INFOGRAPHIC: What a credit rating upgrade means for Filipinos

Editors’ Note: This infographic was prepared in January 2013 in anticipation of a credit rating upgrade. On March 27, 2013, the Philippines won its first investment grade rating from Fitch, its  second from Standard & Poors on May 2, third from Japan Japan Credit Rating Agency Ltd. on May 7, and fourth from Moody’s on October 3. 

MANILA, Philippines – Will the Philippines achieve investment grade status this year? Very likely, say some analysts, as the country’s economic fundamentals continue to surpass those of its peers.

British banking giant Barclays sees the Philippines receiving an investment grade rating in the second half of 2013 on the back of governance reforms the Aquino administration put in place. Singapore-based DBS Group says an investment grade is possible because of the improvement in the country’s debt management. And Nouriel Roubini, a renowned New York University economist, says the upgrade “should be formally taken this year.” 

An investment grade is a seal of good housekeeping. It tells investors it is safe to do business in the country, and encourages them to put huge capital here.

An investment grade means the Philippines, as a borrowing country, has a strong ability to pay its debt. This lowers its borrowing costs, generating savings, which may be spent for social services. For Filipinos, it means better education and health care, and affordable loans for major purchases.

Since the start of the Aquino administration, the Philippines has received 8 credit rating and outlook upgrades from international agencies, putting it only a notch below investment grade. – Rappler.com