STATEMENT BY SECRETARY FLORENCIO B. ABAD ON STANDARD & POOR’S CREDIT UPGRADE ON THE PHILIPPINES

“We thank Standard & Poor’s (S&P) for its favorable assessment of the Philippines’ sovereign credit. We thank them as well for recognizing the progress of the Aquino Administration in ensuring fiscal stability through improved revenue administration and prudent and effective public expenditure.

“We remain committed to fiscal consolidation. Due to our reform efforts, the national government incurred interest payment savings of P49.33 billion or 11 percent of what was programmed for January 2011 to May 2012. Next year, we are programmed to bringing our fiscal deficit down to 2 percent of gross domestic product (GDP) from 3.5 percent in 2010, as well as lowering our debt stock to 49.5 percent of GDP from 52.4 percent in 2010.

“This credit upgrade by S&P to just a notch below investment grade, will bolster our chances to meet or even surpass our fiscal consolidation targets. It will also enable us to reduce the interest cost of our debt and swap our foreign currency-denominated credit into less volatile Peso instruments. All of these will help reduce the debt burden on our Budget and, consequently, create more fiscal space for social and economic services.

“This upgrade validates President Aquino’s platform of good governance as a driver for sustainable economic growth. Buoyed by eight positive credit actions already posted under this Administration, the country is now better-positioned to aim for investment-grade credit status and, more importantly, for meaningful economic growth.”