Japan Credit Rating Agency (JCR) affirmed the country’s credit standing with an ‘A-’ rating and a stable outlook amid global uncertainties and a high inflation environment.
The affirmation confirms the country’s strong macroeconomic fundamentals, as shown by the robust economic expansion of 7.6 percent in 2022 that exceeded the 6.5 percent to 7.5 percent growth assumption of the Development Budget Coordination Committee (DBCC).
A credit rating of A- with a stable outlook entails better access to the international bond market and favorable interest rates. Moreover, it increases investor confidence in the country and may lead to more foreign direct investments (FDIs).
In 2022, the national government (NG)’s outstanding debt settled at 60.9 percent of gross domestic product (GDP), which is lower than the 61.8 percent target that was set in the Medium-Term Fiscal Framework (MTFF). This means that the government is gradually gaining fiscal space after the pandemic.
Furthermore, the Bureau of the Treasury (BTr) expects the fiscal deficit to settle at 7.2 percent in 2022. This is narrower or better than both the 8.6 percent recorded in 2021 and the 7.6 percent target set in the MTFF.
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.
“As we expect a global economic slowdown this year, we will closely monitor its impact to help ensure that we are ready to protect the most vulnerable sectors of the economy while supporting economic growth,” Finance Secretary Benjamin Diokno said.
The government continues to implement reforms to foster investment-led growth, which will help broaden opportunities for quality employment.
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.
