ECONOMIC INDICATORS

[kingsknight]

Central bank: Currency, stock investors assessing risk

Inquirer
Last updated 04:03am (Mla time) 08/18/2007

http://business.inquirer.net/money/topstories/view_article.php?article_id=83323
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[robert]

BSP likely to cut rates after Fed move-- ING
by Charo Logarta
ABS-CBN News

Dutch banking giant, ING Investment Management said Friday, it expects the Philippine central bank to slash interest rates following the Fed’s quarter point cut.

"The cut in fed funds rate will likely be matched by the BSP in its next policy rate setting meeting later this month as it gives the BSP more room to adjust policy rates downward," said Paul Joseph Garcia, chief investment officer at ING Investment Management.

On Wednesday, the Federal Reserve cut its key interest rate by 25 basis points, bringing rates down to 4.5 percent from 4.75 percent, in an effort to help revive the US economy’s problematic housing sector and credit market.

Traders widely anticipated the Fed cut, following a dramatic 50 basis point rate cut last September.

Philippine central bank governor Amando Tetangco Jr. earlier said, the policy-making monetary board would consider the implications of the Fed’s latest rate cut, particularly on capital inflows and domestic liquidity.

"The primary consideration of the BSP in assessing the monetary policy stance is the inflation outlook. This will be done together with the assessment of other relevant factors that can influence future inflation," said Tetangco.

The Philippine central bank’s monetary board will hold its policy meeting on November 15.

http://www.abs-cbnnews.com/storypage.aspx?StoryId=97855

[BMD]

S&P raises outlook on Philippine credit rating

Investment Grade Rating perhaps in 6 months or 12 months?

S&P rating changes lagged market perception. The market has already perceived The Philippines as investment grade for several months based on 10 year bond yields.

The Disconnect


GDP (Bil USD) GDP Growth YoY (%) 10yr Bond Yields (%) Debt to GDP (%) Ratings (S&P/Fitch/Moodys)
(PIIGS)
Portugal 228 -1.70 12.99 93.00 BBB-/BBB-/Ba2
(1-2 notches investment grade)
Ireland 203 +2.30 8.21 96.20 BBB+/BBB+/Ba1
(1 notch below investment grade to
3 notches investment)
Italy 2051 +0.80 6.36 119.00 A/A+/A2
(5-6 notches investment grade)
Greece 304 -5.0 35.06 142.80 CC/CCC/Ca
(8-10 notches below investment grade)
Spain 1407 +0.8 5.75 60.10 AA-/AA-/A1
(6-7 notches investment grade)

(TIPs)
Thailand 318 +3.5 3.20 44.10 BBB+/BBB/Baa1
(2-3 notches investment grade)
Indonesia 706 +3.5 6.24 26.90 BB+/BB+/Ba1
(1 notch below investment grade)
Philippines 200 +3.2 5.39 47.23 BB/BB+/Ba2
(1-2 notches below investment grade)

Based on 10yr Bond Yields, the markets are lending to the TIPs at interest rates comparable to higher-rated countries:
Indonesia comparable to A/A+/A2 (5-6 notches investment grade)
Philippines comparable to AA-/A1 (6-7 notches investment grade)
Thailand comparable to AA+/AAA (9-10 notches investment grade)

[BMD]

France CDS Rate Exceeds Indonesia, Philippines

France is “long overdue” in the eyes of investors to lose its top credit ratings as Europe’s sovereign debt crisis persists, according to Peter Boockvar, a Miller Tabak & Co. strategist.

Boockvar drew his conclusion from the rates on swap contracts that protect against defaults. French bonds are more expensive to insure than government debt from Indonesia and the Philippines.

France’s credit-default swap rate was 10 basis points higher than Indonesia’s and 37 basis points higher than the Philippines’ two days ago, based on CMA’s figures.

http://www.bloomberg.com/news/2011-12-15/france-cds-rate-exceeds-indonesia-philippines-chart-of-the-day.html

[BMD]

S&P Raises Outlook on Philippine Credit Rating to Positive

Dec. 16 (Bloomberg) -- The Philippines’ credit rating outlook was raised by Standard & Poor’s Ratings Services, boosting the nation’s chances of an upgrade that would bring it closer to investment grade.

The outlook on the country’s long-term foreign-currency rating of BB was raised to positive from stable, S&P said in a statement today, citing “strong external liquidity and signs of improving growth prospects.”

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=MBT:PM&sid=avzB5zRCh8Yk