Palace welcomes Fitch ratings upgrade
Malacanang welcomed on Monday Fitch Ratings' upgrade on the Philippines' credit rating.
In a statement, Presidential Communications Operations Office Secretary Martin Andanar said the improvement on the country's long-term foreign currency rating to "BBB" from minimum investment grade of "BBB-" was "another affirmation" of the Duterte administration's focus on law and order.
He also construed Fitch's action as a support on the government's fight against crime and corruption.
"This, together with the country’s strong macroeconomic performance and sound policies supporting high and sustainable growth rates gives us basis to hope that the country will continue to rise further in the ranks of Asian economies," Andanar said.
The Philippine new rating was assigned a "stable" outlook, which means there are no pressing factors that could trigger an adjustment within the near term.
The country's upgrade was made after four years of being in status quo.
In its report, Fitch cited the Duterte government's bold infrastructure development agenda and its comprehensive tax reform program, both of which are expected to bring material benefits to the Philippine economy in the years ahead.
“Strong and consistent macroeconomic performance has continued, underpinned by sound policies that are supporting high and sustainable growth rates,” Fitch said.
It noted that the Philippines is expected to remain among the fastest growing economies in Asia Pacific, with gross domestic product growth likely to hit 6.8 percent next year and in 2019.
According to Investment Relations Office, credit ratings are a measure of a country’s (or any rated entity’s) willingness and ability to pay debts as they fall due.
Because rating agencies take into account many factors in assessing a sovereign’s credit worthiness including its macroeconomic fundamentals and institutional strength, higher ratings help to improve a country’s image before the local and international investor communities.
Higher ratings, therefore, also contribute to a more robust assessment of investors of the country’s growth prospects and investment environment, IRO explained.
Andanar noted that in the statement of Fitch, it cited that there was "no evidence so far that incidents of violence associated with the administration's campaign against the illegal drug trade have undermined investor confidence."
Human rights groups locally and internationally have been criticizing the Duterte administration due to alleged extrajudicial killings involving drug suspects. Celerina Monte/DMS