Reforms prompt ratings upgrade
THE Philippines has joined the ranks of Asian economies that have won upgrades for their macroeconomic reforms and economic achievements from Moody's Investors Service or Standard & Poor's (S & P).
Moody's yesterday upgraded the foreign-currency debt rating of the Philippines from Ba3 to Ba2, citing the country's improved economic and political fundamentals since it was first rated in July 1993.
'Renewed growth led by exports and investments, an enhanced policy framework, and the political consolidation behind the government's reform agenda, have strengthened the Philippines' overall payments position and bode well for the prospects of steady sustainable growth,' the agency said.
It warned that the incipient Philippines' recovery would be constrained by a low domestic savings rate, infrastructural weakness, and high external and internal debt.
Real gross domestic product had more than doubled in 1994 to 4.3 per cent, and part of the credit must go to the government's structural adjustment policies to deregulate and liberalise the economy, Moody's said.
'While it is still too soon for many of the reform measures to have made a measurable impact, the direction of policy has sparked confidence in the economy, and led to a resurgence of both domestic and foreign investment,' the rating agency said.
The agency said it expected the government to proceed with new revenue-generating and expenditure-cutting measures to sustain the improvement in its fiscal balances.
S & P recently lifted Singapore's senior debt rating to AAA, and last month upgraded Indonesia's foreign-currency rating to BBB.
In March, Moody's upgraded Malaysia's foreign-currency rating while S & P upgraded Malaysia's foreign-currency long-term debt rating in December and also lifted Thailand's long-term foreign-currency rating.
Moody's upgraded India two notches in March and S & P) last week lifted South Korea's long-term foreign rating.
