December 11, 2017

Socioeconomic Planning Secretary Ernesto M. Pernia welcomes the raising of Philippine credit rating to stable or “good quality” (BBB) from the previous BBB- by Fitch Ratings.

“This news is a welcome development especially at a time that we are seeing a sustained improvement in government spending. The upgraded rating reflects the steady and strong economic performance of the Philippines and the firm confidence of investors,” the Cabinet official added.

“This positive outlook and ratings from global credit watchers encourages the whole of government to be more efficient and swift in executing the needed policy reforms, programs and projects laid out in the Philippine Development Plan 2017-2022,” he added.

“We urge everyone to support the critical reforms like the tax and other regulatory reforms needed to sustain and even ramp up economic growth,” he said.

The administration is expecting that the Tax Reform for Acceleration and Inclusion Act or TRAIN will be implemented as soon as it is enacted into law before year-end. “This tax reform package will boost the country’s revenue-to-GDP ratio, fund the Build, Build, Build program, and also increase the spending capacity of the poor and the working Filipino,” Pernia said.

The Build, Build, Build program is expected to ratchet up public construction spending in line with the government’s target to raise infrastructure spending to reach up to 7.4% of GDP by 2022. This will intensify investments on public infrastructure to improve connectivity and ease the cost of doing business in the country.

“More than this, on our part, we are pushing for ease of entry of foreign investments to take advantage of foreigners’ interest in our country,” Pernia said.

Taking action from the President’s directive to take immediate steps to ease restrictions on certain investment areas, the Economic Development Cluster (EDC) recently approved the recommendations of the 11th Regular Foreign Investment Negative List (RFINL).  The recommendations cover easing of restrictions on practice of professions, mass media, communications, educational institutions and health-related sector.

Pernia said that the Fitch forecast of Philippine GDP growth of 6.8 percent affirms that the country’s economic performance will be consistent, as the economy is poised to be one of the fastest- growing in Asia.

In Fitch’s release today, the rating indicates that “expectations of default risk are currently low” and “capacity for payment of financial commitments is considered adequate” but “adverse business or economic conditions are more likely to impair this capacity.”

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