MANILA, Philippines - The Philippines is the most underrated country in the world, Finance Secretary Cesar Purisima said yesterday during a forum organized by the Foreign Correspondents Association of the Philippines.
Purisima said that the credit rating of the Philippines– currently below investment grade – “are four levels below where it should be.”
“The Philippines is the most underrated country in the world. I am confident that the credit rating agencies would catch up with their ratings sooner rather than later,” he told reporters.
He believes the Philippines deserves an upgrade soon because of “the improving fiscal situation, the well-managed macroeconomy and also because of the Aquino administration’s good governance platform.”
Purisima recently met with a review team of global debt watcher Standard & Poor’s (S&P).
The S&P team met with fiscal and monetary officials as part of its regular assessment of the country’s economic fundamentals.
The review team also sought updates on measures to raise revenues including the status of the proposed sin tax measure which is pending in Congress.
The government is pushing for House Bill 5757, authored by Cavite Rep. Joseph Emilio Abaya. The measure, currently pending at the House Ways and Means Committee, calls for the adoption of a unitary tax system for tobacco and liquor and indexation of taxes to inflation.
In December, the global debt watcher upgraded the credit rating outlook of the Philippines to positive from stable in December 2011.
An improved credit rating translates to lower borrowing costs of the government which, in turn, would result in an improved fiscal position or more resources for social service and infrastructure.
In 2011, the government incurred a budget gap of P197.8 billion, well below the P300 billion ceiling set for last year.
In February, Purisima met with representatives from S&P, Fitch Ratings, and Moody’s Investors Service in London to provide them an update of the Philippine economic landscape.