Fitch Global Ratings affirmed the credit rating of the Philippines, BBB, above minimum investment grade.
Moreover, “the long-term sovereign credit rating of the Philippines means that a stable outlook, meaning the rating is likely to be sustained in up to two years, but further slashed its gross domestic product (GDP) projection for the country”, report said.
Further, the debt watcher explained that “the ratings balance the Philippines’ prospects of strong sustainable growth and high levels of foreign-exchange reserves against relatively low per-capita income, governance indicators, and government revenue”.
Specifically, Fitch mentioned the adjusted rate hikes carried out by Bangko Sentral ng Pilipinas (BSP).
Based on the report, Fitch also warned the Philippines on the ongoing war between United States and China which could impair domestic economy.
Fitch also gave comments on the balance sheet of the country. According to the credit watcher, “revenue growth would likely improve to around 17% of the country’s gross domestic product by 2021 from 16.4% in 2018 as a result of the Duterte administration’s tax reform program. Fitch also estimates the budget deficit to settle at 3.1% of GDP this year, close to the government’s target of 3.2%”.
Recently, it was reported that Standard and Poor’s Global rating upgraded the credit score of the Philippines due to its robust economic growth.It is also expected that the development will continue to drive constructive development outcomes and underpin broader credit metrics over the medium term. The rating is also supported by solid government fiscal accounts, low public indebtedness, and the economy’s sound external settings”. (See full report here S&P raised credit ratings of Philippines and Vietnam).