First Time in History: Philippines now Investment Grade

I knew this would happen. I was just not expecting it this soon. The Philippines got a landmark vote of confidence as global debt watcher Fitch raised the country's credit rating to investment grade yesterday, 27^th of March, Wednesday.

For the first time in Philippine history, our country is deemed as a place where it is safe for global investors to pour in capital.

An investment grade is also seen to decrease the Philippines' borrowing cost, thereby increasing opportunities for the government to save more money.

Fitch said:

"The Philippine economy has been resilient, expanding 6.6% in 2012 amid a weak global economic backdrop,"

Vital factors for the credit rating increase, Fitch said, are strong external balance sheets, a persistent current account surplus and high remittances.

Fitch also commended the reforms implemented under the previous and present administrations, which it said led to "favorable macroeconomic outturns."

Fitch is the first debt watcher to give the Philippines an investment grade, even as two other rating firms place the Philippines only a notch lower.

Standard & Poor's considers the Philippines a BB+ market at present while Moody's gave it a Ba1 rating.

"Improvements in fiscal management begun under President Arroyo have made general government debt dynamics more resilient to shocks," Fitch said.

Welcoming the long-awaited credit rating upgrade, President Benigno Aquino III said the development will "encourage even greater interest and investments in our country."

"This is an institutional affirmation of our good governance agenda," Aquino said in a statement posted on the Official Gazette.

"Sound fiscal management and integrity-based leadership has led to a resurgent economy in the face of uncertainties in the global arena," he added.

Also commenting on the upgrade, Asian Development Bank Country Economist Norio Usui said it "can trigger the kind of investment that will help carry the country into its next phase of development."

"Prudent measures to attract investment, improve the business climate and diversify the economy have paved the way for growth," he added.

The ADB official however challenged authorities "to make that growth more inclusive by creating more and better jobs."

Source: Yahoo News, Inc.

On a personal note, this is good news for small-time investors like me. This will make our country more favorable to increase in interests and interest rates. Congratulations to the Aquino administration for making this possible.

@NicoCalunia