S&P rating on RP calls on Noy to create more jobs — solon

The President’s formula might be working, but his allies in the Senate say the results are not enough.

Sen. Ralph Recto said the credit rating upgrade givenby the international rating agency Standard & Poor (S&P)’s to the country poses a challenge for the Aquino administration to create needed jobs and increase the size of the middle class.

S&P recently raised the country’s long-term foreign currency rating from BB to BB+, a notch below investment grade.

The matter was seconded by Sen. Francis Pangilinan, also an administration member in the upper chamber.

Pangilinan said such positive development should be made to yield tangible results such as job generation and improved services to the public.

The said rating, which makes the government an inch closer to investment grade status, was attributed to the declining debt burden and other positive developments in the country’s economy.

Recto, Senate ways and means committee chairman, said the credit upgrade was expected.

“When everyone looks bad, we look good. We did our homework improving revenues, growth and lowering debt to GDP (gross domestic product) ratio. It’s just a matter of time before we attain investment grade,” he said.

As interest rates are expected to further drop and more investments will take place, Recto said “the challenge is to create more jobs and increase the size of the middle class.”

The senator practically noted the feasibility of the government receiving a positive review from global credit agencies if it will be able to exercise fiscal maturity to achieve long-term growths and spare itself from befalling the same fate of some cash-strapped European economies.

Recto made the statement in response to the reported $1-billion loan committed by the government to the International Monetary Fund (IMF).

He said the amount could be better used to bankroll projects that has mass impact such as school buildings, hospitals and other key infrastructures.

“Spending it to boost consumption is the better way to protect us from contagion,” he said.

The senator added said once the economic growth achieves traction, global credit agencies would be happy to give the country a credit upgrade in order for the country to attract more investors.

Senators Gregorio Honasan and Francis “Chiz” Escudero viewed the S&P’s credit upgrade as proof that the country is headed in the right direction.

“We welcome this development and it should serve to firm up our resolve to do even better and ensure that this upgrade is translated into real, tangible results that will be felt by our people through job generation and cheaper goods and better services,” Honasan said.

The upgrading of our credit rating is a positive sign for our economy and development programs, introducing an element which was not present historically: predictability in terms of our economic policies and credibility in the global community,” he added.

Meanwhile, President Aquino thinks otherwise.

Aquino views the S&P rating, one that saw the highest appraisal of the government effort to address financial obligations, as a manifestation that would put to rest doubts on the administration’s commitment to ease poverty.

The President also considers the new economic appraisal as taking the Philippines closer to its much anticipated credit upgrade.

“This is a reaffirmation of the confidence of the international community and of its continued recognition of the favorable developments within our country. S&P cited the increasing fiscal flexibility of the Philippines as one of the key reasons behind the upgrade. Indeed, this fiscal space has allowed us to focus our efforts on investing on both our physical and social infrastructure,” he said.

Aquino cited global economic and financial organizations taking notice of the administration’s hard work geared on a national program embarking on transparency and accountability.

“The upgrade complements several of the country’s positive economic indicators. Our economy had grown 6.4 percent within the first quarter of this year, compared to 4.9 percent in the same period last year. Inflation, too, has eased to 2.8 percent in June 2012, from 2.9 percent last month. Compared to the inflation rate of the same period last year, which stood at 5.2 percent, this is a significant deceleration,” Aquino said.

Aquino also expressed optimism on sustaining application of programs seen as crucial in the government’s bid toward economic growth and parallel result that would see Filipino families getting past the poverty level.

“We are confident that through the sustained application of programs geared towards inclusive growth, our interventions will result in, over the long-term, a continuous improvement of the Filipinos’ quality of life. The Pantawid Pamilyang Pilipino Program (4Ps) has enrolled over 3 million family beneficiaries as of April this year. More of our countrymen now have access to a comprehensive package for education, healthcare and family development,” he explained.

Malacañang cited the convergence of positive economic and social indicators as the result of hard work and government reforms.

“This convergence of positive economic and social indicators is a tangible result of our reforms. We remain committed to strengthening our efforts to ensure that the benefits of our growth are both equitable and inclusive,” Aquino said.

This developed as Philippine stocks, the peso and government bonds gained after the nation’s debt rating raised to its highest level since 2003 by S&P. –Fernan J. Angeles and Angie M. Rosales, Daily Tribune