MANILA, Philippines - President Aquino said he is optimistic and expects a credit rating upgrade from global credit rating agencies anytime soon, in light of the significant improvement in the country’s business climate, owing to economic reforms he initiated.
“In capital market, the Japan credit rating agency has already upgraded the outlook of our debt from stable to positive,” he said during the 32nd national conference of the Employer’s Confederation of the Philippines at the Marriott Hotel in Pasay City.
This in the midst of the country’s improving fiscal situation and declining debt-to-economic output ratios, brought about by renewed confidence in the business sector, where he is observing a policy of leveling the playing field.
The confidence in the business climate has already been translated into direct investment in manufacturing, energy, and tourism. These projects, in turn, will require hiring thousands of workers giving Filipinos opportunities to have jobs and sustain the growing economy.
“Finance Secretary (Cesar) Purisima has already met with the other ratings agencies as well making the case that our rating be further improved and we are confident that they will be improved enough in the future. This is important because this will reduce the cost of our external borrowings and give us wider access to outside markets,” he said.
Purisima was in New York and Washington recently separately meeting with the representatives of the three debt watchers – Moody’s Investor Service, Fitch Ratings and Standard & Poor’s (S&P).
Given the government’s present goals, Purisima said the Philippines deserves a credit rating upgrade from the three major global rating agencies.
The Philippines has a rating that is three notches below investment grade by Moody’s and two notches below investment grade by Fitch and S&P.
The government reported last week a first quarter deficit of P26.197 billion or way below the ceiling of P112 billion for the period. This was attributed to improved collections by the two main agencies and prudent spending by the government.
These numbers have helped strengthen confidence by the business sector and this confidence can be seen in both the capital market and direct investments, according to the President. He added the stock market is experiencing solid success despite the increases in global oil prices.