MANILA, Philippines - The unexpected smooth results of the country’s first automated elections held last week may increase the country’s chances of getting a credit rating upgrade, Finance Secretary Margarito Teves said.
However, he stressed that credit rating agencies would be looking at how the new administration would address the country’s fiscal sustainability.
“They are expected to be meeting with the new economic team,” said Teves.
Teves said improving the country’s fiscal position by raising new revenues would “increase the opportunity for an improved rating.”
At the same time, he stressed that any adjustment on the country’s ratings depends solely on the debt watchers themselves.
Moody’s Investors Service has said that the unambiguous victory of Aquino sets a favorable tone for the country’s credit fundamentals.
“A clear-cut triumph would remove the undercurrents of political illegitimacy that had accompanied the incumbent administration of Gloria Arroyo and had hamstrung its policy agenda…Indeed, the success of the first fully automated polls in Asia on Monday is at this time of greater relevance than the result itself, implying a strong mandate to govern for the victor,” Christian de Guzman, Moody’s assistant vice president and analyst said.
Moody’s stressed that the government still has a relatively large amount of debt and that challenges on the fiscal front remain.
“Looking ahead, our concerns continue to center on whether the new administration can arrest the trend slippage evident in revenue performance, and which has been exacerbated by the downturn in macroeconomic conditions during the global crisis, the stalled state of reform, and the passage of revenue-eroding measures,” De Guzman said.
The last rating action on the Philippines by Moody’s was taken on July 23, 2009, when Moody’s raised the country’s ratings to Ba3 from B1 with a stable outlook.
“Last year’s upgrade of the sovereign rating was prompted by the country’s strong external payments position and stability in the banking sector. These factors are expected to continue to provide support to the Philippines’ rating this year and next year,” Moody’s said.
Last March 29, the debt watcher said that prospects for the economy remain “good” but that there were a number of crucial challenges such as a “dearth of investment spending relative to its rating and regional peers.”
Updated May 17, 2010 12:00 AM
By Iris C. Gonzales
(The Philippine Star)
No comments:
Post a Comment