Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the goal of attaining an “A” investment rating by 2022 will remain on the table if the economy rebounds strongly next year in the aftermath of the coronavirus disease 2019.
In an online press briefing on Thursday, Diokno reiterated the priority of the government right now would be to save lives and the livelihood of the people adversely impacted by the pandemic.
“Our [earlier] goal [of attaining an ‘A’ rating] is by 2022… Whether we accomplish that is secondary right now… [But] assuming we have a U-shaped recovery, then the ‘A’ rating [remains] on the table…”Diokno said.
“But we have to have more reforms and pass more legislations… But for now, [the] priority is saving lives and saving livelihoods…,” Diokno said.
Diokno said in an earlier briefing the ambitious goal was put in the backseat because of the impact of the pandemic that required the government to prioritize help to the people.
S&P Global Ratings rates the Philippines “BBB+” with a stable outlook. The rating was given in May last year. Amid the pandemic, S&P affirmed the rating and the outlook last month. The BBB+ rating”•the highest in the country’s history”•is a notch away from the most-coveted “A”rating category.
Fitch Ratings gave the Philippines an investment grade rating of “BBB” with a stable outlook earlier. The rating of BBB was affirmed and the outlook of positive was revised to stable also last month.
Moody’s Investors Service, meanwhile, gave the country an investment grade rating of “Baa2” with a stable outlook earlier, which was affirmed in July 2018.
The government earlier said the economy might contract between 2 percent and 3.4 percent this year due to the impact of the pandemic.
The projection was way below the earlier forecast of a 6.5-percent-to-7.5-percent growth made before the onset of the disease in the latter part of 2019.
The interagency Development Budget Coordinating Committee, however, expects the GDP growth to grow 7.1 percent to 8.1 percent in 2021.
S&P last week affirmed the country’s rating at “BBB+” with a stable outlook. S&P said the affirmation of the Philippines’ credit rating reflected its “expectations that the economy will continue to achieve above-average growth over the medium term, which will drive constructive development outcomes and underpin broader credit metrics.”
The debt watcher forecasts the economy to contract 0.2 percent this year and strongly bounce back with a growth of 9.0 percent next year.