A first in history: PH gets investment grade

(UPDATE) The Philippines bagged a landmark vote of confidence as global debt watcher Fitch raised the country's credit rating to investment grade Wednesday.

For the first time in history, the Philippines is deemed as an economy where it is safe for global investors to pour in capital.

Fitch Ratings said the country's long-term foreign-currency issuer default rating (IDR) is now up to BBB- from BB+. The long-term local-currency IDR has likewise been raised to BBB from BBB-.

An investment grade is seen to lower the Philippines' borrowing cost, thereby increasing opportunities for the government to save.

Related story: Why Aquino vetoed Magna Carta for the poor 

"The Philippine economy has been resilient, expanding 6.6% in 2012 amid a weak global economic backdrop," Fitch said in a statement posted on its website.

Key drivers for the credit rating hike, Fitch said, are strong external balance sheets, a persistent current account surplus and high remittances.

Fitch also lauded reforms implemented under the previous and present administrations, which it said led to "favorable macroeconomic outturns."

"Improvements in fiscal management begun under President Arroyo have made general government debt dynamics more resilient to shocks," Fitch said.

Fitch is the first debt watcher to give the Philippines an investment grade, even as two other rating firms place the Philippines only a notch lower.

Standard & Poor's considers the Philippines a BB+ market at present while Moody's Investors Service gave it a Ba1 rating.

Related story: More women hold diplomas vs. men

Welcoming the long-awaited credit rating upgrade, President Benigno Aquino III said the development will "encourage even greater interest and investments in our country."

"This is an institutional affirmation of our good governance agenda," Aquino said in a statement posted on the Official Gazette.

"Sound fiscal management and integrity-based leadership has led to a resurgent economy in the face of uncertainties in the global arena," he added.

Also commenting on the upgrade, Asian Development Bank Country Economist Norio Usui said it "can trigger the kind of investment that will help carry the country into its next phase of development."

"Prudent measures to attract investment, improve the business climate and diversify the economy have paved the way for growth," he added.

The ADB official however challenged authorities "to make that growth more inclusive by creating more and better jobs."

Related slideshow: Bustling Manila

Traders at the Manila Stock Exchange chat in front of an electronic board on January 31, 2003. Asian markets were mixed following another strong lead from Wall Street, where traders took heart from ... more 
Traders at the Manila Stock Exchange chat in front of an electronic board on January 31, 2003. Asian markets were mixed following another strong lead from Wall Street, where traders took heart from more upbeat US jobs numbers less 
1 / 3
AFP News | Photo By Joel Nito
Fri, Mar 15, 2013 7:17 PM PHT

 

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • China ignores global outcry vs reclamation
    China ignores global outcry vs reclamation

    On Wednesday, G-7 foreign ministers issued a Declaration on Maritime Security expressing alarm over “unilateral actions, such as large scale land reclamation, which change the status quo and increase tensions” in the region. In their communiqué, which did not specifically mention China, the ministers expressed belief that reclamation activities were meant to “change the status quo” in the West Philippine Sea and South China Sea, through which 40 percent of global trade passes. …

  • Project NOAH exec receives recognition
    Project NOAH exec receives recognition

    Project NOAH executive director and University of the Philippines professor Mahar Lagmay recently received recognition from the European Geosciences Union (EGU) for his work in disaster risk reduction and mitigation in the Philippines. …

  • Nightclub ban for US troops
    Nightclub ban for US troops

    The US Pacific Command has banned its troops in the Philippines from bars and nightclubs, a spokesman said yesterday, with the trial under way of a US Marine accused of murdering a transgender Filipino he met in a bar. Thousands of American and Filipino soldiers will kick off tomorrow the 10-day annual military exercises, according to Capt. Alex Lim, a spokesman for the US forces, but there will be strict controls on their free time. Lim would not say why the restrictions were imposed but …

  • US-Phl war games to start under China’s shadow
    US-Phl war games to start under China’s shadow

    Thousands of American and Filipino soldiers will kick off tomorrow expanded wargames, showcasing a deepening  defense alliance as alarm bells ring over China. The 10-day exercises in the Philippines are an annual affair between the longtime allies, but this time they will involve double the number of soldiers as last year in a sign of their expanding military partnership. The Philippines is seeking more US military and diplomatic support to fend off China’s increasing forcefulness in its bid …

  • Palace defends legal tack in sea row
    Palace defends legal tack in sea row

    There is nothing weak about taking the legal and diplomatic approach to push for the country’s claims in the disputed West Philippine Sea, Malacañang maintained yesterday. On Friday, Bayan Muna Rep. Neri Colmenares led a rally in front of the Chinese consulate in Makati City to protest China’s massive reclamation activities in the Spratly island group to fortify its presence in the disputed waters. Colmenares also criticized the Philippine government for supposedly not doing enough to defend …

  • Veloso sons urge authorities to save mother from death
    Veloso sons urge authorities to save mother from death

    The sons of Mary Jane Veloso, who is facing execution in Indonesia for drug smuggling, yesterday appealed to government officials to do everything to spare their mother from death. “We love you,” Mark Daniel, 12, said when asked for a message for his mother following a press conference at the University of the Philippines in Diliman, Quezon City. Mark Daniel, an incoming Grade 8 student, reiterated his appeal to those in power to help save his mother from death. His younger brother, …

  • US-Philippines wargames to start under China's shadow
    US-Philippines wargames to start under China's shadow

    Thousands of American and Filipino soldiers on Monday will kick off expanded wargames, showcasing a deepening defence alliance as alarm bells ring over China. The 10-day exercises in the Philippines are an annual affair between the longtime allies, but this time they will involve double the number of soldiers as last year in a sign of their expanding military partnership. The Philippines is seeking more US military and diplomatic support to fend off China's increasing forcefulness in its bid …

  • Bar ban for US troops in Philippines amid murder trial
    Bar ban for US troops in Philippines amid murder trial

    The US Pacific Command has banned its troops in the Philippines from bars and nightclubs, a spokesman said Saturday, with the trial under way of a US Marine accused of murdering a transgender Filipina he met in a bar. Thousands of American and Filipino soldiers will on Monday kick off 10-day annual military excercises, according to Captain Alex Lim, a spokesman for the US forces, but there will be strict controls on their free time. Lim would not say why the restrictions were imposed but …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options