Fitch Ratings maintain Stable outlook for RP

I know many of my countrymen will lambast this article and me for posting this. it's a concept they don't understand, but I still personally hold this very very important in our country's bid for economic stability.  The underpriviliged will always say, they never feel anything good coming out of all these economic "good news" and that it's all a farce.  It's old news but hey, sometimes, a government can only do something, much of it all depends on your own diligence really. The government can not just give alms to all the economically challenged, especially those who breed like rabbits.

Here is the news feed from inquirer.net

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Fitch Ratings maintain Stable outlook for RP

Maintaining a healthy fiscal position ranks high on Fitch's to-do list for the Philippines, followed by worries over inflation risks.

Fitch Ratings head of Asia Sovereigns James McCormack said the country's fiscal deficit might likely overshoot government forecasts this year specially if the government implements a subsidy program to help households deal with higher food and energy prices.

"Even with subsidy numbers we're using, we didn't anticipate making any changes to the rating because it wouldn't fundamentally change the structure (of the country's) public financing," McCormack said following a forum sponsored by UnionBank at the Philippine Stock Exchange in Pasig City.

"The reduction in debt and deficit for the past couple of years have been good, to the extent that if there will be a subsidy program to be introduced as a response to higher commodity prices, we view that as a cyclical and not a structural issue," McCormack added.

He also said the Bangko Sentral ng Pilipinas (the Philippine Daily Inquirer) was faced with a tough decision to bite the bullet now with another interest rate increase after its 50-basis-point hike in key rates to curb accelerating inflation, which could also soften economic activity.

Fitch sees weaker GDP growth at 5.5 percent this year, from 7.2 percent in 2007, which already assumes more interest rate increases by the central bank. Fitch's growth projection is a tad below the government's forecast of between 5.7 to 6.6 percent.

"It's weaker than last year but still a reasonable growth," McCormack said.

"Depending on where inflation is, that tells you where the policy rates needs to be. If inflation goes higher then clearly interest rates will move higher as well," McCormack said.