BLUE-CHIP IN 2 YRS

Prompt passage of structural, tax reforms vital to A rating

The door is open for the Philippines to attain an unprecedented A rating from credit watchdogs and attaining the status would be in the hands of Congress.

Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno believes that the first-world debt grade can be achieved through the immediate passage of structural reform measures proposed by the Bangko Sentral ng Pilipinas (BSP) along with the approval of the remaining packages of the Comprehensive Tax Reform Program (CTRP).

“Our target is to get it in two years. The key there is more structural reforms. It is doable. We’ll get there. But the more important thing is that we do these structural reforms,” Diokno said.

In a briefing, Diokno said the BSP will continue to work with Congress as well as concerned agencies towards the timely passage of four structural reform measures that economic managers are pushing.

“We look forward to advocating for much needed reforms in several areas within the scope of BSP. These included the amendments to the Anti-Money Laundering Act of 2001 (AMLA) and the Human Security Act of 2007 (HSA), amendments to the Agri-Agra laws and reforms in financial consumer protection and deposit secrecy,” Diokno said.

Middle income next year

“We believe that these structural reforms will provide robust support to the country’s economic goals and to the government’s objective of securing an A credit rating. Down the road, we see this having a favorable impact not just on the country’s development efforts but on the lives of Filipinos as well,” he added.

The BSP chief will continue to complement the government’s effort in achieving a higher credit rating as it improves capacity enhancement to promote price and financial stability as well as an efficient payments system.

Also, the BSP chief expressed his optimism towards such goal as he noted that improved credit ratings will translate to lower borrowing costs and a favorable investment environment to support economic growth.

“As long as the national government is able to implement the ‘Build, Build, Build’ program, the road to A status can be accomplished in 2 years time. I am very optimistic... It is doable, maybe in 2021 or 2022. That’s just in time, because next year we will graduate to an upper middle class income (UMIC) country,” he added.

It is doable. We’ll get there.

Beneficial jump

Department of Finance Secretary Carlos Dominguez III said that the credit upgrade would be very beneficial for the country, not only for attracting investments but in offsetting the impact of higher interest rates with the country’s graduation to UMIC this year.

“We mean to address the need for us to improve our credit rating because we’re going to lose our special interest rates, because we will be graduating already to UMIC status soon,” Dominguez said.