Philippines’ credit rating by a notch from BBB+ to A-

By: Sunstar Business
Published: June 12, 2020
Full Article: Debt watcher upgrades PH’s rating to A-
Snippet: THE Japan Credit Rating Agency (JCR) has upgraded the Philippines’ credit rating by a notch from BBB+ to A- , citing the country’s resilience amid a pandemic that has slowed down growth, impaired fiscal positions and hurt credit ratings of economies across the globe.

JCR assigned a “stable” outlook on the new rating, which indicates that the “A-” will be maintained over the near term.

Strong fundamentals

In a report released Thursday, June 11, 2020, the JCR said its decision to raise the Philippines’ credit rating came on the back of its assessment that the impact of the Covid-19 crisis on the domestic economy and the government’s fiscal standing will be temporary, given the country’s strong fundamentals going into the crisis, the massive relief measures, as well as the pursuit of important legislation, such as the Corporate Recovery and Tax Incentives for Enterprises Act under the Comprehensive Tax Reform Program.

“JCR holds that a downturn will be limited given the country’s strengthened economic base, resilient external position, and the government’s economic stimulus package totaling more than nine percent of the gross domestic product. JCR also considers that the fiscal soundness will not be impaired because while the fiscal deficit may widen, the package at this time is justifiable and the government debt will remain comparatively subdued,” the JCR said.

“The A- rating upgrade from JCR, which comes at a time when economies across the world are reeling from what could likely become the worst global downturn in nearly a century, is a solid recognition of the Philippines’ capability to stage a quick and strong recovery from this health crisis,” said Finance Secretary Carlos Dominguez III.

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