Despite the political noise about poverty in the country, the government remains “on track” to attain single-digit poverty rate by 2028, Finance Undersecretary Domini Velasquez said.
Despite politicians’ incredulity at poverty data released by the Philippine Statistics Authority last week, “what’s important here is that we’re on track,” said Velasquez, chief economist of the Department of Finance.
“By the end of President Marcos’ administration, it will be below 10% and in single digit. We’re actually on track to bringing poverty down to a single digit,” she added, citing the country’s economic fundaments over the past few years.
Except for three years (1998, 2009 and 2020), the Philippine economy has been growing consistently over the past 30 years.
In the past 10 years, the average growth clip was at 4.86% (including the 9.5% contraction in 2020) or 6.42%, excluding 2020.
For the first half of 2024, preliminary data showed economic growth of 6.3%, surpassing Malaysia (5.8%), Indonesia (5%) and China (4.7%). The country is now the second fastest growing Asian economy next to Vietnam (6.9%).
Velasquez said the Philippines accomplished this through increased government spending and investments despite weak consumer spending.
He noted that investor confidence had not waned despite the growing political noise.
“Investors are able to differentiate economic versus political (issues),” she added.
Velasquez cited the country’s recent credit rating upgrade from Japan’s largest credit rating agency, Rating and Investment Information Inc (R&I).
R&I upgraded the Philippines’ credit rating to “A-” with a stable outlook from “BBB+” last year.
At present, the Philippines holds an “A-” rating from the Japan Credit Rating Agency, “BBB” from Fitch Ratings, “Baa2” from Moody’s Ratings and “BBB+” from Standard & Poor’s Global Ratings.
President Ferdinand Marcos Jr, who was criticised for his investment-promotion trips in the first year of his presidency, was beside himself in his social media accounts.
“Although this is the first credit upgrade under my administration, we will not stop here. We will keep giving our best to make sure that every Filipino benefits from economic growth until we break the cycle of poverty,” Marcos said.
He said the improved investment rating will “help us bring down borrowing costs and secure cheap and affordable financing for the government, businesses and ordinary consumers”.
“We can use the money we save to fund different public services like infrastructure, health-care facilities and the construction of classrooms for our learners.
“This will help us invest more on our people – paving the way for more Carlos Yulos in the near future,” he said, referring to the 24-year-old star gymnast who bagged two gold medals in the Paris Olympics.
He added that the improved credit rating will also entice more investments and businesses to set up shop in the Philippines, leading to the creation of many quality jobs and higher pay for Filipinos. — Philippine Daily Inquirer/ANN
