MOODY'S INVESTORS SERVICE DECLARES RP IN NO FISCAL CHAOS

MANILA, December 18, 2003  (BULLETIN) New York-based credit rating firm, Moody's Investors Service, declared the country is not in the verge of any fiscal chaos, but admitted that the uncertainty in the political front will be the biggest concern that could affect the Philippines' credit worthiness.

This was the evaluation of Moody's following the conclusion of its six-day review on the country, which will be used in drawing-up the country's credit standing scheduled to come out at the onset of the coming year.

"According to Moody's, a fiscal crisis means we would soon be defaulting on our loans and the numbers do not support such observation. Our debt has remained manageable and amortization actually peaked in 2002 and 2003. For next year, the government has already raised a big portion of its requirements," government's Investors' Relations Officer Corazon Guidote, who was present in most part of the six-day evaluation of the credit rating firm, quoted Moody's as saying.

During their six-day stay in the country, officials of the credit rating agency firm held dialogues with heads of Ayala Corp., JG Summit, SM Prime, Lufthansa Technique, Texas Instruments, Intel, Timex, Moog Corp., as well as political leaders, among them Senator Edgardo Angara.

She admitted that at the onset of the evaluation period, "Moody's came here with a negative bias because of the political noise." However, this bias was unfounded.

"They left knowing that things aren't so bad. In fact, they were surprised with the statements made by former Finance Secretary (Jose Isidro) Camacho about the Philippines being in a fiscal crisis," she said.

To recall, the former finance chief described the country to be in a fiscal crisis, citing the state's outstanding debt stock, not to mention the prevailing inequities in the current political system, which is not helping solve the problem, any.

Asked about the chances of the government to maintain the prevailing credit outlook, Guidote said "I think our credit rating has a 50-50 chance of being downgraded or maintained."

"A downgrade is already discounted by the market while keeping the outlook would be a bonus for us. I think Moody's saw strength in the economy and confined its concerns on the political situation," she added.


Reported by: Sol Jose Vanzi

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