Fitch and S&P are threatening to downgrade their ratings on Philippine debt papers purportedly due to political uncertainties and the failed implementation of the expanded VAT.
In so many words, the two rating agencies of this debt-ridden world are saying that Mrs. Gloria Macapagal Arroyo has lost their confidence. True-blue seguristas, Fitch and S&P are practically saying that they could no longer trust GMA in ensuring that every cent and dollar of the humongous Philippine foreign debts could still be paid pronto.
This development is a big headache for GMA and the political and economic Establishment.
The people who have made a stand for GMA’s resignation or removal from the presidency have likewise articulated a position for meaningful reforms including debt relief, debt cap and other measures that would cut down on the current exceedingly high payments on these debts that are mostly fraudulently-obtained, onerous-in-terms and graft-ridden in implementation.
The Glorigate only splashed fuel on the already red-hot coals of discontent over low social spending and the oppressive impositions. The situation has compelled the public to look both at the moral fitness of the current leader and the policies she has likewise pursued, including the public spending on debt.
The real danger that Fitch and S&P has seen is not merely GMA’s imminent downfall but perhaps the prospect of a fresh, new government that could include in its reform program a stop on mindless and gargantuan debt payments.