Overseas Filipinos hauling “balikbayan” boxes gather in an airport preparing to fly back to the Philippines. Jeff Youngstrom
MANILA, Philippines – A Hong Kong-based finance publication attributed the latest investment grade rating from Moody’s Investor’s Service to overseas Filipino workers (OFW) remittances more than to government.
Finance Asia business editor Nick Ferguson said in a report Thursday that while Finance Secretary Cesar Purisima gives credit to “sound fiscal and monetary policy” under President Benigno Aquino III, it is the 15 million OFWs who contributed to the upgrade.
OFWs remitted $12.627 billion so far in 2013–a 5.8 percent leap from the same period in 2012.
Related: OFW remittances up 6.6% in July
“This windfall means that remittances are more than enough to service the government’s $125 billion national debt, given ultra-low interest rates, which has allowed the government to avoid addressing much-needed tax reform,” Ferguson writes.
Bulk of the remittances were from Filipinos working in the US, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada and Japan.
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On Thursday, Moody’s gave the country a Baa3 credit rating, citing that the country’s robust economic performance warranted the upgrade.
The firm also said the sovereign rating was due to “improved fiscal management” leading to increases in infrastructure and social spending.
It also suggested that the Philippines improves in revenue generation at par with other investment-grade countries.