Philippines catches eye of S. Korea investors
More South Korean investors are expected to invest in the Philippines after a credit-rating firm based in Seoul upgraded its outlook on the country from “stable” to “positive.”
A positive outlook suggests a probability that the Philippines’ present credit rating of BB+, which is a notch just below investment grade, may be upgraded within the short term.
NICE Investors Service Co. Ltd. said that when it made the decision to revise its outlook on the Philippines, it took into account the government’s improving fiscal situation, the country’s rising reserves of foreign exchange, and strength of its economy.
The factors indicate that the Philippines has an improved capacity to settle its debts to foreign creditors, NICE said.
On the fiscal front, the recent implementation of the new Sin Tax law, which raised taxes on cigarettes and alcohol, reflected the Aquino administration’s commitment to shoring up revenue collection.
NICE likewise cited the strength of domestic demand in the Philippines that allows it to weather the problems of an ailing the global economy.
Domestic demand is being fueled partly by remittances from overseas Filipino workers and investments in the business process outsourcing (BPO) sector.
“Solid private consumption and BPO industry expansion have led service business-centered economic growth. Consumption based on remittances is robust enough to absorb external shocks to some extent,” NICE said in its report.
“Solid private consumption and BPO industry expansion have led service business-centered economic growth. Consumption based on remittances is robust enough to absorb external shocks to some extent,” NICE said in its report. Michelle V. Remo