Palace cites reasons for Moody's credit rating upgrade

ABS-CBN News

Posted at Dec 11 2014 11:06 PM | Updated as of Dec 12 2014 07:06 AM

MANILA – Malacanang on Thursday welcomed the decision of Moody's Investors Service to again upgrade the credit rating of the Philippines to Baa2, a notch higher than the minimum investment grade of Baa3.

Presidential spokesperson Edwin Lacierda said the development reaffirms the Aquino administration’s philosophy that “good governance is good economics.”

“With these upgrades comes increased fiscal flexibility, and the Filipino people can be assured that our administration will continue channeling these gains towards the benefit of the broader spectrum of society, as we continue to tread the straight path towards a Philippines that is more prosperous, progressive, and inclusive,” he said in a statement.

Department of Budget and Management Secretary Butch Abad, meanwhile, described the credit rating upgrade as a “reaffirmation of the country’s strong economic fundamentals and its positive growth prospects, even in the face of the past year's challenges.”

"The Moody’s upgrade can definitely be viewed as an endorsement of the fiscal management and reform policies initiated by the administration. Despite the soft GDP growth last quarter due to government underspending and the recent calamities, Moody’s has deemed these difficulties as temporary problems that the country can overcome,” he said.

The Moody’s report cited the country’s improvements in fiscal management as one of the drivers for the upgrade.

“Administrative reforms in the key revenue-collecting agencies, most recently in the Bureau of Customs, have led to revenue growth in excess of nominal GDP growth for a fourth consecutive year,” the report said.

Abad said government will take the ratings upgrade “as a sign to push the Administration’s budgetary reforms further, like the GAA-as-release-document regime, the disaggregation of lump sums in the National Budget, and the Transparency Seal. We’re also addressing bottlenecks in the procurement process, like the creation of new positions under the Bids and Awards Committees (BACs) in key departments to boost government spending.”

He also noted that the parallel efforts are part of the administration’s commitment to boost the country’s economic growth through efficient public spending, improved governance, and key policy reforms.