‘Philippines to achieve A credit grade in 2 years’

MANILA, Philippines — The Philippines is on its way to becoming an A-rated economy in the next two years after bagging a series of outlook and credit rating upgrades from international debt watchers, according to economic managers.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the outlook upgrade from Fitch Ratings may translate to a credit rating upgrade soon.

“We are meticulously tracking how the economy is progressing in terms of achieving a wide array of metrics that will solidify our position as an A rated economy in two years,” Diokno said.

The BSP and the Department of Finance (DOF) earlier launched the “Road to A” agenda.

“An A scale rating is not an end itself, with the overarching objective being maintaining macroeconomic stability and making growth truly inclusive. Having said that, a rating within the A territory will place the Philippines in the radar of more investors, which bodes well for attracting more job-generating investments,” Diokno said.

He said the interagency committee is more vigorously communicating the economic milestones as well as the governance and institutional strengthening the Philippines achieved in recent years.

Securing an A credit rating translates to lower borrowing costs and favorable investment environment which support economic growth.

The BSP chief noted the urgent passage of structural reforms is critical to the strategy of achieving an A-level credit rating within the next two years as this enhances the country’s institutional strength to manage the economy, which is a key indicator looked into by credit rating agencies.

“I believe that we are moving towards the right direction towards our goal of receiving an “A” rating, which is seen to have a vast positive impact on the local economy,” Diokno said.

According to the BSP, reforms that support the “Road to A” initiative include the Corporate Income Tax and Incentives Rationalization Act and Passive Income and Financial Intermediary Tax, amendments to the Anti-Money Laundering Act of 2001 and the Human Security Act of 2007, amendments to the Agri-Agra laws as well as reforms in financial consumer protection and deposit secrecy.