IT might be a simple piece of business and financial news, this A-credit rating given to the Philippines by the Tokyo-based Rating and Investment Information Inc. (R&I), but to national leaders who are truly aware and supportive of ways by which the country could attain economic development like House Speaker Martin Romualdez, this news is an important whiff of fresh air.
Speaker Romualdez recently cited the expected benefits such a positive credit rating would give to the Philippines. What the credit rating improvement means for the country, Romualdez explained, is reduced borrowing costs and reduced interest payments for loans.
"The money we can save in the national budget for interest payments, we can use for more financial assistance to our people. That is one way for them to feel economic growth," he added.
He said this is “an encouraging development, an affirmation that the economic and fiscal policy direction of President Ferdinand Marcos Jr. is on track. " The House of Representatives, Romualdez said, would keep supporting the government's economic and prosperity agenda with legislative measures.
The Japanese credit rating agency gave the Philippines a BBB+ mark in 2023, and the credit rating this year is a marked improvement from the previous year.
The latest credit rating that the country received is not the only encouraging piece of information that Speaker Romualdez is happy about.
Earlier this month, the Philippine Statistics Authority (PSA) reported that the country's second-quarter gross domestic product grew 6.3 percent compared to the same period in 2023.
Romualdez pointed out that "this figure aligns with the full-year growth forecast of multilateral lending institutions ranging from 5.9 percent to 6.2 percent."
"I am confident we can attain these numbers. But as I have said, our countrymen must feel the growth of our economy through aid and big funding for education, health, their needs, and other assistance," he concluded.
As Congress became busy scrutinizing the proposed budget of the government for next year, Romualdez also welcomed the news coming from Finance Secretary Ralph Recto that the Marcos administration has ramped up its revenue collection, hitting P2.22 trillion in the first seven months of the current year, or 9.6-percent higher compared to the same period in 2023.
This achievement was made from January to July of this year.
In a Facebook post, Finance Secretary Ralph Recto said the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) had already exceeded their collection targets for the year.
Preliminary data from January to July this year shows that the Tax Bureau collected P1.68 trillion, marking a 13-percent increase from the P1.5 trillion recorded in the same period last year. Meanwhile, Customs collections rose by 6.0 percent to P536.42 billion from last year's P506.5 billion. The government is targeting to collect P4.3 trillion for 2024, with the BIR tasked to generate P3.05 trillion and the Customs accounting for around P1 trillion.
"The BIR will ramp up the implementation of its digitalization programs, intensify its tax enforcement programs, and run after delinquent accounts," Recto said.
For the BoC, Recto said it would continue to improve on its "assessment and collection of duties and taxes on importation, ensure importer's compliance with customs' laws, and strengthen border protection to detect undervalued and misclassified commodities."
He expressed gratitude to both agencies for their ongoing efforts to enhance tax and customs administration, securing essential revenues for public programs and projects.
Recto also expects the government's collections will rise due to accelerated economic growth following the recent interest rate cut by the Bangko Sentral ng Pilipinas (BSP) and the Philippines' credit rating upgrade to A- by Rating and Investment Information Inc. of Japan. The Monetary Board has reduced interest rates by 25 basis points to 6.25 percent, ending the 17-year high of 6.5 percent.
BSP Governor Eli Remolona Jr. is hopeful that the rate cut will significantly impact the country's growth, saying growth could go higher than the lower-end target of the government. Gross domestic product growth came in stronger in the second quarter of 2024 at 6.3 percent, higher than the previous year's 4.3 percent.
These are all positive developments both abroad and locally that make Speaker Romualdez more inspired to push the government’s economic programs through legislation.
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