Biz groups welcome Moody’s upgrade

MANILA, Philippines - Business groups welcomed yesterday the third investment rating upgrade received by the Philippines, saying the upgrade would make the country more attractive to foreign investors.

The groups said however that to achieve inclusive economic growth, reforms still have to be undertaken by the government.

“Any upgrade is welcome news. Foreign investors will see this as another reason to come in and help sustain the Philippines’ economic growth,” Management Association of the Philippines president Melito Salazar Jr. said in a text message.

He noted though that the third investment rating upgrade received by the country may not be sufficient for actual investments to be made.

“My only worry is that this may not overcome the foreign businessmen’s concern with recent actions of government agencies that are seen as negating contractual obligations and appealing to populist sentiments,” he said, citing the calls for cancellation of contracts with water concessionaires that have been aired by some government

agents earlier. For his part, European Chamber of Commerce of the Philippines (ECCP) president Michael Raeuber said in a text message that “every upgraded

rating helps the Philippines - it reduces the cost of development by lowering interest rates.” He said though that by itself, it does not assure more investments, which are needed for inclusive growth and job generation. “More needs to be done to attract foreign productive investment to achieve employment and inclusive growth,” ECCP executive vice president vice president Henry Schumacher said. The Joint Foreign Chambers and Philippine Business Groups have earlier called on the government to enact business and economic reform laws at a faster pace in order to attract investments. Among the key reforms being pushed are the Cabotage liberalization, competition policy, Customs Modernization and Tariffs Act, amendments to economic provisions of the Constitution, Foreign Investment Negative List liberalization, amendments to the Government Procurement Act, Mining Fiscal Reform, Rationalization of Fiscal Incentives and Transparency and Accountability in Fiscal Incentives. “If the country deepens investment climate reforms, they can expect further international recognition of its progress and more investment,” American Chamber of Commerce of the Philippines legislative committee chairman John Forbes said in a text message. Moody’s Investors Service yesterday raised the Philippines’ credit rating to Baa3 from Ba1 amid the country’s strong economic performance, fiscal and debt consolidation as well as the political stability and improved governance. The rating upgrade given by Moody’s to the country follows investment grade rating upgrades given by other debt raters Fitch Ratings and Standard & Poor’s Ratings Services earlier this year. Trade secretary Gregory Domingo said the latest upgrade “is further affirmation of the Philippine’s  growth and good governance story.” Such, he added, is what is driving investor interest and actual investments higher and higher.