Japan debt watcher raises PH credit rating to BBB+

MANILA — The Investor Relations Office on Monday reported that Japan Credit Rating Agency raised the country’s credit score to BBB+ from BBB, the highest rating the country has received from international debt watchers.

“JCR is of the view that the Philippine economy will, by and large, sustain an annual growth of around 6 percent in the years to come driven by strong domestic demand,” JCR said in a report.

The rating was the third positive rating from JCR in the last five years.

The debt watcher also assigned a”stable” outlook for the Philippines, meaning the adjustment would be unlikely in the short-term.

“The upgrade to BBB+ is a recognition partly of how the country’s fiscal sector has transformed since 2010. Fiscal reforms, both legislative and administrative, have resulted in more buoyant revenue collections, manageable deficits and lower debt service burden. The pace by which the debt burden has declined over the years is one solid proof of the rare kind of fiscal discipline that the Philippines exercises,” said Finance Secretary Cesar V. Purisima as quoted in a report for the Philippine Daily Inquirer.

JCR’s report “highlighted the ability of the Philippines to maintain sound fiscal position, high external liquidity and solid economic growth,” the IRO noted.

“JCR also noted the stable social situation amid inroads in poverty reduction, with the poverty rate falling from 28.6 percent in 2009 to 25.8 percent in the first half of 2014,” according to IRO.

“The latest ratings decision of JCR, which makes the Philippines very close to securing a rating within the ‘A’ category, appropriately reflects the strength exhibited by the economy. Inflation has remained low, external liquidity ample and banking system sound. All this has been achieved despite a challenging external environment,” BSP Governor Amando M. Tetangco said in a statement quoted in the same PDI report.