THE Japan-based Rating and Investment Information, Inc. (R&I) has raised the Philippines’ credit rating from BBB to BBB+ on 07 February 2020, the Philippine Embassy in Tokyo said.
In a report to the Department of Foreign Affairs (DFA), the Embassy said the upgrade was made in view of the steady progress of the government’s reforms to modernize the tax system, the prioritization of the socio-economic agenda, the launch of the Bangsamoro Transition Authority (BTA), and the Build, Build, Build program.
The country’s real gross domestic product (GDP) growth slowed down to 5.9 percent in 2019 due to the delayed approval of the budget bill, however, the country will recover to more than 6 percent of R&I projects in 2020 and beyond. Increasing receipts from the Business Process Outsourcing (BPO) industry will also contribute to the growth.
Strong investment increased imports of capital and intermediate goods, resulting in larger trade deficits.
The robust foreign direct investment outweighs the current account balance, which has been in deficit since 2016. The government is also actively-seeking bilateral official development assistance and loans from multilateral development banks.
The R&I provides services such as credit ratings, research and analysis of financial and capital markets, research and analysis of asset management, performance evaluation and consultation regarding pension fund management, and analysis and evaluation of finances and creditworthiness.