DOF trumpets gains from ratings upgrade

The Aquino administration is trumpeting the gains from credit ratings upgrade, saying that these achievements have put the Philippines just one notch below investment grade after nine positive ratings action since July 2010.

Finance Secretary Cesar Purisima said President Aquino reversed a decade’s worth of credit rating decline after a little more than two years of serving in office.

“This just shows how good governance can bring about good economics,” Purisima said.

In trumpeting the positive ratings actions received by the Aquino administration, Purisima said such actions reflect the current economic performance of the country.

“The Philippines continues to be a strong performer in the current global economic climate, achieving a respectable growth rate of 6.1 percent in the first half of the year,” he said.

He noted for instance that revenue collection continues to expand on the back of strong and steady performances of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) at a rate faster than nominal gross domestic product (GDP) growth.

Furthermore, he said that the country’s foreign exchange reserves continue to provide a strong cushion against external shocks.

“This is bolstered by sustained growth in dollar remittances and business process outsourcing revenues,” he said.

Finance and monetary officials have said that the country deserves an investment grade rating given its strong economic fundamentals.

Officials said the Philippines may finally get the investment grade rating next year at the earliest or before the end of the Aquino administration’s term in 2016.

On Monday, Moody’s Investors Service upgraded the Philippines’ foreign and local currency long-term bond ratings to Ba1 from Ba2 with a stable outlook on account of sustained economic growth, strengthening external payments position, improving fiscal dynamics and implementation of governance reforms.

Purisima said that with all the recent rating actions, the Philippines is in a much better position compared to how the country fared during the 1997 Asian financial crisis.

“I can’t say this enough: If you look at how far we’ve come since the Asian financial crisis, we are in a much stronger position right now,” he said.