Debt-watcher Moody’s Investors Service said the Philippine economy is expected to sustain its robust growth pace in the next few years on the back of the government’s infrastructure plan, AP reported. In a statement, Moody’s said that the government’s credit profile is supported by a large and fast-growing economy and continued gains in debt affordability, in part because of revenue reforms. “These positive features are balanced against low per capita incomes and low revenue-raising capacity when compared with other Baa-rated countries,” Moody’s said referring to the country’s investment grade credit ratings. Moody also noted the country’s strong domestic demand and the economy’s limited reliance on foreign sources of financing, which shielded the Philippines from the direct impact of abrupt changes in the global macroeconomic and financial environment. “Strong gross domestic product growth could accelerate even further, especially if the government achieves higher spending on infrastructure,” Moody’s said. The rating agency also expects further progress on improving public revenue on the back of additional reforms and ongoing enhancements in tax administration, which would also help keep government debt stable.
