RP economy gets OK of investment bodies
With the dramatic surge of the Philippine Stock Exchange, investment bodies predict that this is harbinger of better things to come for the Philippine economy.
According to ING Chief Investment officer, Paul Garcia, this is an indication that investors are finally recognizing the Philippines is back in business and that the Philippines is improving on the macroeconomic front. JP Morgan upgraded the country as an "overweight" in the region's stock markets.
JP Morgan's observation find support in the observation of Standard and
Poor, an international debt-rating agency that the Philippines' fiscal performance in the first quarter was better than expected because of the increase in revenue collections.
On the other hand, in its report Standard & Poor's showed an improvement in the credit quality of 19 sovereign governments in Asia, including the Philippines, despite spiraling oil prices and world interest rates.
However, Standard and Poor also pointed out that politics in the country
was stalling economic reforms. Although it gave the country a stable outlook, it noted that while it was expecting another move to impeach President Arroyo, "there is no credible unified opposition" and "no credible alternative government." But "the disruption of any future impeachment effort and general politicking are likely to distract from economic reform," the agency pointed out.
The Philippines also earned a higher score than last year from the latest review commissioned by the California Public Employees' Retirement System (CaLPERS), the United States' biggest pension fund. It commissioned Wilshire Associates to conduct a study that would guide the flow of its investments in 27 emerging markets.
The Wilshire study assigned to the Philippines an average score of "2.13" or 0.13 of a percentage point higher than the "2" threshold rating that Wilshire gave to the Philippines last year. With the score, the Philippines moved up to 14th in raking among the 27 emerging markets included in the study.
Complimenting the performance of the stock market, the Bangko Sentral Ng Pilipinas also reports that gross international reserves (GIR) has reached a new record high of $20.906 billion at the end of April on high gold prices and dollar purchases in the spot currency market.
BSP Deputy Gov. Diwa Guinigundo says the end-April GIR was enough to pay for over four months worth of imports of goods and services and 1.7 times its short-term debt. The GIR is an important indicator for creditors and investors because it gauges a country's ability to pay for its imports and foreign debt.
(PIA6)