MANILA: The Japan Credit Rating Agency, Ltd. (JCR) on Wednesday kept the Philippines' investment-grade credit rating of 'A-' with a stable outlook. "The ratings mainly reflect the country's high and sustained economic growth supported by solid domestic demand, a low-level external debt, its resilience to external shocks supported by accumulated foreign exchange reserves, and its solid fiscal base," the Japan-based debt watcher said in a report. The Philippine economy grew by 5.6 percent last year, surpassing major economies in Asia that have officially released their full year 2023 gross domestic product (GDP) figures, such as China with its GDP at 5.2 percent, Indonesia at 5.1 percent, Vietnam at 5.1 percent, Malaysia at 3.7 percent and Thailand at 1.9 percent. JRC said the country's real GDP is expected to expand by 6 percent this year, mainly driven by the recovery of external and tourism demand, as well as solid private consumption underpinned by a subdued rise in prices and stable flow of remittances from overseas Filipinos. Aside from this, JRC said the government debt-to-GDP ratio at the end of 2023 was about 60 percent, one of the lowest among the sovereigns rated in the A-range. The credit rating agency cited the robustness of the country's foreign currency liquidity position. In a statement, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. welcomed JCR's recognition. 'Our external payments position will continue to remain manageable, supported by sustained foreign exchange inflows from overseas Filipino remittances, business process outsourcing revenues, foreign direct investments, and tourism receipts. In addition, the country maintained ample foreign exchange reserves,' Remolona said. BSP's preliminary data indicate the country's gross international reserves was at USD103.3 billion as of end-January 2024. The figure represents a liquidity buffer equivalent to 7.7 months' worth of imports of goods and payments of services and primary income. The credit rating agency believes that t he Philippine government will maintain its fiscal soundness as the fiscal consolidation being promoted by the administration of President Ferdinand R. Marcos Jr. is producing good results based on the Medium-Term Fiscal Framework. An investment-grade rating indicates lower credit risk, thus allowing a country to access funding from development partners and international debt capital markets at lower cost. This enables the government to channel funds that would have otherwise been allotted for interest payments to socially beneficial programs and projects. Source: Philippines News Agency
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