GLOBAL debt watcher Fitch Ratings upgraded the long-term issuer default ratings of state-owned Land Bank of the Philippines and Development Bank of the Philippines on expectations the state would provide support in times of need to enable them to carry out their objectives in support of government policy.
Fitch in a statement over the weekend said it raised the ratings of the two banks to “BBB” from “BBB-.” The outlooks are stable.
“The upgrade of the banks’ IDRs and national ratings is driven by the upward revision of their Support Rating Floors. The SRF revisions stem from a reassessment of the government’s propensity to support the banks and follow their rating upgrades in December 2017 to ‘BBB-’ from ‘BB+’, reflecting the Philippine sovereign’s greater capacity for support. The sovereign ratings were upgraded to ‘BBB’ from ‘BBB-’ in December 2017,” Fitch said.
It said the banks’ roles appeared to have been expanded and were made clearer after pronouncements by the administration of President Rodrigo Duterte.