Of Rating Downgrades and Outlooks

It is quite irritating to see newspaper headlines (the Philippine Star, I think) and also to hear over the radio (DZBB care of Mike Enriquez) that the credit rating of the Philippines has been downgraded. Fitch and Standard & Poor's have maintained their respective ratings for the Philippines and only the outlook has changed. Saying therefore that the rating has been downgraded is inaccurate.

A rating downgrade means that there has been a downward movement in the actual rating. The outlook, on the other hand, gives a clue as to what the future movement in the rating might be over a particular time horizon (e.g. one year, three years -- depending on the rating agency). The fact that the outlook has been changed from stable to negative means that it is more likely now that a rating downgrade may occur.

End of explanation.

[By Angelica Viloria | Tuesday, July 12, 2005]


Show This To Your Mom Today

Copyright © 2001-2015 by Angelica Bautista Viloria. All Rights Reserved.


  Previous entry: "Holding On"
  Next entry: "Been There, Heard That"




Angel Viloria photo
"We Host at H4P because
H4P is affordable, reliable,
and customer-friendly!"
-- Angelica Viloria


  Viloria.com
  About Angelica Viloria
  Angelhouser
  Archives
  Secondthoughts
  Contact Us
  RSS Feed


  AngelicaViloria.com
  AtYourWord.org
  TubBu.com