Ibon 'pessimistic' about credit rating upgrades — solons

Ibon Foundation, an independent think-tank, has offered the"pessimistic" view that credit rating upgrades will only encourage the government to borrow more, according to two pro-administration lawmakers. In a joint statement Sunday, Representatives Exequiel Javier (Antique)and Rodito Albano lll (Isabela) scored IBON Foundation for saying that credit rating upgrades effected by the expanded value-added tax (e-VAT) are not necessarily good news for Filipinos as these would only push the government to borrow more. Javier is chair of the House committee on economic affairs. On Saturday, Ibon issued on credit rating upgrades, saying: "It will just open and make access to credit easier if and when the government chooses to avail of it." Javier said this negative view is misplaced, especially since investors are now becoming upbeat about the country’s recent economic gains. "Instead of being pessimistic about our looming credit rating upgrades, Ibon should support our government in sustaining the crucial fiscal reforms we worked hard to pass," Javier said. Albano said one may never realize the economic benefits of credit rating upgrades if those who refuse to appreciate them like Ibon Foundation remain blinded by misguided motives and principles. "Let’s be optimistic and open our eyes to the advantages credit rating upgrades can possibly give to us," Albano said. "An upgrade serves as a magnet for investors to infuse capital in our country which will generate more economic activity and opportunity for our people." Albano said every nation strives to improve its economic performance that can convince credit rating agencies to give it higher or better marks. "Here in our country, the credit rating upgrades will reaffirm our economic development and confidence of the international community including creditors and investors. The expanded value added tax and other fiscal reforms saved the country from such damaging repercussions, we are only reaping the fruit of these painful measures." Credit rating downgrades, on the other hand, have a disastrous effect on the national economy. "They narrow our credit options and mean billions more in interest for debt service," Javier said. "They are also a deterrent to fresh investments." - GMANews.TV