Credit ratings secondary to poverty fight: Dominguez


Posted at Oct 06 2016 12:00 PM

MANILA - President Rodrigo Duterte prioritizes reducing poverty over securing an upgrade on the country's sovereign debt ratings, his finance minister said.

The President, who has said he "doesn't care" about credit ratings, plans to reduce the poverty rate to 17 percent from the current 26 percent within his six-year term, Finance Secretary Carlos Dominguez said.

Dominguez's remarks on the sidelines of a World Bank-International Monetary Fund meeting in Washington was released by his office in Manila on Thursday.

"While we greatly value a ratings upgrade to full investment grade, recognizing the hard work we have put in to achieve fiscal consolidation, this is only of secondary importance. In the economic plans we lay down, rapidly reducing poverty rates rank first priority," Dominguez said.

"Our people expect this. Our government fully intends to meet that expectation. We do not plan on failing the poorest of the poor," he said.

The Philippines secured investment grade ratings with S&P Global Ratings, Fitch Ratings and Moody's Investor Service under Duterte's predecessor, Benigno Aquino III. This gave the country access to a wider market for its bonds.

Last month, S&P said an upgrade was "unlikely" within the next two years with the President focused on his bloody war on drugs and rejecting mounting criticism.

To boost government spending, Dominguez said the government would raise its deficit ceiling to 3 percent of gross domestic product from 2 percent. Infrastructure spending will be raised to 5 percent of GDP, he said.

"We intend to make our economic growth more inclusive. We will achieve this by investing more in our human capital, closing the infrastructure gap that raises the costs of production and trade, and transforming our agriculture so that it becomes a driver of growth rather than the poverty trap it has been," he said.