JAPAN Credit Rating Agency, Ltd. (JCR) sees a strong economy under the administration of President Rodrigo Duterte as it maintains the Philippines’ credit rating of “BBB+” which is just a notch away from a rating within the “A” category.
The rating is assigned a “stable” outlook, which indicates absence of factors at the moment that can drag (or lift) the country’s creditworthiness in a span of at least 12 to 18 months.
In a statement issued Tuesday, JCR said the rating was based on “the country’s certain resilience to external shocks, relatively sound fiscal position, and relatively sound economic growth potential underpinned by robust domestic demand.”
The debt watchdog made the statement as it welcomed reports that the Philippines, following the change in political leadership, aims to build on its past economic gains, such as by spending even more on infrastructure and pursuing additional reforms to generate investments.
JCR has pegged its growth forecast for the Philippines for 2016 to over 6 percent, following last year’s growth of 5.9 percent, which was one of the fastest in Asia-Pacific.
The Bangko Sentral ng Pilipinas welcomed the latest rating decision of JCR.
“Consistently registering one of the fastest growth rates in the region and the world, the Philippines has proven that boom-and-bust cycles are a thing of the past. We credit our economic gains to a solid foundation that consists of decades of structural reforms, including pursuit of sound fundamentals,” said BSP Officer-in-charge, Deputy Governor Diwa Guinigundo.
“These fundamentals – including benign inflation, healthy external payments position, and stable banking system – will continue to help the Philippines build on its gains to become a more inclusive economy,” he added.
The Philippines’ “BBB+” rating with JCR is the country’s highest credit rating. It is one notch above the investment-grade ratings assigned by Moody’s Investors Service (Baa2) and Standard & Poor’s (BBB), and is two notches higher than the rating assigned by Fitch Ratings (BBB-). (SDR/Sunnex)