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PRESS RELEASE

Finance Secretary Ralph G. Recto has underscored that the Japan Credit Rating Agency’s (JCR) latest affirmation of the Philippines’ investment-grade credit rating of “A-” with a stable outlook is a strong vote of confidence in President Ferdinand R. Marcos, Jr.’s sound economic policies and a big win for ordinary Filipinos as it translates to more accessible financing for the government’s development programs. 

“This latest development is highly encouraging and shows that the fiscal and economic policies pursued by the Marcos, Jr. administration are on track to achieve a growth-enhancing fiscal consolidation,” the Finance Chief said. 

“Having a high credit rating is a major win for all as this means that the Philippines can have more access to cheaper financing from our development partners and the international capital markets,” he added. 

A high credit rating reflects the Philippines’ creditworthiness, sending a signal of confidence to investors and creditors, resulting in lower interest rates and better returns for Philippine bonds.

“This allows the government to channel funds that would have otherwise been allotted for interest payments towards more development programs such as more infrastructure projects, improved social services, better health care system, and quality education,” Secretary Recto emphasized.

“It also attracts more foreign direct investments into the country, which will create better employment opportunities for Filipinos,” he added. 

JCR’s recent reaffirmation of the Philippines’ credit rating has allowed the country to maintain its high investment-grade status across all major regional and international debt rating agencies.

In its press release, JCR underscored the Philippines’ high and sustained economic growth, buoyed by strong domestic demand, resilience to external shocks due to its low external debt and substantial foreign exchange reserves, and a solid fiscal foundation as key credit strengths. 

In 2023, the Philippine economy expanded by 5.6% making it the fastest-growing economy in ASEAN.

The Japanese debt-watcher also noted that the country has one of the lowest government debt-to-gross domestic product (GDP) ratios among the sovereigns rated in the A-range, which reached 60.2% at the end of 2023.

JCR is optimistic about the prospects of the Philippine economy, projecting it to further grow by about 6.0% in 2024, driven by the higher demand in the tourism sector, stronger private consumption fueled by moderate inflation, and higher remittance inflows from overseas Filipinos. 

Additionally, the credit rating agency highlighted the robustness of the country’s foreign currency liquidity position.

Moreover, it said the country’s economic growth will be driven by the Marcos, Jr. administration’s massive infrastructure program. Through the President’s Build Better More program, the government targets an annual infrastructure spending of 5% to 6% of GDP.

JCR likewise noted that the country’s first sovereign wealth fund–the Maharlika Investment Fund (MIF)–will support infrastructure investments in the country.

The credit rating agency believes that the Philippine government will maintain its fiscal soundness, noting that the fiscal consolidation efforts championed by the Marcos, Jr. administration are on track based on the Medium-Term Fiscal Framework (MTFF). 

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