MVP: Corruption scandal puts PH credit rating at risk
Massive corruption surrounding the anomalous flood control projects could affect the country’s credit rating, possibly resulting in slower economic growth, a business tycoon warned.
Speaking before the Financial Executives Institute of the Philippines (Finex) on Friday, Manuel Pangilinan, who leads companies in the realms of infrastructure, power and agriculture, said the current political landscape may affect investor confidence, especially if “institutional responses are regarded as inadequate.”
Credit ratings are key assessments of a borrower’s likelihood to repay debt.
Standard & Poor’s credit rating for the Philippines currently stands at BBB+ with a positive outlook, inching it closer to its dream “A” rating.
Earlier, the Management Association of the Philippines (MAP) also noted that investor sentiment remained bearish because of corruption surrounding anomalous flood control projects.
MAP president Alfredo Panlilio said the public expects the government to take concrete action and show that it “means change and means to clean up itself,” as this would help improve investors’ perception of the Philippines.
For their part, the Department of Economy, Planning and Development said the scandal would not necessarily impact the country’s credit ratings, especially since the government was moving forward with its investigation.
Still, Pangilinan stressed that the flood control scandal was a “problem that can be solved, but over the long term and in parts.”
“If we want better governance in our country, we must have competent financial executives all round,” the billionaire said in his speech. “It isn’t just about catching crooks—it’s filling the gaps with financial executives with competence and integrity. Corruption survives not because bad people are smart, but because good people are absent.”
According to him, businesses were “inescapably” part of public life, meaning they were not free from accountability and scrutiny.
The billionaire likewise encouraged fellow business leaders to support critical institutions, including media, the academe, courts and the Church, as these could help push back “the pressures of coercion and corruption.”
This, he said, may “lessen the cost of doing business, the inequities in wealth created by corruption.”
