MANILA, Philippines - Investment grade rating is within reach for the Philippines given the economic achievements mentioned by President Aquino during his third State of the Nation Address (SONA) last Monday, the central bank chief said.
“Consecutive rating actions on (the Philippines) indeed recognize the efforts towards fiscal consolidation, the continued strength of the country’s external position and the strides the government has made on improving governance,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. told reporters in a text message late-Monday.
“As we continue on the economic reform agenda, we can expect investment grade sooner rather than later,” he added.
President Aquino last Monday delivered his SONA before the 13th Congress, detailing his administration’s achievements for the past two years, including the 6.4 percent economic growth posted in the first quarter and the eight positive credit rating actions earned during his term.
This enabled the Philippines to attain its highest credit rating in 13 years at one notch below investment grade. Officials however are lobbying for the country to be granted investment status, a position that is expected to bring in more investments and lower the Philippines’ borrowing costs.
“We are pleased that the President has also noted in his speech the country’s strong external position that is enabling the country to commit funds towards regional and global cooperative efforts—efforts to limit contagion from weaknesses in the advanced economies to our part of the world,” Tetangco said.
Aquino said the Philippines’ $1-billion loan to the International Monetary Fund is a sign that the Philippines, formerly a borrower, is now the one extending assistance to more developed nations struggling to contain a debt crisis for about three years now.
Tetangco said more investments will soon flock to the Philippines as the government continues with its reform agenda.
“We are confident that as the governance reform agenda goes into full swing and leakages are better plugged, we would see each dollar (or peso) invested in the Philippines ‘work harder,’” the BSP chief said. - By Prinz P. Magtulis