Philippines’ A credit rating affirmed by Japanese debt watchdog
INQUIRER FILE PHOTO
MANILA, Philippines — The Philippines was able to maintain an investment grade rating of “A-” from the Japan Credit Rating Agency Ltd. (JCR), seen as a seal of good housekeeping amid external headwinds.
An investment-grade rating signals low credit risk and favorable financing terms for critical public services and infrastructure.
“Despite increased uncertainty due to changes in U.S. tariff policies, [the] Philippines’ foreign exchange liquidity position remains solid, and JCR expects the economy to retain high resilience to external shocks going forward,” JCR said on Thursday.
This comes at a time that sweeping tariffs imposed by US President Donald Trump have dampened prospects for global growth.
READ: Philippines maintains open line with US for trade negotiations
The Japanese rating agency affirmed the rating with a “stable” outlook, which means it is unlikely to change such grade in the next 12 to 24 months.
Other global credit rating agencies also give the Philippine sovereign an investment grade but below the ‘A’ rating issued by JCR.
READ: Philippines gets ‘A’ rating from Japanese credit watchdog
Above 5% growth
JCR expects the Philippines’ GDP growth to stay in the “upper 5-percent range” this year.
It also cited the country’s strong external position and ample foreign exchange reserves as well as government efforts towards fiscal consolidation under the Medium-Term Fiscal Framework.
For his part, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. said: “JCR’s affirmation will support and strengthen investment from Japan, one of the Philippines’ most important partners. The BSP will continue to safeguard price and financial stability to boost the country’s resilience amid global headwinds.”
In the first quarter, the country’s gross domestic product expanded by 5.4 percent.
READ: Slower than expected: Philippine GDP grows by 5.4% in Q1
According to the BSP, growth was attained amid stable prices. Inflation averaged 2 percent during the first four months of the year. – Doris Dumlao-Abadilla
