WERE the Philippine economy a car, it can be said to have shifted from second gear to third gear.

This is because Moody’s Investors Service very recently upgraded the country’s credit rating from Ba1 to Ba2. Under the present administration — which remains popular with the people and trusted by the business community — the trajectory is definitely pointing upward. Hitting investment grade is the next logical goal.

In fact, the government has stated that its goal is for the Philippines to attain investment grade status by 2016.

The impressive growth in gross domestic product in the first half of the year, the non-stop drive against graft and corruption coupled with the widely-applauded framework agreement for a peace pact that the government signed with the Moro Islamic Liberation Front earlier this month were among the factors that resulted in the upgrade.

We are therefore keeping our fingers crossed that finally, the boom and bust cycle that has been the Philippines’ lot for the past many decades will finally come to an end. The last time the country earned a Ba2 rating was in 2002, when hopes were high that a new administration headed by a US-trained economist would finally lift the Philippines out of Third World status.

Sadly, things did not quite work out as expected.

More than two years after assuming office, President Benigno Aquino 3rd has finally regained the country’s reputation as a stable economy with bright mid- to long-term prospects. This time, it is hoped that no major scandals will weaken the administration, the way Aquino’s predecessor was hobbled and eventually crippled to the point that the entire business community opted to wait for a new government to take over before they were willing to invite investors to come in and give the country a second look.

It must be noted that Moody’s Investors Service is considered the world’s leading provider of credit ratings, research, and risk analysis. As such, the scores it gives countries carries a lot of weight with global investors.

Developed countries keep a constant watch on their credit worthiness, and the Philippines should do no less.

There will be challenges, of course. To quote Moody’s justification for the upgrade, “Despite headwinds from softening external demand, the Philippines has demonstrated considerable economic strength and fiscal resilience.”

Moody’s further notes that other countries with a similar Ba2 rating do not have the same high prospects as the Philippines, which is “poised to record a combination of faster growth, lower inflation, exchange rate appreciation, and an increase in foreign exchange reserves.”

Next step: fourth gear.