The economy has started reaping the fruits of the Duterte administration’s efforts to achieve high and inclusive growth through its reform initiatives such as the “Build, Build, Build” program and the Tax Reform for Acceleration and Inclusion Act (TRAIN) as shown by the latest long-term credit rating upgrade obtained by the Philippines from Standard & Poor’s (S&P), according to Senator Loren Legarda.
Legarda, who chairs the Senate finance committee, said that with S&P’s positive outlook on the Philippines, the country can expect a further credit rating upgrade in the future, which would mean increased investment inflows and lower borrowing costs.
“Now that we have reached this far in terms of our credit rating and outlook, I hope that inclusive, resilient and sustainable growth will be the way forward. We should maintain and even improve our strong macroeconomic performance, solid domestic demand, the inflow of foreign direct investments (FDIs), and consistent fiscal policies geared towards a sustained decline in the gross general government debt ratio to invite more robust trade relations with other countries,” she said.
Legarda issued the statement following the latest assessment of S&P, which affirmed the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2’ with outlook revised from stable to positive.
“This just shows that we are on the right path towards sustainable and inclusive economic growth. The Philippines is gradually reaping the fruits of the government’s efforts to implement sound economic policies and usher in more growth through programs such as the ‘Build, Build, Build’ and the TRAIN law,” said Legarda.
In response to the favorable developments on the country’s credit ratings, Finance Secretary Carlos Dominguez III said: “These positive developments reflect the increasing confidence of the international business community in the sustainability of the Duterte administration’s program for high growth and financial inclusion.”
“Credit raters have seen the wisdom of the government’s growth strategy anchored on aggressive spending on infrastructure and human capital development, combined with its pursuit of bold initiatives such as tax reform to help ensure steady revenue flow for such massive investments over the medium term,” he added.
Dominguez said this “affirmation of the effectivity of the Duterte administration’s economic agenda was “a result of good teamwork within the administration and with the Legislature, for the benefit of the entire nation.”
Debt watcher S&P said that the improvement in the Philippines’ credit rating can be attributed to the country’s resilient external position, and strong policy-making framework that resulted in sustainable public finances and solid economic growth.
Just recently, the Philippines was ranked first among the 20 best countries to invest in as published by the website, Business Insider, stating that, “In contrast to declining inflows of FDI to the Southeast Asia as a whole, the Philippines continued to perform well, according to United Nations data.”
S&P stressed that they may raise the ratings if the government’s fiscal reform program leads to further achievements over the course of the next 24 months. However, S&P added that they may “revise the outlook to stable if the reform agenda stalls, if the recalibrated fiscal program leads to higher-than-expected net general government debt levels, or if we deem that policymaking settings have otherwise regressed against our expectations.”
With this, Legarda urged the government to be more aggressive in sustaining the existing fiscal reform programs and come up with more initiatives for a robust economy and better opportunities for the citizenry.
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