Philippines' credit rating upgraded, BUT...

In the news today, the Philippines' credit rating was upgraded by the Japan Credit Rating Agency from stable to positive outlook, a testament to the country's macroeconomic and fiscal stability.  Finance Secretary Cesar Purisima said "I am confident that the Philippine economy will be able to sustain its growth momentum, attract more investments, and create more jobs.  Things are definitely looking up for the Philippines in the medium term."  This upgrade follows the one by Standard & Poor's in November 2010 and then by Moody's in January this year.


Looking good so far, yes?

In other news today, the International Monetary Fund (IMF) is starting to worry about the extraordinarily large capital flows into Asia's surging economies, including China, Indonesia, and the Philippines.  The region's economies were expected to grow almost 7% this year and more in 2012, leading the global economic recovery.  Capital is expected to continue flowing into Asia in 2011 and 2012, fueled by abundant global liquidity and risk appetite and attracted by the region's strong growth prospects.  Unfortunately, this means inflation is also rising as foreign capital from investors seeking better returns on their money are dumping their considerable resources in Asia.  Anoop Singh, director IMF's Asia and Pacific department told a press briefing in Hong Kong yesterday that "The challenge is to ensure this surge remains sustainable."


So at least, in the medium term, it's still a rosy outlook for the Philippine economy, as well as for the rest of Asia.  Let's just hope our finance officials stay on top of it.  If they don't drop the ball, we could be looking at a very good business climate for some time to come!




Don't quit your day job,


Jon