Cebu biz sector lauds PNoy for 2nd investment upgrade
CEBU, Philippines - With the recent upgrade of the Philippines' sovereign rating to investment grade status by the debt watcher Standard & Poor's Ratings Services (S&P), the local business community lauded the efforts of the Aquino administration on good governance and prudent financial management and urged the Filipino electorate to vote for political leaders who practice the same advocacy this coming May 13 polls.
Last May 2, the Philippines' credit rating went up one notch to BBB- from BB+ with a stable outlook.
Following Fitch Ratings’ upgrade to the same level last March 27, the country has received its second investment grade rating in just over a month.
In its statement, S&P noted that “the upgrade on the Philippines reflects a strengthening external profile, moderating inflation, and the government’s declining reliance on foreign currency debt.”
At present, only Moody’s Investors Service has placed the country one notch below investment grade, at Ba1 with its “positive” outlook.
Cebu Investment Promotions Center managing director Joel Mari Yu welcomed the second credit rating upgrade and applauded the Aquino administration for such accomplishments and confidence in the market.
He, however, stressed out that the country needs better infrastructure, competitive costs, predictable and stable policy environment, and a level playing field in order to lure foreign direct investments (FDIs) further.
“Remember, it is direct investment that generates jobs and purchasing power,” Yu added.
On behalf of the Mandaue Chamber of Commerce and Industry, businessman and chamber’s president Philip Tan gave the recognition to President Benigno Aquino and his cabinet members for another achievement given by the international major credit rater.
“It is normal for any politician to take credit for anything good even if he does not deserve and blame others for something bad that he or she may have been responsible. Let us recognize the leadership of the President and his cabinet for the achievement,” he stated.
He also expressed optimism that Moody’s may follow S&P and Fitch within three months.
He then encouraged the voting public to elect the right leaders who could be able to sustain such good economic performance, not for their self-seeking interests but for the general welfare.
“We cannot improve the economic benefits if the country will stay the same. Even in Cebu, it’s critical to sustain. We have to get the right people in the government . Business is business. Politics is politics,” he said.
Asked if political candidates may take advantage of the investment upgrade to win the votes of the Filipinos, Tan said that “the electorate has to know the difference of the truth.”
Cebu Chamber of Commerce and Industry president Lito Maderazo said that any credit upgrade is always a welcome development, citing the significant impact to the economy includes the lowering cost of money in both private and government borrowings.
An investment grade status, he added, is a positive indicator of a country’s financial condition and management on its financial affairs, thus attracting direct investors from the international community.
He said that FDIs in agriculture, tourism, Information and communications technology, and manufacturing could enable the generation of employment, thus making the economic growth inclusive and sustainable.
He further noted that there is still a lot of work to be done to convince such potential investors to put their money into business ventures in the Philippines.
Areas for improvement that he cited include ease of doing business, less red tape, corruption, better infrastructure, road, power, water, and lesser prohibitions like in land ownership.
Maderazo then urged his fellow Filipinos to vote government leaders who serve as public servants who have proven their integrity and as advocates in good governance.
“I am hoping that our people will realize that good governance means good economy,” he said.
Robert Go, director of Philippine Retailers Association – Cebu Chapter, commended Aquino’s efforts to fight corruption, impose better collection efforts, ensure less leakage on government projects and establish better infrastructure.
“The only politician that can claim credits would be President Aquino himself. This will continue to make Philippines go up and flourish as we improve the political climate which could eventually affect the economy as a whole. This is indeed encouraging to the business communities as well,” he said.
He particularly cited the strong economic fundamentals the Philippines has to deserve the credit rating upgrade from S&P.
These include high surplus, continuous remittance flow from overseas Filipino workers, capacity of the country to pay debts, lower interests, cheapest loan rate, real estate boom, increased market confidence, growth of retailers and local companies due to cheap money, more employment opportunities especially in the countryside and confidence of foreign investors on the Philippine market.
He said that prospective investors are also eyeing Cebu as an ideal investment hub in the country, next to Manila.
To sustain such economic development, he noted that the mining industry could upgrade to exporting semi-process minerals than raw mineral with higher value, the agricultural sector could improve through industrial food processing, higher collection of taxes by the Bureau of Internal Revenue and Bureau of Customs.
Go is also positive that Moody’s shall do the same anytime soon.