Fitch Assigns Philippines' Proposed USD Bonds 'BBB' Rating

(The following statement was released by the rating agency)
Fitch Ratings-Hong Kong-02 December 2020:
Fitch Ratings has assigned the Philippines' (BBB/Stable) proposed US dollar
bonds a 'BBB' rating.

The Philippines intends to use the net cash proceeds from the sale of the
global bonds for general purposes, including budgetary support.
Key Rating Drivers
The rating is in line with the Philippines' Long-Term Foreign-Currency Issuer
Default Rating (IDR) of 'BBB' with a Stable Outlook.

Fitch affirmed Philippines' Long-Term Foreign- and Local-Currency IDRs on 7
May 2020, and revised the Outlook to Stable from Positive.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating
action/upgrade:

- A resumption of strong economic growth following recovery from the pandemic,
while maintaining macroeconomic stability.

- Strengthening of governance standards towards those of the rating-category
peer median.

- Sustained broadening of the government's revenue base that enhances fiscal
finances and places the government debt/GDP ratio on a downward trajectory.

Factors that could, individually or collectively, lead to negative rating
action/downgrade:

- Reversal of reforms or a departure from the existing policy framework that
leads to macro instability or weaker fiscal or economic outcomes.

- Deterioration in external indicators, including foreign-currency reserves,
the current account deficit and net external debt, that lowers the resilience
of the economy to shocks.

- Deterioration in banks' asset quality that leads to instability or stress in
the financial system.
Best/Worst Case Rating Scenario
International scale credit ratings of Sovereigns, Public Finance and
Infrastructure issuers have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive direction)
of three notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of three notches over three years. The
complete span of best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit
ratings are based on historical performance. For more information about the
methodology used to determine sector-specific best- and worst-case scenario
credit ratings, visit [https://www.fitchratings.com/site/re/10111579].
Date of Relevant Committee 05 May 2020
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The
principal sources of information used in the analysis are described in the
Applicable Criteria.
ESG Considerations
The ESG profile is in line with that of Philippines.
Philippines
----senior unsecured; Long Term Rating; New Rating; BBB

Contacts:
Primary Rating Analyst
Sagarika Chandra,
Associate Director
+852 2263 9921
Fitch (Hong Kong) Limited
19/F Man Yee Building 60-68 Des Voeux Road Central
Hong Kong

Secondary Rating Analyst
Stephen Schwartz,
Senior Director
+852 2263 9938

Committee Chairperson
Tony Stringer,
Managing Director
+44 20 3530 1219

Media Relations: Alanis Ko, Hong Kong, Tel: +852 2263 9953, Email:
alanis.ko@thefitchgroup.com
Wai Lun Wan, Hong Kong, Tel: +852 2263 9935, Email:
wailun.wan@thefitchgroup.com

Additional information is available on www.fitchratings.com
Applicable Model
Numbers in parentheses accompanying applicable model(s) contain hyperlinks to
criteria providing description of model(s).
Country Ceiling Model, v1.7.1 (1
(https://www.fitchratings.com/site/re/976717))
Debt Dynamics Model, v1.2.0 (1 (https://www.fitchratings.com/site/re/983670))
Macro-Prudential Indicator Model, v1.4.0 (1
(https://www.fitchratings.com/site/re/983670))
Sovereign Rating Model, v3.12.0 (1
(https://www.fitchratings.com/site/re/983670))

Additional Disclosures
Solicitation Status
(https://www.fitchratings.com/site/pr/10144215#solicitation)
Endorsement Status
(https://www.fitchratings.com/site/pr/10144215#endorsement_status)
Endorsement Policy
(https://www.fitchratings.com/site/pr/10144215#endorsement-policy)

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