Malacañang Palace welcomes Philippine's investment-grade outlook from Barclays

July 7, 2012: Malacañang Palace on Saturday welcomed investment house Barclays' outlook that the Philippines may achieve investment-grade level in the next 12 to 18 months due to the continued improvement in the economy's fundamentals.

Presidential spokesman Edwin Lacierda said this may complement the government's efforts to set a level playing field to attract more investments, so there will be more funds for social programs.

"The credit ratings will be very positive for us because... it will be an opportunity for foreign investors to look into our country and see the consistency of our policies," he said on government-run dzRB radio.

"Maraming salamat naman (We are very thankful)... we're hoping this will happen," he added.

He said that from the start, President Benigno Aquino III and his economic team and the Bangko Sentral ng Pilipinas already laid down the premises for the economy.

Despite the difficulties of global economy, he said the administration made sure the domestic economy is doing well.

Lacierda also noted the development comes as the government expects greater agriculture production and infrastructure spending in the second quarter of 2012.

On the other hand, Lacierda sought to downplay the role of the Arroyo administration in the upgrade, saying that while there were two upgrades under former President Gloria Arroyo's watch, there are two aspects to foreign credit ratings – fiscal policy and governance.

He said credit agencies recognized the Aquino administration not only for its fiscal policies but for its governance as well.

"They see this president (Aquino) is free, untainted by corruption. They see the consistency of rules being laid out. Most especially transparency ng pamahalaan nakita ang ginagawa, these are consistent with 'tuwid na daan',"  he said.

On Friday, state-run Philippines News Agency cited a research note by Barclays Research hinting at investment grade level for the Philippines in the next 12 to 18 months.

It said Barclays Research also projects an outlook upgrade from Fitch Ratings to "positive" from "stable" in the next three to six months following this week's upgrade by Standard and Poor's (S&P) of the country's rating to BB+ from BB-, which the research note said is "already expected."

But the research note also cautioned that "it may take a little longer for it (the Philippines) to receive such a rating from two out of the three main agencies."

"We remain constructive on the medium-term outlook for the Philippines given its improving political stability, progress in public private partnerships, increasing FDI interest and structural improvements, such as passage of 'sin' taxes by congress and an anti-money laundering bill," the PNA quoted the research note as saying.

GMA News

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