Philippines needs further fiscal reform to stabilise public finances - Moody's |
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Published
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Thu, 14 Jun 2007 06:12
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MUMBAI (Thomson Financial) - Moody's Investors Service said Philippine economic policy has yet to translate its initial successes in fiscal consolidation to improved underlying performance in the economy.'... effective tax administration and prudent expenditure policies are needed for the long-run stability of the country's finances,' the rating agency warned.In its annual report, Moody's said the 'B1' foreign- and local-currency government bond ratings on the country reflect its relatively high sovereign debt burden, which leaves government finances and the external accounts vulnerable to shocks.Although the country's public-sector debt ratios have receded from their historic peak they remain relatively high compared to the country's rating peers. 'The government's revenue base cannot yet support higher spending to meet major needs in public infrastructure, in part because of large interest payments on debt,' the report said.However, Moody's said progress made in revenue reform and fiscal consolidation support a stable ratings outlook and that the balance of payments is supported by a flexible exchange rate policy, stable export production base, sizable remittance inflows from overseas workers and increasing foreign direct investment.TFN.newsdesk@thomson.comran/jroCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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