Legarda Hails PH Credit Outlook Upgrade to Positive

Senator Loren Legarda today welcomed 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, Chair of the Senate Committee on Finance.

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.

Legarda noted that with the S&P’s growth forecast for the Philippines, we could expect for a further upgrade in the country’s credit rating. A higher investment grade credit rating would mean increased investment inflows and can subsequently lower the cost of borrowing in foreign currencies.

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 foreign direct investment (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.

“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, inflow of FDIs, and consistent fiscal policies geared towards a sustained decline in the gross general government debt ratio to invite a more robust trade relations with other countries,” Legarda concluded.