Phl gets another credit rating upgrade

The Philippines bagged another credit rating upgrade, this time from Kuala Lumpurbased RAM Ratings Services Berhad on the back of the country’s sustained growth momentum, a persistent uptrend in foreign direct investments inflows, and continued progress in the government’s economic reform program.

RAM announced late Thursday it upgraded the global credit rating of the Philippines by one notch to gBBB2(pi), or BBB equivalent, a notch above the minimum investment grade.

The debt watcher also raised the Philippines’ regional and Malaysia national ratings to AA3, three notches away from the highest rating of Triple A, citing the country’s “superior capacity to meet its financial obligations.”

All new ratings were assigned a stable outlook premised on the country’s strong external position and economic resilience amid ongoing reforms.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the upgrade is an acknowledgement of sound governance on both the financial and monetary fronts.

“The BSP will continue to be a pillar of strength for the economy by remaining committed to its price and financial stability mandates, as well as by pursuing additional reforms to make the financial system even more inclusive and responsive to the needs of consumers and investors,” Espenilla said.

The opinion of RAM helps guide investment decisions of corporate entities, particularly from Malaysia.

Finance Secretary Carlos Dominguez said the latest upgrade keeps the Philippines on a positive credit rating momentum and solidifies the key message to investors and other international stakeholders that the reform-oriented Duterte administration boosts economic competitiveness.

Dominguez said there is a steady revenue source for programs meant to sustain and even boost the momentum of the country’s increasingly investment-led growth with the enactment of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

RAM took note of recent legislative reforms deemed vital to further economic growth: tax reforms, the national ID system, the Ease of Doing Business Act, and the shift from obligation to cash basis in the national budgeting system.

“The government’s ambitious infrastructure program is broadly on track,” given that “out of 75 flagship projects, 35 projects had been approved by the authority as of June 2018 compared to 18 a year ago,” RAM said.

It also cited growth in FDIs, the rate of which is among the fastest in the region. Net FDI inflows amounted to $4.8 billion as of May, up by 49 percent year-on-year.

RAM also expressed confidence that the moderation of the Philippines’ economic growth to six percent in the second quarter still kept the economy one of the fastest growing among emerging markets in Asia.