Stable and Investment grade

ON the eve of Independence Day celebration, the Philippines inched one notch in credit rating, another significant step that reaffirms the economic stability of the country on top of belonging to the prestigious league of the investment-grade community of nations. Japan Credit Rating Agency  just raised the BBB grade of the Philippines to “A-“ 

While the Philippines ' economic growth is under downward pressure JCR noted however that this was on account of the impact of the coronavirus disease 2019 (Covid-19) pandemic that resulted in temporary reduction of economic activity as the government  implements  quarantine measures to contain the spread of the virus. 

For most of us, we only know of  Moody’s,  S&P and Fitch rating institutions. JCR,  as financial globalization has made progress, emerged  as  the most remarkable credit rating agency of Japan and is  officially recognized in the United States, Europe, Turkey, Hong Kong, Indonesia and Thailand among others.

But what is the relevance of a sovereign credit rating  to countries like the Philippines which is an emerging economy in the world?  Among investors credit ratings  gives them  “insights into the level of risk associated with investing in the debt of a particular country, including any political risk”.

Last year, Fitch, S&P and Moody’s elevated the credit rating of the Philippines to BBB status which confirmed  its investment grade.  It was the first time that the country landed in the category and is indubitably  a feather in the cap of Finance Sec. Sonny Dominguez, who heads the economic team of Pres. Rodrigo R. Duterte administration.  In my long distance interview with Secretary Dominguez however, he  insisted  that none of these could have happened if not for the strong leadership of the President Duterte, the Cabinet members, the Banko Sentral ng Pilipinas and the legislators.  

Last week’s JCR rating of “A-“, amidst the pandemic  and the brouhaha over the anti-terrorism bill, was  indeed a welcome development.  For JCR   the country’s “high and sustainable economic growth performance underpinned by solid domestic demand,” makes the Philippines investment grade and stable. 

It’s not Duterte administration saying that. It’s the prestigious credit rating agencies in the world. These eloquently argue against negative issues conjured by Maria Ressa and her foreign financiers,  the whining and moribund political opposition and its allies in the radical left that parade as legal fronts who see nothing but gloom in the country. Surely, this is not the kind of economic environment which Ressa  described as “worse than any war zone”.