Palace upbeat on PHL's credit rating upgrade

Malacañang on Friday expressed confidence the country will be able to get another upgrade from the credit rating agencies. "The chances are good. The (rating agencies) have concerns which I believe (our economic team) will be able to address. I'm confident we'll get a positive result," said Ricky Carandang, Presidential Communications Development and Strategic Planning Office head. Also, he told reporters at the Ninoy Aquino International Airport Terminal 2 Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad and Transportation Secretary Manuel Roxas II are still in the United States to talk with the credit rating agencies. Carandang was part of President Benigno Aquino III’s delegation that arrived from the US early Friday morning. He said if one would look at the different ratios that are normally looked at by the credit agencies such as debt to gross domestic products, liquidity ratio, percentage of maturing debt, the Philippines should get a rating upgrade. “If you look at other countries whose debt situation are not as healthy as ours and still have comparable ratings, I think our economic team is gonna go in strong and say, 'look at the numbers we should probably get a credit rating upgrade'," he added. Among the concerns of the credit rating agencies were how the Philippines would be able to sustain spending for the next couple of years with the government trying to ramp up conditional cash transfer and the increases in the agriculture budget next year. Asked whether the economic team will maintain there will be no need to raise new taxes when they talk to the rating agencies, he said, “I won't comment on that for now because I'm not privy to what the discussions will be... but we're taking actions that will give them [credit agencies] the confidence enough to give us a rating upgrade," he said. He said that he is not closing the door to tax increases, but “It’s going to be the last resort, and right now we have not exhausted the other methods of raising new revenues." He hinted that in the coming days, the Aquino administration will announce “some pretty good numbers on BIR (Bureau of Internal Revenue) and [Bureau of] Customs tax collections." Carandang said it is important for the country to get an upgrade because a lot more funds will be available to the Philippines. “Merong mga ahensiya sa ibang bansa na papasok lang po sila kapag ang ratings mo is investment grade or slightly below investment grade, makakuha tayo ng one or two notches, mas dadami ang investors na pwede pumasok sa debt issuances natin," he said. Credit agencies such as Standard and Poor’s, Moody’s, Fitch and the Japan Credit Ratings Agency, gave the Philippines positive rating within the first year of the Aquino administration. — LBG, GMA News