By Joann Santiago
MANILA, March 19 (PNA) — A Palace official on Thursday said fiscal reforms and efforts to further improve Philippines’ competitiveness will continue to be implemented to sustain the economy’s expansion and achieve an inclusive growth in the country.
This after Fitch Ratings on Wednesday affirmed its investment grade ratings on the Philippines on back of sustained improvement of the economy’s fundamentals.
To date, Fitch gives a ‘BBB-‘ for the country’s long-term foreign currency issuer default rating (IDR) and ‘BBB’ for the local currency IDR. Outlook for both ratings are ‘Stable’.
Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma Jr., in an SMS reply to PNA, said the “government is determined to maintain and even improve its current state of competitiveness in the global economy.”
”Fiscal discipline will be pursued, and resources will be deployed in priority areas such as infrastructure so that the high economic growth trajectory necessary for achieving inclusive growth may be sustained,” he added.
Fitch said the Philippine government’s finances is a neutral factor on the country’s ratings.
In 2014, total government revenues rose 11 percent year-on-year to Php 1.91 trillion from year-ago’s Php 1.71 billion due to implementation of various fiscal reforms.
Relatively, full-year deficit fell 55 percent to Php 73.1 billion from year-ago’s Php 164.1 billion and accounted for 0.6 percent of gross domestic product (GDP). This is lower than the programmed share of deficit to GDP, which is two percent.
Continued improvement in the government’s revenue collection further improved the proportion nof the country’s tax to gross domestic product (GDP) to 13.6 percent from 13.3 percent in 2013.
Along with the rise in revenues is the increase in government spending as the administration bids to put in necessary measures to sustain domestic growth.
Total government expenditures amounted to Php 1.98 trillion in 2014, up by five percent compared to the Php 1.88 trillion in the previous year.
Fitch forecasts general government debt to decline further to 34.4 percent of GDP in 2016 from an estimated 36.4 percent at the end of last year.
It cited that the below-target budget gap of the government is due to fiscal discipline and underspending.
Economic managers maintain that that the government is committed to pursue spending especially on social services and infrastructure to ensure that long-term requirements of the country will be met. (PNA)