BSP: PHL deserves more credit rating upgrades

Because of national government's improving fiscal position, the Bangko Sentral ng Pilipinas (BSP) said the Philippines deserves more credit rating upgrades from global agencies. Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s should take into consideration the prudent spending of President Benigno Aquino III’s administration, BSP Deputy Gov. Diwa Guinigundo told reporters Wednesday. By keeping a rein on expenditures, the Aquino administration was able to improve government’s fiscal position, according to the deputy governor. “The credit rating agencies said the problem was the country’s fiscal position. However, our fiscal position is now improving. If we can sustain that this year and next year, there will be no other reason for credit rating agencies not to grant us an upgrade," Guinigundo said. The Aquino administration has committed to slash the country’s budget deficit to 2 percent of gross domestic product (GDP) starting 2013 until 2016 from 3.9 percent in 2010. This year, the deficit is expected to reach P325 billion. Credit rating agencies should recognize the ability of the Philippines to ride above the economic turmoil in the US and in Europe, said Guinigundo. The financial meltdown that started in the US in 2007 forced the administration of then President and now Pampanga 2nd District Rep. Gloria Macapagal-Arroyo to abandon its commitments to achieve a balanced budget in 2008 and its economic blueprint under the Medium-Term Philippine Development Plan. The BSP is crossing its fingers that the Philippines will get another credit rating upgrade from Moody’s after the country got one from S&P on Nov. 12. S&P on Nov. 12 upped the credit rating of Philippines’ long-term, foreign currency-denominated debts a notch to BB from BB-. BSP Gov. Amando Tetangco Jr. told reporters earlier the country deserves a similar upgrade from Moody’s after successfully surviving the onslaught of the global economic meltdown. “We are hopeful that Moody’s, for instance, will improve the outlook because there’s been significant amount of progress [in] various areas. The market has really gone ahead of the ratings agencies. There needs to be a catch up there," Tetangco said. In 2008, Moody’s upgraded the country’s credit rating outlook to positive from stable. A positive outlook means the possibility of another upgrade looms over the near horizon while a stable outlook does not pertain to any possible changes in the near term. Singapore-based DBS Bank Ltd. believes that the Philippines would receive more upgrades from international credit rating agencies on the back of its improving macroeconomic and fiscal fundamentals. “Looking ahead, the door for more ratings upgrade should be opened if the Philippines succeeds in maintaining its post-crisis positive momentum," DBS said in its report. — JE/VS, GMANews.TV