by: Sarah Joson
Monday, June 22, 2015 |
According to the credit opinion of global debt watcher Moody’s, the Philippine economy continues to remain resilient as it is being driven by strong private consumption and government reforms.
Moody’s recently gave the country an investment grade rating of Baa2, noting that the key components supporting the country’s positive credit standing are macroeconomic stability, strong external payment position, stable and resilient banking system, and well-managed inflation. Moreover, the agency stated that the Philippines’ current fundamentals are the drop in the country’s debt burden and structural improvements in financial management.
The debt watcher also noted that the recent revenue reforms at the Bureau of Customs (BOC) are a crucial factor that boosted government collections - surpassing the nominal output of the nation for the fourth consecutive time.
Revenues from the first four months of 2015 rose by nine percent to P679.6 billion, from P622.9 billion last year.
Outlook for spending remains positive with the five-percent growth seen during the first four months of this year valued at P660.6 billion, compared to P626.1 billion over the same period in 2014. This also led to the year-to-date budget gap of P19.1 billion, which is a huge difference from the P3.3 billion deficit reported over the same period last year.
Furthermore, Moody’s said revenues continue to grow by means of budgetary transparency, making the deficit closer than neighboring countries. In fact, higher growth in the Philippines is said to be sustained by resilient private investment, and remittances from overseas Filipino workers - resulting to strong private consumption. In addition to that, the government’s revenue base is not directly linked to commodity-based receipts.
The agency also pointed out that lower commodity prices could boost expansion through disinflation, as opposed to weaker growth prospects like with the country’s more commodity-dependent rating peers.