Recognizing the strengths of the Philippine economy, international debt watcher S&P Global upgraded the country’s credit rating from “BBB” to “BBB+.”
In a previously released report, S&P affirmed the country’s creditworthiness with this upgraded rating to a “stable” outlook.
“The Philippines has above-average economic growth, a healthy external position, and sustainable public finance,” observed S&P. In addition, the stable outlook on the rating reflects S&P’s view that “the Philippine economy will maintain its momentum over the medium term, in combination with contained fiscal deficits and stable public indebtedness.”
This bullish outlook follows a 15-quarter sustained robust economic growth for the Philippine economy, despite plenty of global economic changes. The positive performance is owed to the continued exercise of fiscal discipline by the government, which continues to invest in infrastructure and human capital development.
The recent implementation of major policy and infrastructure reforms are seen to fuel this economic boom for the Philippines. Below are some examples:
- Laws on tax reform
- Liberalization of the rice sector
- Strengthening of the Banko Sentral ng Pilipinas’ (BSP) charter
- Initiatives to increase the ease of doing business
- Relaxing the foreign investment negative list
Good feedback, according to experts
“S&P Global’s credit rating upgrade for the Philippines by one notch higher to “BBB+” is an undeniable tribute to President Duterte’s unwavering commitment to bold reforms and sound economic policies as embodied in the 10-point Socioeconomic Agenda of the administration and his strong political will to get these tough initiatives done at the soonest,” said Finance Secretary Carlos Dominguez III.
Dominguez also thanks the legislature for their support for the socioeconomic programs of the President.
“We have kept our debt in check – even as we invest more on infrastructure and social services,” said National Treasurer Rosalia De Leon, who welcomed this development.
She gave a nod to the country’s fiscal discipline, saying that “This makes the Philippines a truly creditworthy sovereign in the eyes of the international financial community.”
The rating upgrade is also seen by BSP Governor Benjamin Diokno as a recognition of sound economic management, prudent monetary policy, and strong financial sector supervision.
This new “BBB+” rating is just a notch lower than the the “A minus rating,” which is within the territory of the highest credit-rating investment grade of S&P.