By Genalyn Kabiling
The government is expected to finalize next week its Miss Universe Catriona Gray-inspired roadmap on attaining “A” credit rating upgrade before 2022.
After the country earned a credit rating upgrade from Standard & Poor’s Global Ratings, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said the government must perform its own “Catriona swirl” that will highlights the country’s sustained economic reforms to secure a higher credit rating.
An inter-agency committee will be organized by the Department of Finance and the Bangko Sentral to craft the blueprint on the “The Road to A” credit rating, he added.
“In short, as in a Ms 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 during a Palace press briefing.
“We have a beautiful narrative of how a sub-investment jurisdiction like the Philippines was able to leap frog 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 as gaze instead,” he added.
The Philippines recently earned a “BBB+” rating upgrade from S&P Global Ratings amid the county’s strong economic growth tractory, a notch away from the coveted “A” territory. A higher credit rating, or the country’s ability to manage and pay debts, is widely seen to improve the country’s attractiveness to investors.
Guinigundo said an inter-agency committee would formalize “a roadmap to articulate and systematize the Philippines’ active pursuit of an A level rating.”
The BSP official added that the government roadmap to A territory should be “finalized by next week.”
“Such a roadmap will evidence the buy-in and commitment of key economic and infrastructure officials to get our efforts properly credited to A before 2022 to help further bring about more benefits to the economy and to our people,” he said.
He said the government would focus on efforts in addressing the issue of increasing per capita income, enhancing potential output such as infrastructure, health and education, strengthening external payment buffers, keeping prices stable, fortifying public finance, and elevating governance standards.
S&P, in a statement last week, explained it raised the Philippines’ credit rating to reflect its strong economic growth trajectory, low public indebtedness, and the economy’s sound external settings. The BBB+ rating is reportedly the highest rating the country has received.
Finance Secretary Carlos Dominguez III said the country’s credit rating upgrade was a “green light” for investors to invest in the country’s fast-growing economy.
“Investor confidence leads to higher growth, will help achieve and sustain upper middle income country status,” he said in the same press conference.
“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.
With BBB+ rating, he noted that the Philippines ranks above Italy and Portugal and a notch below Spain and Malaysia.
Dominguez explained that the President invested his political capital wisely by pushing for “game changing reforms” such as the Tax Reform for Acceleration and Inclusion (TRAIN) and the Rice Tariffication Law.
“Even when critics were noisy, President Duterte chose to throw his full support behind meaningful reform because it would benefit the Filipino people,” he said.
The government has also adopted a more aggressive expenditure program to address the infrastructure gap, supported by tax reform and less reliance on borrowing, he added.
With the latest rating upgrade, Dominguez has pushed for the passage of the second TRAIN package that seeks to incentivize corporate investments in the country.
He also called for the timely approval of subsequent national budget as well as stronger institution and regulatory reforms.