Scandal dents PH 'A' rating hopes

Nomura Holdings Inc. warned that the Philippines' credit rating outlook faces a potential downgrade to “negative” if lingering corruption scandal involving flood control funds remains unresolved, threatening to derail the country’s progress toward an “A” grade rating.

- BY DERCO ROSAL

In a monthly report published by the Japanese investment and brokerage giant on Friday, Jan. 9, Nomura Analysts Euben Paracuelles and Yiru Chen characterized the current environment in the Philippines as one of high uncertainty.

“We think uncertainty is high: if a resolution to the corruption scandal is reached, a one-notch upgrade to Ais possible. Otherwise, the outlook risks returning to ‘stable’ or even being reduced further to ‘negative,’” Paracuelles and Chen wrote in their report.

Former Finance Secretary Ralph G. Recto said S&P Global Ratings could have upgraded the Philippines’ credit rating in 2025 if not for the eruption of alleged corruption cases involving flood control funds.

Recto had said the rating agency held back on upgrading the sovereign credit rating from BBB+ to A-.