The Philippines bagged another credit-rating upgrade, this time from Japan-based Rating and Investment Information Inc. (R&I), on the basis of the significantly improved per capita income posted by the $250 billion Southeast Asian economy.
R&I hiked the country’s long-term foreign-currency issuer rating from “BBB-” to “BBB” with a stable outlook. This puts the R&I’s rating at par with the recent upgrade from the Standard & Poor’s Ratings Services —which upgraded the Philippines earlier this year.
“The Philippines’s economy continues to show strong growth, thanks to brisk investment coupled with private consumption driven by remittances from overseas Filipinos,” the ratings agency said.
“Inflation rates are kept low, and concern about the government’s fiscal position and external liquidity is small. Amid heightened reform momentum, infrastructure and industrial development, which were pending issues, are likely to progress.
The economic managers lauded the rating upgrade which came at a time when local output measured as the gross domestic product actually slowed in the first three months.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the upgrade validates the soundness of existing policis in place in the domestic economy.
“The latest development on the country’s credit standing is a recognition of a host of favorable macroeconomic indicators, particularly an inflation outlook that is conducive for business and the stability of the financial system amid a difficult operating environment.… The BSP will continue to craft policies that will help maintain this stability,” Tetangco said
The Department of Finance and Department of Budget and Management, likewise, welcomed this development, saying the reforms put in place by the government are recognized by the international community.
“Reforms that this government started to institutionalize helped ensure that the positive momentum will not falter,” Purisima said.
“There is a risk, though, that the next government will not be as reform-minded as the Aquino administration,” R&I said.
However, pressures from growing international relationships such as the establishment of the ASEAN Economic Community (AEC) in 2015, along with public expectation for sustained reform initiatives, should deter the post-Aquino government from going backwards,”
Written by: Bianca Cuaresma