Phl still underrated despite Moody’s upgrade – Purisima

MANILA, Philippines - Finance Secretary Cesar Purisima said yesterday the Philippines remains underrated despite another credit rating upgrade from Moody’s.

Moodys recently raised its rating on the Philippines by one notch to Baa2 from Baa3 with a stable outlook due to a decline in the country’s debt burden as well as structural improvements in fiscal management.

Purisima welcomed the upgrade of the Philippines’ credit rating but noted that the country is “still a notch underrated.”

He cited President Aquino’s good governance program as the key factor that has fueled the growth of the economy.

“We welcome news of yet another credit ratings upgrade as a recognition of the robust foundations we built through good governance reforms and prudent fiscal management. Four years down this road, we are growing ever firmer in our conviction that good governance is indeed good economics,” Purisima said.

The upgrade marked the 21st positive credit rating action that the country has earned since President Aquino assumed office in 2010.

Purisima likewise credited the wide-ranging reforms implemented by the government’s two top revenue generating agencies to a resurgent Philippine economy.

“Reforms in the revenue agencies has brought the Philippines ever closer to its goal of reaching 16.6-percent tax-to-GDP ratio, as the ratio has now improved to 14.08 percent for the first three quarters of 2014. Revenue collection grew 12.6 percent for January-October 2014, with both the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) posting double digit revenue collection growth for January to October,” Purisima said.

According to Purisima the  BOC is fast becoming one of the country’s best reform stories with collections growing 18.8 percent from January to October this year.

“These efforts have built strong economic fundamentals with which we will continue to fuel our positive growth trajectory. Improving revenue collection and lowering debt service have increased fiscal space to fund critical investments for our people. In just four years, good governance has freed up fiscal space to allow us to almost double our education and public works budgets, to triple our health budget, and quintuple our social welfare budget,”  Purisima said.

Moving forward, Purisima said there’s much work to be done to ensure sustained inclusive growth.

The government, he said, is hoping to craft a  comprehensive and equitable tax reform  to align with other ASEAN members and improve tax administration.

Purisima said the DOF is also pushing for the immediate passage of priority measures pending in Congress.  These include the  customs modernization bill as well as the rationalization  of fiscal incentives.