Korean debt watcher keeps PH’s investment grade rating

Korea-based NICE Investors Service maintained the Philippines’ investment grade rating, recognizing the country’s ability to weather external headwinds and the government’s prudent tax and spending policies.

The existing rating of “BBB,” which is a notch above the minimum investment grade, is assigned a “stable” outlook, given perceived absence of factors that can materially affect the country’s creditworthiness over the short term.

“The policy direction of the Duterte administration [that is] set to increase government expenditure through expanding [the] tax base is deemed appropriate, given the need for infrastructure investment. The government’s tax reform and infrastructure investment acceleration are already showing tangible effects in 2018,” NICE said in its report released October 31.

Noting the volatility in the foreign exchange market globally as a result of the US-China trade war and interest rate hikes in advanced economies, NICE said the impact will be appropriately managed, “given the country’s response capability in terms of FX liquidity.”

Responding to the latest credit rating development, Finance Secretary Carlos G. Dominguez III said: “A decisive leadership that implements game-changing reforms in policymaking, tax administration, and infrastructure modernization in pursuit of high and inclusive growth, characterizes the Duterte administration.”

“The government’s Comprehensive Tax Reform Program (CTRP) and the ‘Build, Build, Build’ infrastructure initiative are expected to sustain the country’s growth momentum, achieve financial inclusion, and propel the Philippines into an upper middle-income economy by 2022. We thank NICE Investors Service for recognizing the scope and purpose of the Duterte Administration’s policy directives,” he