PH credit rating first ‘A-‘ from Japan Credit Rating Agency on Thursday upgraded the Philippines’ credit rating by a notch from BBB+ to A-, citing the country’s flexibility amid a COVID-19 pandemic that has slowed down growth, weakened fiscal positions and hurt credit ratings of economies.
The Japan Credit Rating Agency(JCR) gave the Philippines its first A credit rating with a solid standpoint, citing its “high and sustainable economic growth performance” amid the crisis.
JCR furthermore noted the Philippine government’s planned stimulus package as well as infrastructure programs.
“JCR holds that a downturn will be limited given the country’s strengthened economic base, resilient external position, and the government’s economic stimulus package totaling more than 9 percent of GDP. JCR also considers that the fiscal soundness will not be impaired because while the fiscal deficit may widen, the package at this time is justifiable and the government debt will remain comparatively subdued,” JCR said.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said JCR’s designation of an A- rating to the Philippines is inspiring news at this challenging moment. “The agency’s decision reflects its confidence that the Philippines is pursuing appropriate policies that will help Filipino individuals, businesses, and the economy at large to recover from this unprecedented crisis. On the part of the BSP, we have already implemented a long list of extraordinary relief measures, and we stand ready to do more if needed,” he said.“
While we have temporarily veered our attention away from the ‘Road to A’ agenda because our focus at the moment is on saving lives, jobs, and livelihoods, we welcome positive assessments from international observers like JCR. We hope this helps to uplift the Filipino spirit at this trying time and to inspire us to work harder together to emerge stronger after the pandemic,” Diokno said.
“The Duterte administration’s centerpiece infrastructure development policy and Comprehensive Tax Reform Program (CTRP) aimed to secure part of the development costs have been steadily progressing since JCR’s last rating review,” the agency said.
The rating companions of the Philippines (sovereigns with ratings of BBB+ to A) with JCR include the following: Malaysia, Italy, Poland and Portugal (all of which are rated A); Thailand, Mexico, Hungary, and Peru (all of which are rated A-); and India and Indonesia (which is rated BBB+). More..
The local stock barometer recovered Thursday given risk-on sentiment, but the peso weakened. The Philippine Stock Exchange index (PSEi) rose 0.57 percent, or 36.87 points, to 6,476.24 points. All Shares followed with a jump of 0.35 percent, or 13.06 points, to 3,799.16 points.
-Stockbytes PH, June 10, 2020
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