The Philippines today once again proved to have a strong economy as Standard & Poor’s, one of the major credit rating agencies in the world, upgraded country’s rating to BBB (stable) which means the country has adequate capacity to meet its financial commitments. This is the highest credit rating Philippines got. “We now believe the ongoing reforms to address shortcomings in structural, administrative, institutional, and governance areas will endure beyond the current administration,” Standard & Poor’s said.
“In turn, we believe the resulting gains in government revenue generation, spending efficiency, and the improvements in public debt profile and investment environment will at least be preserved in the medium term under the next administration,” S&P said. Though Philippine national elections is imminent the agency believes that the country can sustain its economic stability until the next administration.
Finance Secretary Cesar Purisima said, “We are very pleased that S&P has recognized the Philippines’ remarkable economic comeback.” He added that this 18th positive rating for the country is due to President Aquino’s belief to ‘good governance is good economics’. Budget Secretary Butch Abad also noted that “the positive outlook on our investment position will in turn significantly aid our ability to generate more jobs and livelihood opportunities.”
This investment status of the Philippines will generate more investments from other countries, and will boost confidence of current and planning foreign investors.
“This feat is a reflection of the soundness of the fundamental aspects of our economic strategy, which have led to many successes that were achieved despite drawbacks such as the wave of natural and man-made disasters that hit the country,” said Senate President Franklin Drilon noting that the administration’s dedication to fight corruption is now sowing its fruits not only by means of democratic health, but also most specially for our economic condition.
The very first to benefit in this economic upgrade was Philippine Stock Exchange Index which soared +1% reaching an eleven-month high. “The credit-ratings upgrade is a bullish signal for stocks,” says Jerome Gonzalez, head of research at Manila-based Philequity.
Moreover, Philippine Gross Domestic Product (GDP) for 2013 was the highest among ASEAN countries. It is also projected that in the coming years Philippines will be the 16th largest economy in the world, 5th largest economy in Asia, and the largest economy in the Southeast Asian region.