THE National Economic Development Authority (NEDA) said it does not expect the Philippines to retain its access to concessional loans as it moves towards middle-income status, and must seize the opportunity by completing major infrastructure projects by 2023.
“We are going to be reclassified as an upper middle-class income country by next year. And the downside to that is we will have less access to concessional loans,” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters at the 84th founding anniversary of NEDA in Pasig.
He noted that Japan, for instance, has been lending at lower rates in the form of official development assistance (ODA).
“So we will really have to make sure that we finish our major infrastructure, big-ticket projects by 2023. Because after that we will be classified as upper-middle income,” he said.
In his year-end address, Mr. Pernia said that the NEDA Board approved seven new projects amounting to P187.34 billion during its last meeting. He said that the projects are mostly located outside the National Capital Region in order to “develop growth centers in the regions and spread economic growth and development throughout the country.”
Meanwhile, NEDA Undersecretary Rosemarie G. Edillion said that the government’s goal of an upgrade to an A-level credit rating will also have an effect in securing funding for the “Build, Build, Build” program.
“We are also drafting a road map to get an A credit rating by 2022. This means that it will reduce the capital costs… We will no longer qualify for concessional loans by 2023 but if we are given that window for lower cost of finance it should be okay for us,” she said.
“It’s really important that we stay the course, especially with the reform agenda and also on the expenditure management side but also more importantly on the infrastructure spending so that we increase the country’s competitiveness,” Ms. Edillon added.
Philippine sovereign debt is currently rated at BBB+ with a stable outlook by Standard and Poor’s, or one step below A. — Luz Wendy T. Noble
