PHL policies support growth path–Moody’s

The research arm of an international credit watcher lauded the Philippines path toward good government and appropriate policies, and said this would support the growth of the country toward the next year.

In an analysis released by Moody’s Analytics on Tuesday titled “Asean Outlook: Politics Shape 2014,” the research organization said the Philippines, Singapore and Malaysia were geared toward “sustaining long-term growth” through proper government policies in place.

Moody’s Analytics said the improvement of PHL and infrastructure spending, anti-corruption drive and the increase in foreign direct investments (FDI) in the country are the major developments that the economy has benefited from in the past year.

“The Philippines is among the region’s strongest performers over the last two years. The government can claim credit for this, as it has set out a feasible blueprint to improving infrastructure, reducing corruption and encouraging greater foreign direct investment,” Moody’s Analytics said.

The target of the Development Budget Coordination Committee (DBCC) on infrastructure spending is at around 3.2 percent of the country’s gross domestic product (GDP). The inter-agency organization earlier said it was planning to gradually expand this to reach about 5 percent of GDP in 2016.

The Aquino administration has pledged to reduce significantly the number of incidences of administrative theft and abuse of power in his term under his flagship anti-corruption campaign.

As for FDI, latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the long-term investments made by foreign investors hit $3.36 billion in the first 10 months of 2013. This was significantly higher than the government’s expectation of $2.1-billion net FDI inflows for the entire 12 months of last year.

Moody’s Analytics also said the damage caused by Supertyphoon Yolanda (international code name Haiyan) would likely weigh in the country’s economy up until the first half of 2014.

“However, the recovery effort later in the year and the positive momentum from government reforms should support gains over the next 18 months,” Moody’s Analytics said.

Although Moody’s Analytics said the Philippines has a lot more work to do to be at par with Singapore in terms of its high ranks on international surveys, the Philippines—along with Malaysia are seen to have made “progressive strides” on the fiscal front over the last years. –Bianca Cuaresma, Businessmirror