MALACAñANG on Friday admitted that the country still lags in terms of basic infrastructure, services and revenue base despite the “gratifying” decision of Standard and Poor’s to raise the Philippines’ credit rating on account of government reforms.
“We are gratified by Standard and Poor’s decision to raise the Philippines’ credit rating to a notch higher than investment grade, and we are hopeful that this will eventually translate into increased investments, and accelerated jobs generation,” said Presidential Communications Secretary Herminio Coloma Jr.
In his news briefing, the Palace official took cognizance of the credit ratings firm’s position that the Aquino administration still has to improve the narrow revenue base, basic infrastructure shortage and basic government services.
To address the problem on narrow revenue base, Coloma explained that the Bureau of Internal Revenue (BIR) is working to increase the taxation-to-gross domestic product (GDP) ratio, which saw its peak during the administration of former President Fidel Ramos.
“If I’m not mistaken, during the Ramos administration and before the onset of the Asian crisis, it reached 16 to 17 percent of GDP [gross domestic product]. Right now, we are only at the level of 12 to 13 percent. But our Millennium Development Goals target is to have it increased to a level similar to that during the time of President Ramos,” he said.
On infrastructure, the official noted that the government has embarked on accelerated spending in public infrastructure for the last three years.
“We admit that we lack infrastructure . . . When PPP [public-private partnership] projects that are in the pipeline bear fruits [such as]Metro Rail Transit, highway and infrastructure projects, it will definitely add to important public infrastructure projects,” Coloma said.
In terms of basic services and poverty reduction, he cited the Philippine Development Plan, which includes provision of direct services to the poor.
“We do not rely on the trickle-down effect, that is why we implemented the Pantawid Pamilyang Pilipino Program that gives direct conditional cash transfers to families below the poverty threshold,” Coloma said.
The Philippines got a credit rating upgrade from Standard & Poor’s after it got an investment grade last year.
‘’We raised the ratings because we now believe the ongoing reforms to address shortcomings in structural, administrative, institutional and governance areas will endure beyond the current administration,’’ S&P said.