Key economic reforms implemented over the past six years in the Philippines will be sustained regardless of who wins the coming presidential elections in May, global debt watcher Standard & Poor’s Rating Services and business group US-Philippines Society said in an investment forum held in New York on March 3.
“Our assumption is that change in leadership is unlikely to reverse the economic reforms in the Philippines,” John Chambers, S&P Sovereign Debt Committee chair, said during the Philippines Business and Investment Forum.
The US-Philippines Society, an organization of business and civic leaders from the United States and the Philippines, shared the same view. Its president, retired ambassador John Maisto, said: “Any incoming administration is expected to keep the good economic policies.”
The Investor Relations Office of Bangko Sentral ng Pilipinas said in a over the weekend the statements of Chambers and Maisto helped address questions over the ability of the Philippines to maintain the economic reforms implemented under the outgoing Aquino administration.
Legislative and administrative reforms over the past six years are credited for helping the Philippines achieve economic milestones, including investment grade sovereign credit ratings and leap in the country’s rankings in various global surveys on competitiveness.
Among the major legislative reforms are the Sin Tax Reform law, the Foreign Banking Liberalization Act, amendments to the Cabotage law, the Tax Incentives Management and Transparency Act, amendments to the charter of Philippine Deposit Insurance Corp., GOCC Governance Act of 2011 and the Philippine Competition Act.
The legislative reforms aim to help institutionalize sound policies that promote business and economic progress.
In addition to the legislative measures are key administrative reforms, including those that rationalize and make more transparent the budget process, strengthening of the Public-Private Partnership program, enhancement and modernization of the procurement processes for better transparency, and initiatives that expand the taxpayer base for improved revenue collection. Chambers said S&P did not see the pending change in leadership disrupting the favorable credit standing of the Philippines. He said whoever won the presidential election in May was unlikely to initiate a reversal of the existing economic and business policy environment, which had proven beneficial to the Philippines.
S&P currently assigns the Philippines a rating of “BBB,” which is a notch above the minimum investment grade, with a ‘stable’ outlook.
Meantime, Maisto said all of the presidentiables seemed to embrace the same overall economic agenda of the Aquino administration, except that their styles in pursuing the same goals could be different.
Maisto said the attractiveness of the Philippines as an investment destination was not affected by the pending leadership transition.