impact.

Instead use the PDF download option, provided on the page you tried to print.

Powered by "Unprintable Blog" for Wordpress - www.greencp.de