MANILA -- The Philippines’ bid towards an A-level credit rating is expected to get a lift from the International Monetary Fund's (IMF) recommendations for greater competition, foreign direct investments (FDIs) policies, and enhanced public investment management.
RCBC chief economist Michael Ricafort, in a reply to e-mailed questions from PNA, said IMF’s proposals for additional expansionary macroeconomic policy, particularly on public capital and social spending programs, will “help increase/promote more inclusive growth and development over the long-term, thereby would help further reduce poverty and raise incomes and overall living standards.”
On the improvement of public investment management through promotion of greater competition and public access to information in the procurement process, Ricafort said this suggestion will further allow businesses and industries to provide better product quality and service delivery at lower cost.
This will also provide more choices for the consumers “while ensuring that anti-competitive behavior remains in check through the Philippine Competition Commission that enforces anti-monopoly/antitrust laws and regulations”, he said.
“This is also done within the context of protecting vulnerable sectors such as poor and marginalized especially in the agricultural sector that may require more government support/spending and in ensuring that national security especially on sensitive/critical industries, such as those related to ensuring food security, is also always upheld,” he added.
Ricafort said greater transparency also provides a more level playing field for all types of investors amid stronger protection for investors amid stronger institutions and rule of law, while maintaining a balance amid issues related to privacy and intellectual property rights.
“Ensuring a healthy level/balanced competition as well as greater transparency and accountability in line/consistent with global best practices especially on good governance would help boost the confidence of international investors/creditors/donors on the country and help attract more international investments/FDIs, loans, and grants to the country,” he said.
Ricafort said easing restrictions on FDIs will entice more investors to place their funds in the country, which in turn, will increase domestic jobs and business opportunities.
Improvement of the country’s global competitiveness as well as governance standards, among others, he said would all help in strengthening the country's economic and credit fundamentals.
Ricafort said this will “lead to much faster economic growth, accelerating the increase in incomes/per capita GDP (gross domestic product), faster and more inclusive economic development, and further raising overall living standards.”
He further said institution of additional reform measures to increase recurring sources of government revenues, more anti-corruption measures to address leakages on government spending, and ensure more inclusive economic growth and development over the long-term are pluses for the economy.
“All of these are steps in the right direction towards eventually deserving A credit ratings,” he added. (PNA)