PHL now more attractive to investors, to copy Catriona Gray for 'A' level credit rating goal —gov’t

Finance Secretary Carlos Dominguez III said Wednesday the latest credit rating upgrade for the Philippines by global debt watcher Standard & Poor's was an indication that the country is now more attractive to foreign investment.

S&P Global Ratings last week raised its sovereign long-term credit rating for the Philippines to “BBB+,” two notches above the minimum investment grade and one step closer to the coveted “A” rating.

"Standard and Poor’s upgrade last week indicates that the Philippine government has further improved on its ability to pay back its long term debt. A higher investment grade credit rating also signals to international investors that the Philippines is now a more attractive investment destination," Dominguez said at a news conference in Malacañang.

He added that investors will now require lower rates of interest and returns for Philippine bonds and stocks and that the private sector can also more easily and affordably tap international sources of funding.

"The upgrade is a green light to invest more in our fast-growing economy. More foreign direct investments means more jobs, increased productivity, higher incomes for our people. Foreign direct investments will help us sustain our rapid growth and make it more inclusive," he said.

S&P cited the Philippines’ strong economic growth and sustainable public finances for the ratings upgrade.

The credit watcher said it may raise the ratings over the next two years if the Philippine government makes significant progress in its fiscal reform program, the country’s external position improves, and institutional settings improve markedly.

The Philippines is training its sights on securing the "A" credit rating before 2022.

To achieve this, the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF) would organize an inter-agency committee that would "formalize a roadmap to articulate and systematize the Philippines' active pursuit of an A level rating," according to BSP Deputy Governor Diwa Guinigundo.

Guinigundo said they will take a page out of Miss Universe 2018 Catriona Gray's playbook.

"In short, as in a Miss Universe contest, we must do a Catriona swirl to be noticed, to be set apart from the rest, because indeed like Catriona, we have something beautiful to show them," he said of the fourth Filipina to bag the prestigious beauty title.  

"We have a beautiful narrative of how a sub-investment jurisdiction like the Philippines was able to leapfrog to an investment grade that is now just one notch away from the A category. Then, the credit rating agencies like the judges in a beauty contest will be able to sustain their glance and give us a gaze instead."

The BSP official said efforts will be made in addressing issues raised by S&P and other credit rating agencies such as Fitch and Moody’s. These include further increasing the per capita income, enhancing potential output, strengthening external payments buffers, keeping prices stable, fortifying public finance, and elevating governance standards. 

"We shall be doing things for the sake of our people. If these efforts start bearing fruits that are good to eat, then the upgrade will just logically be a consequence," Guinigundo said. — MDM, GMA News