The Philippines maintained its BBB+ credit rating amid the Covid-19 pandemic.
Japanese credit rating company Rating and Investment Incorporated (R&I) recently reported that the Philippine economy suffered “a severe contraction due to the Covid-19 pandemic in 2020, but is expected to recover primarily through aggressive public investment.”
They added: “Fiscal and monetary policies will both boost growth for some time. With the government committed to maintaining fiscal discipline, the debt ratio will be back on a downward trajectory in the near future, in R&I’s view.”
The company pointed out that the government’s “comprehensive tax reforms” and “various regulatory reforms” greatly helped the country’s economy, and the banking sector of the country to maintain its stability.
R&I said that under the current administration’s “aggressive” infrastructure investment, private investment has “increased its contribution to economic growth.”
They also said the country’s gross domestic product (GDP) in 2020 contracted partly because of the stringent quarantine measures implemented to prevent the spread of Covid-19. However, the Philippines has been on its “recovery path” since the third quarter of 2020.
The credit rating measures a country’s ability to pay for its arrears. Through a high credit rating, the country’s investment rating may increase as well as develop more job opportunities for Filipinos.
In a tweet, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno wrote that through the slowing down of inflation, a stable banking system, and hastened push for financial digitalization, the country’s economy will continue to grow fruitfully.
Report from Naomi Tiburcio/NGS-jlo
