This month’s sovereign ratings upgrade of the Philippines from international rating agency Standard and Poors is expected to translate into tangible benefits, including more infrastructure and social projects for the government and more jobs for Filipinos.
S & P upgraded the Philippines foreign long-term debt rating by one notch to BBB from BBB- and foreign short debt to A-2 from A-3, with a stable outlook, saying the improved rating reflects the country’s strong liquidity and investment position, and effective monetary policies.
This is the highest all-time credit rating the Philippines has ever received.
The upgrade, according to S & P, was “based on our assessment that even though a change of administration after the presidential elections in 2016 represents some uncertainty for reforms, the risks have shifted toward maintaining the impetus and direction of the process, away from a potential reversal or abandonment ofiadvances achieved to date.
It noted improvements in structural, administrative, institutional and governance reforms in the Philippines.
The more direct impact of the upgrade, however, will come in the form of lower borrowing costs for the government, as the rating upgrade implies an improved ability to repay debts.
“This vote of confidence from international investment analysts … raises our international competitiveness and further increases our attractiveness to foreign investors,” remarked Budget Secretary Florencio Abad.
It will in turn help substantially our ability to generate more jobs and livelihood opportunities, he added.
Last year, the upgrades received by the country from all three major rating agencies — S & P, Fitch and Moody’s – resulted in a 20 per cent hike in foreign direct investments, according to the Bangko Sentral ng Pilipinas (BSP).