MANILA -- An economist of ING Bank Manila forecasts further upgrades by Standard & Poor’s (S&P) of its credit rating on the Philippines after Thursday night’s outlook revision from "Stable" to "Positive."
The debt rater’s latest decision on the Philippines was made on back of sustained improvement of the country’s external payments position as well as institutional and fiscal profiles. To date, S&P gives the country’s long-term sovereign rating an investment grade of ‘BBB’, as well as the short-term sovereign credit of at ‘A-2’.
ING Bank Manila senior economist Joey Cuyegkeng, in a research note issued on April 27, 2018, said S&P’s revision of its outlook on the domestic economy “recognises a more important development; that the monetary and fiscal policy environment has improved. Financial and fiscal reforms are positive strides toward a higher growth path and a more sustainable fiscal sector,” he said.
The economist noted that amid the recent upticks in domestic inflation because of the impact of higher excise taxes on fuel and the newly-introduced excise tax on sugar-sweetened beverages, “the reform measure has enhanced revenues, allowing the government to pursue accelerated infrastructure spending and enhanced fiscal stimulus.”
“A more solid execution of the infrastructure programme would be favourable,” he said, referring to the Duterte administration’s “Build, Build, Build” program, which is expected to spend at least Php8 trillion on infrastructure until the end of the current administration’s term in mid-2022.
Cuyegkeng said reforms instituted by the Bangko Sentral ng Pilipinas (BSP) “also cut intermediation costs and enhance financial stability. We believe that the continued pursuit of such reforms would be successful and avoid downside risks to the country’s credit rating,” he added. (PNA)
