Moody’s: New upgrade for Phl possible

MANILA, Philippines - A senior official of Moody’s Investors Service hinted yesterday at the possibility of the Philippines securing another credit rating upgrade soon.

“Last year, when we upgraded the Philippines to investment grade, we also assigned a positive outlook so I think that was a pretty clear signal that we thought that further adjustments to credit (rating) are forthcoming within the next 12 to 18 months,” Christian de Guzman, vice president and senior analyst at Moody’s, said.

Moody’s in October last year raised the country’s credit rating to Baa3 from Ba1 and assigned a positive outlook.

“We’re still fairly bullish on the way things are going here,” De Guzman said but noted the credit rater is assessing how the country fares as compared with other economies graded with the same rating.

“What we’re looking for... our ratings are also somewhat ordinal ratings, that is, we’re comparing one country versus another through this ratings scale. So what this means is we’re looking to see if the Philippines continue to outperform other countries with the same rating,” De Guzman said.

Moody’s rating action last year was on the back of the Philippines’ robust economy, fiscal and debt consolidation, and political stability and improved governance.

De Guzman said that the country’s tax efforts will have to be improved as the share of tax revenues to total GDP remains low.

“It is a fact that the tax revenue as a share of GDP in the Philippines is amongst the lowest among investment grade countries so there is still room for improvement. But at the same time, you can also say that the government is not spending beyond its means so even though tax revenue as a share of GDP is low, expenditures as a share of GDP is also low,” de Guzman said.

But the recent efforts being undertaken by the new Customs Commissioner to collect more revenues is a credit positive for the Philippines, the debt watcher said.