Last updated on May 6th, 2021 at 08:28 am
Global credit watcher Fitch Ratings upgraded its outlook on two Philippine state-owned banks on Thursday as it noted a “positive macroeconomic policy.” Advertisement Fitch revised its outlook on both the Philippine Land Bank (LBP) and the Philippine Development Bank (DBP) to “Positive” from “Stable,” suggesting a rating-scale upward trend.
The sovereign rating outlook review reflects ongoing adherence to a sound macroeconomic policy framework, progress on fiscal reforms that should keep government debt at manageable levels and ongoing stability in its external finances.
As its revenues are generated from commercial banking activities, LBP is forced to support rural development while remaining financially viable.
While, the primary objective of the DBP is to provide banking services mainly to meet the needs of agricultural and industrial enterprises in the medium and long term.
In the same statement, Fitch maintained both banks ‘ long-term issuer default ratings (IDRs) at ‘ BBB. ‘ Under the Fitch rating scale, a ‘ BBB ‘ means that default risk levels are currently low and that financial commitment payment capacity is deemed ‘ adequate. ‘ It also indicates, however, that adverse market or economic conditions are more likely to impair such capacity.