MANILA: Philippines’ credit rating from “stable” to “positive,” citing mainly the government’s policymaking that could further improve the country’s finances and economic growth.
The upgraded outlook of the country’s current rating of “BBB,” which is one notch above the minimum investment grade, means there is a chance the rating could be upgraded in the coming months.
“The positive outlook reflects our view that improvements to the Philippines policymaking settings could support a track record of more sustainable public finances and balanced growth over the next 24 months,” S&P said in a report on the Philippines released Thursday evening.
S&P cited the Comprehensive Tax Reform Program, the first package of which took effect in January, and the “Build Build Build” program, under which massive investments in infrastructure are set. Proceeds from the tax reform will partly fund the infrastructure projects, estimated at about $160 billion over the next five years up to 2022.
The Philippine economy grew 6.7 percent in 2017 to remain among the fastest growing in the Asia Pacific region.
JCR said in a report it took into account “the country’s high level of economic growth underpinned by solid domestic demand, resilience to external shocks supported by a declining external debt and accumulation of foreign exchange reserves, and the government’s comparatively sound fiscal position.”
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. welcomed the latest ratings decisions of S&P and JCR.
Finance Secretary Carlos Dominguez III said the positive developments reflected the increasing confidence of the international business community on the sustainability of the Duterte administration’s program for high growth and financial inclusion.
