Int’l community still confident in PH

The international financial community’s confidence in the Philippine domestic economy is a “clear repudiation” of the misinformed belief that the administration is steering the country towards a so-called “debt trap,” said Finance Assistant Secretary Antonio Lambino II.

Factors to this confidence includes S&P Global Ratings’ recent move to upgrade the Philippines’ long-term credit rating to the higher investment grade of “BBB+” and later, Manila’s highly successful floats of Euro and “panda” bonds in the offshore capital markets.

Lambino said the higher “BBB+” rating “is an affirmation that the Philippines, given its strong macroeconomic fundamentals and impressive liability management that were continued under the Duterte administration, is more than capable of meeting its financial obligations.”

“Moreover, the credit rating upgrade makes debt servicing less expensive even for private companies that borrow from abroad as they will be able to access financing at lower interest rates,” Lambino added.

Lambino said the Philippines’ higher credit rating that is just one step away from the ‘A’ investment grade accorded the world’s most stable economies, plus the subsequent oversubscribed sale of Philippine global bonds worth 750 million Euros in key European financial capitals and elsewhere show that “investors are confident the country can indeed manage and pay back its debt.”

“These positive developments also fly in the face of the misinformed view spread by critics that Malacañang is steering the country towards a debt crisis,” Lambino said.

Lambino stressed that the government has been securing Official Development Assistance (ODA) ODA financing and floating bonds overseas as part of its efforts to raise enough resources for infrastructure and human capital development, which are at the center of President Duterte’s agenda for sustained high growth and financial inclusion.

As for the overseas bond floats, Lambino said the overwhelming reception from foreign investors was illustrated by the fact that the Bureau of the Treasury (BTr) had to raise its base offering size for the euro bonds to 750 million euros, from the original 500 million euros, after the offer was oversubscribed six times.

The credit rating upgrade makes debt servicing less expensive even for private companies that borrow from abroad as they will be able to access financing at lower interest rates ANTONIO LAMBINO II Department of Finance Assistant Secretary