Thursday, 28 March 2013

Arroyo gets credit for investment upgrade

Jun Vallecera Business Mirror FOR the first time, the Philippines has attained investment-grade status, courtesy of the UK-based Fitch Ratings, in the first of an expected series of upgrades seen to result in even more foreign inflows to help accelerate the economy down the line. Fitch Ratings has rated the country’s credit a triple-B minus or “BBB-” from double B plus or “BB +”, indicative of an economy better able to honor its debts whether such were obtained domestically or abroad. Fitch’s analysts credited former President Gloria Macapagal-Arroyo and the role she played in convincing an obstinate legislature that an expanded value-added tax system was key to the country’s fiscal future. Fitch said the much-maligned tax law later resulted in “improvements in fiscal management begun under President Arroyo [which] made general government-debt dynamics more resilient to shocks.” Apart from better fiscal management started under the Arroyo administration, Fitch cited as key drivers to the upgrade the country’s strong external sector, the persistent current-account balance that the watchdog acknowledged as having been fed by overseas worker remittances and the overall resilience of the economy. The agency also cited as additional factors improvements in fiscal management, and the favorable macroeconomic outturns, supported by a strong monetary-policy framework under the Bangko Sentral ng Pilipinas (BSP).

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