Japan Credit Rating Agency affirms the Philippines’ A- rating with stable outlook — DOF

In a report released on March 10, 2023, Japan’s leading credit watcher, Japan Credit Rating Agency (JCR) affirmed the Philippines’ investment-grade credit rating of ‘A-’ rating with a stable outlook amid global uncertainties and a high inflation environment.

The affirmation confirms the country’s strong macroeconomic fundamentals, as evidenced by the strong growth performance in 2022 at 7.6 percent that exceeded the 6.5 to 7.5 percent growth assumption of the Development Budget Coordination Committee (DBCC).

The country’s labor and employment conditions also continue to improve, with generally steady and low unemployment and underemployment rates since the end of 2022.

A credit rating of A- with a stable outlook indicates lower credit risk and entails better access to the international bond market and favorable interest rates. Moreover, it increases investor confidence in the country that may lead to more foreign direct investments (FDIs).

JCR also cited the country’s resilient banking system, which remains “healthy on stronger payment capacity and improving employment situation”.

In 2022, the national government (NG)’s outstanding debt settled at 60.9 percent of gross domestic product (GDP), lower than the 61.8 percent target that was set in the Medium-Term Fiscal Framework (MTFF).

Furthermore, the Bureau of the Treasury (BTr)’s latest cash operations report showed that the NG’s budget deficit narrowed down to 7.3 percent of GDP from the 8.6 percent in 2021. The latest fiscal outturn is also better than the MTFF target for 2022 at 7.6 percent.

“The Marcos administration is committed to maintaining sound macroeconomic fundamentals and achieving its fiscal targets by continuing the course of sound fiscal management. The country’s recent structural reforms will also enable the country to withstand the pandemic shocks and map a route to recovery,” Finance Secretary Benjamin Diokno said.

The government will continuously implement reforms to foster investment-led growth, which will help broaden opportunities for quality employment and further enhance productivity.

To tackle the recent elevated inflation, the government is adopting a whole-of-government approach. The Banko Sentral ng Pilipinas (BSP) stands ready to take all necessary policy actions to bring inflation to within the 2 to 4 percent government target over the medium term.

Moreover, the fiscal authorities are taking a comprehensive approach to address the short-term uptick in inflation, while pursuing medium- to long-term measures to stabilize food inflation, ensure food security and lower the cost of living for all Filipinos.

With the Philippine Development Plan (PDP) 2023-2028, the government will steer the country towards a path that promotes inclusive growth, provides equal opportunities to Filipinos, and enables them to participate in an innovative and globally competitive economy.


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