Delivered by Undersecretary Gil Beltran during the Year-End Celebration at the Department of Finance, 15 December 2014

The year 2014 is ending; once again, we are faced with a new year and new challenges. For us, this should be an opportune time for stock-taking; and. at the same time, for planning out our priorities in 2015.

The DOF achieved a great deal in 2014. With Secretary Purisima at the helm, the country’s macrofundamentals are in their best shape ever. Inflation is on its way down. Interest rates net of inflation remain one of the lowest in Asia despite QE tapering in the US. The exchange rate is stable on account of strong BOP inflows and the fiscal position is at its strongest (almost in balance at -0.3% of GDP as of end-October) with the NG revenue effort up by 1/2 percentage point (as of October) and the public sector debt ratio at its lowest in 30 years (66.3% for Consolidated Public Sector, 52% for non-financial public sector and 38.1% for consolidated general public sector).

The country’s potential growth rate is on its way up. Although the actual growth rate tumbled to still respectable levels as of Q3, the headroom to sustain the 7% plus growth rate we achieved in the previous two years are firmly in place. The growth rate is also private sector-led, investment-led and broad-based, making growth sustainable.

The improving economy did not escape credit rating agencies. This year, we received four credit upgrades, namely:

a) ONE NOTCH UPGRADE ABOVE MINIMUM INVESTMENT GRADE FROM MOODY’S ON DECEMBER 11, 2014, THE HIGHEST RATING EVER GIVEN BY MOODY’S TO THE PHILIPPINES.

The driver of this year’s upgrade is debt management and fiscal management. Moody’s noted the decline in the debt ratio, the longer maturity of debts and the increased share of peso financing. Also, Moody’s noted the rise in revenues which was faster than nominal GDP growth for the last 4 years!

b) ONE NOTCH UPGRADE ABOVE MINIMUM INVESTMENT GRADE FROM S&P ON MAY 8, 2014, ALSO THE HIGHEST RATING EVER GIVEN BY S&P TO THE PHILIPPINES.

c) AN UPGRADE LAST JULY 9, 2014 FROM THE JAPANESE R&I (Rating and Investment Information) TO ONE NOTCH ABOVE MINIMUM INVESTMENT GRADE; AND

d) INVESTMENT GRADE BY NICE (National Information and Credit Evaluation) INVESTORS SERVICE OF KOREA ON SEPTEMBER 2, 2014.

The country also received upgrades in international competitiveness rankings. The WEF cited the Philippines as the most improved country since 2010 giving us a 7-slot gain in its 2014 rankings.

Likewise, the Department received the REGION’S BEST BORROWER AWARD GIVEN BY FINANCE ASIA FOR THE INNOVATIVE EXECUTION OF ITS ACCELERATED 1-DAY SWITCH TENDER OFFER AND THE CONCURRENT US$1.5B NEW TEN-YEAR BOND ISSUE COMPLETED IN JANUARY 2014. ACCORDING TO FINANCE ASIA, THE PHILIPPINES WAS ABLE TO AGGRESSIVELY PLACE ITS SECURITIES WHILE REALIZING INTEREST SAVINGS WHILE EXTENDING THE MATURITY OF ITS OUTSTANDING DEBTS.

The country was cited by Economist Intelligence Unit for its FINANCIAL INCLUSION POLICY FRAMEWORK THAT IS AMONG THE THREE BEST IN THE WORLD AND IS THE BEST IN ASIA. The ECONOMIST INTELLIGENCE UNIT SAYS THAT THE COUNTRY IS THE ACKNOWLEDGED LEADER IN MICROINSURANCE REGULATION.

The GIZ, the development assistance agency of the German Government also cited the Philippines as the Asian emerging country with the highest microinsurance outreach as the country recorded 27 million persons covered. The Philippine model is now being used by GIZ in its technical assistance program for neighboring Asian countries.

On the home front, the DOF also EARNED ACCREDITATION FROM CIVIL SERVICE COMMISSION FOR ITS APPOINTMENTS WHICH NO LONGER NEED TO UNDERGO CSC APPROVAL BEFORE THEY TAKE EFFECT. With this accreditation, the CSC expressed its trust on the personnel screening capabilities of the DOF.

The DOF also received acclaim for its excellent hosting of the World Economic Forum on East Asia which showcased the country’s emergence as an economic tiger.

With these improvements and citations, the challenge is there for us to outperform ourselves.

In 2015, we should work harder to push the revenue effort further up by at least 1/2 percentage point of GDP, reduce the NG debt ratio by at least a percentage point and further expand fiscal space for infrastructure and social services.

We will expand the clientele of our microfinance products further, introduce new microinsurance products and reduce risks of disasters.

We will also host the APEC finance ministers’ meeting to showcase our development experience, focusing on more inclusive growth. We hope that next year’s hosting will again earn the acclaim of our partners.

But in the meantime before the new year starts, before harder work starts, we should enjoy and make sure this year’s celebration is a success.

Thank you and Mabuhay tayong lahat!