NEW YORK (Dow Jones)--The Philippines is hoping to move up the rating scale to investment grade, and this week the island nation's finance minister is in New York making its case to credit-rating agencies and investors.
"We have a rare opportunity," said Finance Secretary Cesar Purisima in a meeting with Dow Jones Newswires. Purisma hopes to garner the coveted status during the tenure of current President Benigno S. Aquino III.
A higher rating would save the country millions in interest payments and allow it to attract investment capital.
Currently, Fitch Ratings has put the country one notch below investment grade while Moody's Investors Service and Standard & Poor's have it rated two notches lower. This is after four recent upgrades by the agencies.
Last month, the country repaid 7% of its outstanding foreign debt, about $1.3 billion at a premium of nearly $1.7 billion, the secretary said, as part of a series of broad economic and government reforms it is undertaking to improve the country's image and governance.
The repayment of debt is expected to save the country from making expensive interest payments and takes it a step closer toward its policy goal of reducing foreign currency debt. Like other countries in the region, the Philippines, which is the largest issuer of foreign debt with nearly $16 billion outstanding, hopes to protect its economy from the swings of the currency trade by reducing its dependence on such debt.
Currently, the Philippines peso has weakened against the dollar after a strong showing earlier in the year.
Last week, the peso dropped to ₱43.12, its biggest decline since Nov. 11, 2010, according to Bloomberg data, along with other Asian currencies on broad market declines as the European crisis made investors risk averse.
While this is a cause of concern, "we want to keep our currency market determined," Purisima said.
"We are monitoring our currency versus peer countries like Thailand, India, Vietnam and China, a bit," he said. "We want to make sure we are within the same band."
