The Pioneer and Leading Domestic Credit Rating Agency in the Philippines
Credit ratings are an important component of capital markets development. Through credit ratings, improved disclosure and transparency are achieved, thereby making the financial markets more efficient.
Philippine Rating Services Corporation, known as PhilRatings, is the pioneer domestic credit rating agency in the Philippines. It provides credit ratings for bonds (including Green Bonds), commercial papers, bank loans, banks and other financial institutions (e.g., insurance companies), local government units (LGUs), asset-backed securities, project finance transactions, and Real Estate Investment Trusts (REITs). PhilRatings has been assigning ratings since 1985, formerly operating as a department of Credit Information Bureau, Inc. (CIBI; now known as CIBI Information, Inc.). CIBI, the original company, was established in April 1982. The credit rating department and the credit rating function were eventually spun off to form a separate and independent entity, PhilRatings, and was registered as a provider of credit rating services on March 22, 1999.
The Company is owned by two foundations – Go Kim Pah Foundation (70%) and the CIBI Foundation, Inc. (30%). It is a founding member of the Association of Credit Rating Agencies in Asia (ACRAA), the membership of which is currently composed of credit rating agencies within the Asian region.
PhilRatings plays an active and meaningful role in the development of the Philippine capital markets as it conscientiously participates in the implementation of a national credit rating system. It is the first and the only domestic Credit Rating Agency (CRA) recognized by the Bangko Sentral ng Pilipinas (BSP) for bank supervisory purposes. The eligibility criteria for recognition include, among others: a minimum 5-year track record in issuing reliable and credible ratings, a pool of experienced analysts, a competent and experienced Board of Directors, an established rating methodology, and an established record of independence, objectivity, and transparency.
Given its compliance with regulatory requirements under the Securities Regulation Code (SRC Rule 12.1), PhilRatings is likewise accredited as a credit rating agency by the Securities and Exchange Commission (SEC). Its assigned credit ratings are also used by the Philippine Dealing and Exchange Corporation (PDEx) for securities that are listed with PDEx. The Insurance Commission also utilizes assigned credit ratings if companies issuing securities would like to tap insurance companies as investors in or holders of these securities. Its ratings have also been accepted by regulators/parties in other countries (e.g., Indonesia and Vietnam) in Asia in relation to insurance companies and insurance company-related transactions.