The Philippine government may wipe out its debt in 10 years, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said in an investment forum in New York over the weekend.
Guinigundo said the declining debt to gross domestic product ratio was among the factors why credit rating agencies Standard & Poor’s, Moody’s Investors Service and Fitch Ratings awarded the Philippines with investment-grade ratings.
The country’s debt to GDP ratio fell to 45.4 percent in 2014, from as high as 97.7 percent in 1986. Guinigundo said based on the trajectory, the debt to GDP ratio was expected to fall to 0 percent within the next 10 years.
Guinigundo, however, said “there is no magic number with regards to any country’s debt to GDP ratio. The emphasis must be placed on the fiscal space and the government’s ability to spend in terms of investment and infrastructure.”
Guinigundo was one of the keynote speakers at the Economic Briefing and Investment Conference held on June 26 at Goldman Sachs in New York City.
Finance Secretary Cesar Purisima said during the same briefing the Philippines had transformed into a prime destination for foreign capital in recent years and was now a bright spot in Asia.
“The Philippines is not perfect, nor is it completely efficient, but to investors like you, it is an opportunity. In fact, many companies are already silently making money,” Purisima said during the second leg of the investment roadshow in the US called “Invest in the Philippines: Asia’s Bright Spot.”
Different Philippines agencies also expressed significant improvements in the country in terms of macroeconomic governance, promoting transparency, enhancing the ease of doing business and focusing on infrastructure development.
Purisima said these factors combined with competitive workforce had increased the attractiveness of the Philippines in the eyes of foreign investors.
BPI Capital Corp. president Dennis Montecillo agreed with the bullish assessment, saying that there was a noticeable shift in the demand for foreign private equity.
Philippine officials and private businesses pointed to good governance as the main driver of economic growth.
Trade Secretary Gregory Domingo and National Competitiveness Council co-chair Guillermo Luz highlighted the Philippines’ steady rise in competitiveness rankings and assured the audience that liberalization and economic reforms would continue.
