4th investment grade for Phl soon

MANILA, Philippines - Finance Secretary Cesar Purisima sees the Philippines receiving its fourth investment grade rating soon as President Aquino’s drive to transform the country into one of the region’s fastest-growing economies continues to gain strength.

Purisima issued this statement following Moody’s announcement it was reviewing Philippine government bond and currency ratings for a possible upgrade on the back of the country’s strong economic gains, political stability and improving government finances.

The economy grew 7.8 percent in the first quarter of the year, making it the fastest-growing economy among Asian countries. 

The impressive growth was attributed to the strong performance of manufacturing and construction sectors as well as the increase in government and consumer spending.

Fitch Ratings gave the Philippines its first investment grade rating in March followed by Standard & Poor’s and the Japan Credit Rating Agency in May.

Continued investment flows into the Philippines likewise contributed to the upgrade of the country’s ratings.

“The status for upgrade should be seen as recognition of the positive changes in the economy brought on by the Aquino administration’s commitment to good governance,” Purisima said.

“By Moody’s own implied bond ratings, the Philippines has long been one of the most underrated countries in the world, with strength far exceeding our current credit rating. I am confident that as Moody’s continues to evaluate the Philippines they will see that the foundations for sustained, resilient growth have been laid, with a bright future for us on the horizon,” Purisima added.

For his part, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said the government is eyeing an investment-grade status “sooner than earlier expected.”

“With the statement of Moody’s, we are hoping to receive investment grade rating sooner than we earlier expected. The team will be here next week...,” BSP Governor Amando Tetangco Jr. said.

The review, Moody’s said in its statement, is expected to last for three months, after which a decision either to raise or maintain the country’s rating- a notch below investment grade - will be announced.

 â€œSoon after the visit, a committee meeting is expected. Hopefully, they would be convinced even more that the positive over-all performance and the reforms are sustainable,” Tetangco said out.

“The governance changes so far could cement economic growth on a higher trajectory,” he added.

The Aquino administration believes investment grade ratings would lower debt interest payments, open more credit avenues, and give the country more foreign investments. - With Prinz Magtulis