Philippines has received an investment grade status upgrade from Fitch ratings which is a sign of the country’s economic improvement.
An international credit rating firm, Fitch upgraded the previous BB+ to BBB- which was based on the improved fiscal management of the country, large remittances from overseas Filipino workers (OFW), foreign exchange earnings of business process outsourcing (BPO) companies and income from tourism.
Philippines’ rating is now paralleled with Colombia, Iceland, India, Morocco and Spain.
It also looked at the country’s 6.6 percent economic growth in 2012 amid a weak global economic status and was credited to government efforts in its anti-corruption and good governance campaign.
The new status will bring more foreign investments in the country, additional job opportunities, further growth of the local stock market, and stronger peso thus creating a more stable economy.
An investment grade also means the Philippines has a strong ability to pay its debt, lowering its borrowing costs, generating savings, which then could be used for other government spending.
However, some analysts say that this good news will not trickle down instantly to ordinary Filipinos especially those belonging to the lower part of the social pyramid, unless they also make an effort in finding opportunities for them to get employed or start a small livelihood.
The country with its leaders should now take the next step in getting further upgrades from other rating agencies such as Standard & Poor’s and Moody’s.
But getting that upgrade would posts further challenges the country has to face.
It must attract more foreign investments, use of taxes properly to fund and improve more infrastructure projects, reduce corruption, create more economic reforms, sustain strong economic growth and have a stronger political will.
