A Japanese credit rating agency expresses optimism about PH economic growth
In the assessment provided by Japan Credit Rating Agency Ltd. (JCR), it’s anticipated that the Philippine economy will experience a growth rate of approximately six percent in the current year. This growth is primarily expected to be fueled by robust private consumption, buoyed by factors such as decreasing prices and steady remittances. However, this forecast falls slightly below the government’s target range of 6.5 to 7.5 percent for the year.
JCR’s analysis underscores the anticipated factors contributing to this growth, including the rebound of external demand and tourism, as well as the sustained flow of remittances from overseas Filipino workers. The agency also highlights the solid performance of the Philippine economy in 2023, which outpaced several regional counterparts, driven by favorable employment conditions, robust remittances, and increased investments in infrastructure.
Specifically, JCR notes that infrastructure investment as a percentage of GDP reached 5.8 percent in 2023, and the establishment of the Maharlika Investment Corp., the country’s first sovereign wealth fund, is expected to further bolster infrastructure development.
Moreover, JCR’s affirmation of the Philippines’ investment-grade credit rating of A- reflects confidence in the country’s economic stability and resilience. Factors contributing to this rating include sustained economic growth, low external debt levels, a solid fiscal base, and prudent fiscal management efforts by the government.
The agency acknowledges the government’s fiscal consolidation efforts under the current administration and expects these measures to continue, maintaining the country’s fiscal soundness. Additionally, JCR highlights the Philippines’ robust foreign currency liquidity position, which enhances its resilience to global economic uncertainties.
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. and Finance Secretary Ralph Recto both welcomed JCR’s affirmation, emphasizing the country’s manageable external payments position, ample foreign exchange reserves, and the positive implications of a high credit rating for accessing financing and attracting foreign investments. They also underscored the potential for redirected funds from interest payments towards development programs, signaling confidence to investors and creditors alike.
Business News: A Japanese credit rating agency expresses optimism about PH economic growth
