AT the annual World Bank-International Monetary Fund Group meeting in Washington, D.C. last week, Finance Secretary Carlos Dominguez 3rd told an audience of credit ratings agency representatives that securing higher credit ratings for the Philippines was only “a secondary concern” for the Duterte administration, the “first priority” being poverty reduction. All three major credit ratings agencies – Moody’s Investor Services, Standard & Poor’s (S&P), and Fitch Ratings – currently give the Philippines ratings that are at or just a step above the lowest investment grade. While the government’s anti-poverty drive is admirable, we would have rather heard Dominguez give the country’s sovereign credit rating a bit more importance than to describe it as a “secondary” consideration. With higher credit ratings, the costs of additional debt incurred by the government to fund programs such as infrastructure development becomes lower, and more investors are available to invest in Philippine debt instruments such as government bonds. While we do not want to see a return to the days of an administration bewitched by credit ratings upgrades as a measure of the country’s economic strength, we would also like to point out that credit ratings are valuable and important.

Source: Manila Times October 08, 2016 16:30 UTC