WHAT’S the “credit rating upgrade” for the country that Ernie T. was so hefty about at the Harrison Plaza coffeeshop yesterday? Well, in your case, Jose, it’s like the coffeeshop manager saying you can sign for more cups.

With the Philippines, the upgrade means the Aquino government can borrow more, especially from multi-lateral lenders like the World Bank or other global landers.

Alright, but before issuing the IOUs, shouldn’t we show proof that when the chips are called in we’ll be good to the dollar owed? That’s when we flash the Bangko Sentral ng Pilipinas card.

The latest BSP figures on the country’s GIR – gross international reserves – stands at $67.8 billion or enough to cover almost 11 months of imports, payments of services and goods.

“That’s equivalent to 10.8 times the country’s short-term external debt based on original maturity and 6.1 times based on residual maturity,” said the First Metro Investment Corp. and University of Asia & the Pacific in a joint report.

I do not know if the Department of the Finance had the inside track on the FMIC-UAP collaboration. But it certainly looks the DoF did, despite referring largely to its own International Finance Group study.

In any case, what’s a credit-rating upgrade if you have no plans to borrow? Besides, to cope or at least narrow the P300-billion budget gap in 2011, Finance Secretary Cesar Purisima admits looking at credit-market opportunities.

The government needs to borrow $500 million in foreign commercial loans, preferably with longer maturities. Hopefully, this will provide cover for the expected shortfall in ODAs – official development assistance loans – mostly from Japan, now seen to be in straits this year.

This $500-million debt issue would raise total Philippine bond sale abroad to $3.25 billion, way past the programmed $2.5 billion for the year.

Damn right, Jose, the Aquino government is taking us deeper in debt with at best the cold comfort that the contemplated total overseas borrowings will not breach the $4.5-billon limit for 2011.

Going deeper in debt, however, isn’t all that bad. It’s a matter of seeing to it that the Aquino government’s spending invigorate the public-private partnership scheme.

With the projected economic dip in the second quarter on account of higher inflation, the FMIC-UAP admitted being at best “cautiously optimistic” for the coming quarters. But despite the slowdown being generally expected, it’s not projected to be severe.

Thus, although private spending could weaken due inflation, it’s predicted to bounce back in the third quarter on the strength of heavier public spending arising from the Aquino administration’s public-private program.

By the way, Jose, the country’s gross international reserves, denominated in American dollars, consist of the BSP’s gross foreign currency holdings, gold reserves, special drawing rights from multilateral institutions, and foreign investments.

The GIR, therefore, defines the country’s ability to service the economy’s foreign currency needs. It’s what qualifies the country’s standing in global trade for a credit-rating upgrade or downgrade.