Mobile No. 0916-6406737 / 0918-9120137

29 September 2011

 

         

         

          It is not accurate for Budget Secretary Florencio Abad to claim in today’s Malacañang press briefing that the recent credit upgrades of the Philippines constitute the “most objective assessment” of how prudent and responsible the national budget is formulated.

 

          The import of the budget is only one of the many bases and variables used by credit rating agencies to determine a country’s capacity to pay its debts.

 

          It is also inaccurate to equate the credit upgrades of the Philippines to a recommendation for foreign investors to locate in the country because no less than the President himself has admitted that the upgrade of the Philippines is limited to a “non-investment grade”.

 

          Moreover, it should be understood that an upgrade is the result of cumulative positive economic development and reforms over a period of time, not only on the basis of an overnight achievement.

 

          Rating agencies admit that they only give upgrades after years of fiscal improvement, and not a few months of gains like savings which are mostly contrived.