INVESTMENT GRADE CREDIT RATING
MANILA, APRIL 1,
2013 (PHILSTAR) In the middle of Holy Week,
there was cause for celebration as the
nation received its first-ever
investment grade credit rating.
The landmark upgrade brings down the risks and cost of doing business in this country, which the government hopes will lure more investments and create jobs.
Fitch Ratings, which led other credit rating agencies in giving the upgrade, cited the reform agenda of the Aquino administration and its commitment to fight corruption and promote transparency.
Credit risk is not the only factor considered by investors when assessing where they should put their money.
But the credit rating agencies base their moves on factors that investors also take into consideration.
When rating agencies give the equivalent of a seal of good housekeeping, it sends a strong message that itís safe to do business in the country that is rated investment grade.
Government officials acknowledged yesterday, amid their rejoicing, that the investment grade has to be sustained.
With officials ecstatic over the upgrade, the public is expecting better government services and more jobs from increased investments.
Administration officials have admitted that the fruits of economic growth are not trickling down to the masses.
Growth is also fueled largely by remittances from millions of Filipinos working overseas rather than manufacturing or other economic activities undertaken in the Philippines.
The investment grade will boost efforts to attract more job-generating foreign direct investments.
In recent years, the Philippines has lagged behind most of its neighbors in terms of FDI.
Even the anti-corruption thrust of the daang matuwid administration has failed to stimulate significant FDI, with investors wondering about the sustainability of reforms and fretting over concerns that they have raised to the government for many years.
With the rating upgrade, the government should seize the opportunity to persuade businessmen to translate their confidence in the administration into solid investments.
The investment grade must be
accompanied by measures to make the
Philippines a sound investment
destination, at par with or even better
than its neighbors.