Credit ratings upgrade has little effect on poor Filipinos–Bayan

MANILA, Philippines – Poor Filipinos still remain poor despite the latest credit rating upgrade from Standard & Poor’s (S&P), a militant group said Thursday.

“We don’t see this as having a significant impact on the lives of ordinary Filipinos, especially in terms of rural poverty, the absence of land reform, rising unemployment, and lack of basic industries,” Renato Reyes, secretary general of Bagong Alyansang Makabayan (Bayan), said in a statement.

He said that the credit ratings upgrade does not translate into “jobs and improved livelihood for the people,” just like the claims of economic growth such as the six percent Gross Domestic Product (GDP) growth in the first quarter and the rising stock market index.

The credit ratings upgrade “only means that the lending agencies think the PH government is capable of paying for its debts,” Reyes said. “Big banks are happy that the Philippines has been assiduously paying its debt and increasing tax revenues.”

Reyes said that “85% of government revenues are being used to pay for debt.” He also said that “65% of government expenditures go to debt servicing.”

“This is one reason why the Aquino government refuses to abolish the Value Added Tax on oil and electricity despite the huge burden on the people. The government is using the revenues to pay for debt so that it can secure an improved credit rating. The government would rather please the big banks and lending agencies than provide relief for the people,” Reyes said.

“The Aquino government’s economic program is still heavily reliant on foreign investments, foreign loans and OFW remittances,” he said.

“There is no program for domestic job generation based on internal growth factors. There is only the drive to get foreign investments with the belief that these will generate jobs. The kind of jobs however are low-paying and short-term and do not translate to domestic industrialization,” Reyes said.