Category : Press Release
Date : July 06, 2017
Agency : Investor Relations Office
Title : Japanese debt watcher keeps PH’s high rating, cites robust growth, resilience to shocks
Article : The Philippines kept its credit rating of BBB+ with Japan Credit Rating Agency, Ltd. (JCR), which recognized indicators that will help the economy maintain robust growth and withstand external headwinds.

The rating is just a notch below the A scale and is assigned a “stable” outlook, which means there are no pressing factors seen at the moment that may cause the rating to change at least over the short term.

JCR’s rating opinions are valuable for the Philippines as these help guide mostly Japanese companies in their investment decisions. Japan is one of the Philippines’ biggest sources of foreign direct investments (FDIs), accounting for 48.8 percent of net equity FDI of $2.035 billion in 2016.

According to JCR, its decision to continue assigning the Philippines the favorable rating of BBB+ shows “the country’s high level of economic growth underpinned by expanding domestic demand, resilience to external shocks supported by declining external debt and accumulation of foreign exchange reserves, and continued reduction of government debt burden.”

The Philippines’ gross domestic product (GDP) growth stood at 6.1 percent in 2015 and accelerated to 6.9 percent in 2016, JCR noted. For this year, it added, growth is expected to remain robust on the back of strong household consumption, rising private-sector investments, and increasing government spending, especially on infrastructure.
JCR also cited the Philippines’ ample foreign exchange reserves, estimated at 5.6 times the country’s short-term external debt and 1.1 times its total external debt.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla, Jr., who took over the helm of the BSP last July 3, welcomed the decision of JCR to affirm the country’s rating and outlook.

“The rating and outlook assigned by JCR to the Philippines are a testament to the confidence it has on the economy and to the trust it bestows on the ability of concerned authorities to continue managing the economy well,” Espenilla said.

“As far as the BSP is concerned, we will continue doing our share for the economy by striving to consistently fulfill our mandate of price and financial stability. Included in this task is prudent management of the country’s external accounts so that the economy maintains sufficient buffers against external headwinds,” Espenilla said.