Finance Secretary Ralph G. Recto lauded Japan’s Rating and Investment Information, Inc. (R&I) for upgrading the Philippines’ credit rating to A- with a stable outlook, underscoring the country’s robust economic growth, strong fiscal health, and favorable investment climate.
“This is a milestone achievement,” Recto said. “Ito ang kauna-unahang credit rating upgrade sa ilalim ni President Ferdinand R. Marcos, Jr. na nagpapatunay na malaki ang tiwala ng mga investors and creditors sa kanyang pagpapatakbo sa ekonomiya.”
R&I’s upgrade, reported on August 14, 2024, marks the first credit rating improvement under the Marcos administration and follows a previous A- rating from Japan Credit Rating Agency (JCR) in 2020.
The upgrade highlights the Philippine government’s successful fiscal consolidation efforts, which have reduced the fiscal deficit and government debt as a percentage of GDP from its pandemic-era peak.
Recto emphasized that the government’s Medium-Term Fiscal Program (MTFP) is crucial in maintaining this positive trajectory.
“Our refined Medium-Term Fiscal Program is our blueprint for our road to A rating,” he said. “This ensures that we can reduce our deficit and debt gradually in a realistic manner, while creating more jobs, increasing our people’s incomes, growing the economy further, and decreasing poverty in the process.”
R&I’s assessment also credited the Philippines’ macroeconomic stability, continuous improvement in fiscal balance, and ongoing government reforms as key factors for the upgrade.
The agency highlighted the government’s commitment to infrastructure investment, education, social welfare, and tax base expansion as drivers of sustained economic growth.
The high credit rating is expected to lower borrowing costs for the government and private sector, allowing for greater investment in development programs such as infrastructure, social services, healthcare, and education. It also enhances the country’s attractiveness to foreign investors, potentially leading to increased employment opportunities for Filipinos.
R&I projects that the Philippine economy will maintain strong and stable growth over the medium to long term, bolstered by public and private sector investments, a burgeoning business process outsourcing (BPO) sector, and favorable demographics.
The Marcos administration’s push for economic stability, infrastructure development, and private investment expansion has been recognized by R&I, with the agency expressing confidence in the government’s progress toward long-term economic growth.
“Given that the government has been pushing ahead with measures to ease regulations to boost private investments, R&I has a high opinion of the firm progress the government has made in further building the fundamentals toward economic growth in the medium to long term,” the report noted.
The Philippine government has maintained regular dialogue with R&I and other major credit rating agencies, with a recent briefing held in Tokyo, Japan on June 20, 2024, to update the agency on the country’s economic developments.
