BUSINESS R&I revises PH credit outlook to ‘positive’

By Julito G. Rada

Japan-based debt watcher Rating and Investment Information Inc. affirmed the Philippines’ investorgrade credit rating at “BBB+” but revised its outlook to positive from stable, citing the country’s robust macroeconomic fundamentals, improving fiscal position, sound banking system, comfortable external payments position and stable political environment.

Finance Secretary Benjamin Diokno said Monday R&I’s improved outlook on the Philippines brought it closer to its goal of an “A” investment-grade rating within the term of President Ferdinand Marcos Jr.

In Brief

PEZA investments soared

332% to P97b in 7 months

INVESTMENTS pledges received by the Philippine Economic Zone Authority soared 332 percent in the first seven month of 2023 to P97.16 billion from P22.48 billion in the same period in 2022.

PEZA director-general Tereso Panga said the new investments were projected to yield $747 million in exports and generate 18,407 new jobs.

“Among the bright prospects for the Philippines and the ecozones include our 6 to 7 percent GDP growth target, our ascension to RCEP [Regional Comprehensive Economic Partnereship] and other FTAs [free trade agreements], the 5 to 15 percent annual growth target by the industries, the Marcos administration’s efforts to increase our credit rating and our aggressive investment promotions,” he said.

Data showed that in July, investments from 15 new and expansion projects amounted to P16.57 billion with projected export values of $419.5 million and employment opportunities of 2,983 jobs.

Panga said PEZA was counting on the Office of the President to approve new and expanding economic zones. The OP approved on July 25 three new economic zone projects with combined investments of P750.38 million.

“We remain committed in our overarching goal of spurring countryside development through the creation of more ecozones seen to facilitate growth and development of our regions and attract new and strategic investments in the country,” Panga said. Othel V. Campos

PSBank’s first-half income rose to P2.17b

PSBANK, the thrift banking arm of the Metrobank Group, posted an 18-percent increase in first-half net income to P2.17 billion from P1.84 billion in the same period last year.

PSBank president Jose Vicente Alde said the bank benefitted from the continued expansion of the economy and the sustained growth in consumer demand through its recalibrated strategies and focus on enhanced customer experience.

“We are hopeful, despite the external headwinds, that this can be sustained for the rest of the year,” Alde said.

The first-half performance translated into a higher return on equity of 11.4 percent from 10.4 percent a year earlier.

The continuing uptrend in the bank’s consumer loan releases, improvement in credit quality and gains realized from productivity and efficiency initiatives further strengthened the bank’s platform for sustainable earnings in the post-pandemic era. Julito G. Rada

“We are firmly on track to our ‘Road to A’ and remain committed to further improving the country’s investment climate through structural reforms to enhance the quality and pace of infrastructure development,” Diokno said.

A “BBB+” rating is two ranks higher than the minimum investment grade and a notch below the ‘A-’ rating.

A positive outlook indicates the possibility of a rating upgrade once performance indicators such as the economic growth sought under the Philippine Development Plan 2023-2028, stable macroeconomic conditions and improving trend of fiscal position have been confirmed.

Diokno said the government is steadfast in its commitment to fiscal consolidation through the first Medium-Term Fiscal Framework which will help bring down the debt-to-GDP ratio to less than 60 percent by 2025, cut the deficit-toGDP ratio to 3.0 percent by 2028 and maintain infrastructure spending at 5 to 6 percent of GDP.

This will be implemented alongside the strategies outlined in the PDP 20232028 to reinvigorate job creation and accelerate poverty reduction by steering the economy back on a high-growth path.

Moody’s Analytics said the Philippine economy performed well amid the volatile global landscape, citing its decelerating inflation rate and strong private consumption and investments.

R&I also noted that the country’s strong gross domestic product performance in 2022 of 7.6 percent―a 46year high.

The Philippine economy grew by 6.4 percent in the first quarter of 2023, making it the fastest-growing economy among R&I-rated peers such as Indo-