Japan Credit Rating Agency (JCRA) gives stable outlook for the Philippines

MANILA – Japan Credit Rating Agency (JCRA) on Monday affirmed its A-level credit rating with a stable outlook on the Philippines, citing partly government measures to address the pandemic’s impact on the health system and the economy. 

“The ratings mainly reflect the country’s high and sustainable economic growth performance underpinned by solid domestic demand, its reliance to external shocks supported by an external debt kept low relative to GDP (gross domestic product) and the accumulation of foreign exchange reserves, the government’s solid fiscal position, and sound banking sector,” it said in a statement. 

The rating affirmation came nearly 15 months after JCRA upgraded its ratings on the Philippines to A-level on June 11, 2020, on the belief that the economy would be able to weather the impact of the virus-induced pandemic.

In its report, the Japan-based debt watcher said the recovery of economic activities is delayed because of movement restrictions needed to address the further spread of the coronavirus disease 2019 (Covid-19), especially given the more contagious Delta variant. 

Shokichi Takagi, JCRA President

“However, the government has been swiftly implementing adequate measures such as increased public health-related expenditure, acceleration of vaccination, and continuation of employment program(s) by drawing upon its relatively strong fiscal position before the pandemic,” it said. 

The credit rater said it “does not consider that the fiscal soundness will be impaired because while the fiscal deficit has widened, the support package at this time is backed by appropriate fiscal policies and the government debt will remain comparatively subdued.” 

"The Duterte administration's centerpiece infrastructure development program has not been retarded even amid the prolonged pandemic," it added. (PNA)

Note: JCRA is a leading credit rating agency in Japan, and an expert of credit risk analysis.

JCR has a track record of assign credit ratings for more than 200 foreign issuers.

JCR is the only Japanese rating agency that is also officially registered in the US and certified in the EU. As the financial market becomes more globalized, demand for credit ratings with international recognition may be growing, to provide an important clue to assess credit risks.

JCR aims to address such needs in the international financial markets.