Moody’s warns: Political risk could disrupt growth
Reforms seen supporting PH economy for the medium term
ONGOING reform in the Philippines is likely to boost the country’s mediumterm economic growth, Moody’s Investors Service said, but it warned that domestic political risk, though low, is becoming more unpredictable and could disrupt progress for the long term.
- The report said the outlook for -
-
those more dependent on external It pointed out that authorities are
But capacities to implement these policies differ across countries as evident in Moody’s scores for Institutional Strength, which vary greatly across the region, it said.
“The capacity of governments to implement measures and the effectiveness of policies in achieving the respective governments’ objectives will shape the sovereigns’ credit pro India, Indonesia, Philippines In particular, reform measures taken by are likely to support their economic growth for the medium term, the credit rating agency said. emphasized improvements in its business operating environment and greater infrastructure investment. been to increase revenue and provide space to ramp up spending on projects, including transportation and electricity generation. In both cases, poor infrastructure has economy,” it said. The government had planned that the country’s infrastructure budget – both national and local - 2022, or from 5.4 percent to about
with key domestic drivers of growth expected to remain solid. However, the credit rater said - ippines remains low, it has become more unpredictable than before.
It explained that political developments could interfere with the ability of governments to implement reforms and would exacerbate the negative growth impact of slower
Moody’s mentioned that to power in June 2016, he has clashed with legislators over extrajudicial killings linked to the war on drugs, and sparked controversy over allowing a hero’s burial for the late president, Ferdinand Marcos.
- proval ratings, a prolonged focus on political matters could detract reforms,” it said.
The debt watcher also recalled that pursue a more independent foreign policy – including ending joint military exercises with the US armed forces – and signaled closer ties with Beijing, Arbitration ruling in July 2016 that invalidated China’s territorial claims to much of the South China Sea.
“While this has yet to translate risks are more unpredictable than they were before,” it stressed.