Philippines Seeks to Overcome Moody's Negative Credit Outlook, Vows to Continue Economic Reforms

Strategic Insights -

Despite a recent negative credit rating outlook from Moody's Investor Service, the Philippine government remains committed to its economic blueprint and continues to work towards improving its revenue base and reducing debt levels. Press Secretary Ignacio R. Bunye said that the government takes the mixed outlook as a positive sign, emphasizing the need to sustain focus and track its economic plan. Meanwhile, Standard & Poor's Rating Services revised its credit rating from negative to stable, acknowledging the government's progress in fiscal consolidation and policy continuity.

Key Takeaways:

  • The Philippine government is not disheartened by Moody's negative credit rating outlook, but instead views it as an opportunity to redouble efforts to improve its revenue base and reduce debt levels.
  • The government has made significant progress in fiscal consolidation, according to Standard & Poor's, which has revised its credit rating from negative to stable.
  • Finance Secretary Margarito B. Teves expressed hope that Moody's and other credit rating agencies would change their outlook to stable, but acknowledges recognition of the government's achievements.
  • The Philippine government remains focused on investments and jobs, with Press Secretary Ignacio R. Bunye stressing that the outside world is interested in the country's economy rather than its politics.
  • The government is committed to sustaining its economic blueprint and achieving fiscal consolidation, despite challenges posed by political noise and worries about tax collection.

Statistics:

  • Standard & Poor's maintained its BB+ local currency and BB-/B foreign currency ratings for the Philippines.
  • The government's revenue base has shown significant improvement under the Reformed Value Added Tax (RVAT) system.
  • Tax collection from the RVAT is expected to reach a certain level, but there are concerns that it might fall short of government projections.

Sources:

  • Moody's Investor Service
  • Standard & Poor's Rating Services
  • Philippine News Agency (PNA)
  • Department of Finance (DOF)