MANILA – Bangko Sentral ng Pilpinas (BSP) Governor Benjamin Diokno said affirmation of the country’s investment grade credit ratings is already a plus despite the economic hit from the global pandemic.
“Amid widespread downgrades of credit ratings of many economies globally, the affirmation of the Philippines’ investment-grade credit ratings and the stable outlook on the ratings is a strong vote of confidence and may very well be likened to a rating upgrade during normal times,” he told journalists in a virtual briefing Thursday.
S&P Global Ratings affirmed its ‘BBB+’ rating with a stable outlook on the Philippines last May 30 even as its projects a 0.2-percent contraction for the domestic economy this year because it forecasts a rebound of 9 percent in 2021.
It based these projections on the assumption that the pandemic caused by the coronavirus disease (Covid-19) will be “generally contained” in the first half of 2021.
Moody’s Investors Service kept its Baa2 rating with a stable outlook on the country last May 12 despite slashing its growth forecast for the economy this year from 2.5 percent to 2.2 percent due to the impact of the pandemic.
Also, Fitch Ratings affirmed its BBB rating on the Philippines despite changing the outlook from positive to stable on account of the economic impact of Covid-19.
“The affirmation of the 'BBB' rating reflects the Philippines' fiscal and external buffers, including its lower government debt/GDP (gross domestic product) ratio compared with peer medians and net external creditor position, as well as its still-strong medium-term growth prospects,” it said in a statement.
Diokno said before the pandemic, economic managers are focused on further improving the country’s credit rating to A-level by 2022.
“However, given the coronavirus crisis, the primary focus now is on saving lives, jobs, and livelihoods — as it should be,” he said, urging legislators to approve additional reform measures to further solidify the economy’s fundamentals. (PNA)
