BSP exec sees investment grade rating soon

The Philippines may soon enjoy a surge in foreign direct investments given the likelihood that the country will get an investment grade within the short term.

This was the view of Governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas, who said the Philippines would soon be a major recipient of FDIs in Southeast Asia once the country’s credit rating has been upgraded to investment status.

“We can expect investment grade sooner rather than later,” Tetangco told reporters. “This should open the country to more foreign direct investments of the structural rather than just the flight kind, which should help in building infrastructure that would secure long-term and sustainable growth.”

The latest rating action for the Philippines was by Standard & Poor’s, which earlier this month raised its credit rating for the country from two notches to just a notch below investment grade. The new rating by S&P was the same as that of Fitch Ratings. Moody’s Investors Services rates the Philippines two notches below investment grade.

The country’s economic managers are pitching for an investment grade for the Philippines. The confidence that the country will soon be getting investment-grade status is anchored on macroeconomic indicators, which officials said were comparable to those of countries already enjoying investment-grade ratings.

The Philippines is one of the several countries that managed to sustain economic growth even at the height of the global economic turmoil in 2009. In the first quarter of this year, the Philippine economy grew 6.4 percent, the second-fastest growth in Asia after China’s 8.1 percent.