MANILA, Philippines: Philippines received an upgrade to "BBB +": its top credit rating in history – of the Standard & Poor's global debt observer, who cited the strong growth path of the country, its healthy external position and sustainable public finances.
Now that it is two steps higher than the coveted investment grade qualification, this development will probably translate into a lower cost of international market loans, both for the government and for private companies.
This, in turn, translates into cheaper finance options for the internal market that could help boost the economy.
"We have elevated the qualification to reflect the strong path of economic growth in the Philippines, which we hope will continue to drive constructive constructive results and support broader credit metrics in the medium term," said S & P.
"The rating also relies on solid government fiscal accounts, low public debt and the external configuration of the economy sound."
Prior to the update, the Philippines received the first research qualification from another international debt observer, Fitch Ratings, in 2013.
"Credit is part of the strong leadership of President Duterte and his ten-point economic program," said Finance Secretary Carlos Domínguez III in a text message to the Inquirer.
Governor Benjamin Diokno of Bangko Sentral n Pilipinas said that the update was "well-deserved" and showed that the economic team of the administration "is working in the right direction."
"But we know that work is not done," he said. "We will continue to work non-stop until we obtain an A rating."
S & P also gave the country one A "stable" perspective that, he said, "reflects our view that the Philippine economy will maintain its strong medium-term impetus, along with the fiscal deficits contained and stable public debt."
"We can raise the ratings over the next two years if the government realizes other significant achievements in its fiscal reform program, or if the country's external position improves so that its status as a net external creditor becomes safer in the long term" . said the watchman.
"We can also raise the ratings if we find that the institutional configuration of the Philippines has improved markedly."
He warned that "it could reduce the ratings if the government's fiscal program represents very low public debt levels than expected, or if real GDP growth decreases significantly."
Economics in rapid growth
In deciding to increase the rating of the country to two oscillations higher than the investment grade, S & P said that the country's economy "grew at a steadily faster pace than that of its peers" and that this rate of growth would continue During the forecast period provided the current level is maintained investments.
S & P noted that the Philippine economy was among the fastest growing in the world on a 10-year average per capita base that reflects the dynamics of support policies and the improvement of the investment climate.
"The country has a relatively diverse economy, with an increasingly strong track record of high and stable growth," said the credit.
"We estimate that the gross domestic product per capita will amount to almost 3,400 dollars by 2019; we project that GDP growth per capita will average approximately 4.9 percent per year in 2019-2022, based on balanced contributions from private consumption and from growth of the investment ".
S & P also cited the country's unemployment rate, which has been declining for a few years, which indicated the labor market for strengthening the economy, although the working age population continued to grow.
MORE READ OUT
Subscribe to INQUIRER PLUS to access The Philippine Daily Inquirer and 70 other titles, share up to 5 gadgets, listen to the news, download as early as 4:00 and share articles on social networks. Call 896 6000.
For comments, complaints or queries, please contact us.