Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo who retired Monday said he expects the country to secure the most-coveted “A” rating from major credit rating agencies within the next 18 months.
Guinigundo said to achieve this, the government should work hard to address the issues earlier raised by credit rating agencies.
“We need the support of all government agencies to address the issues raised by credit rating agencies,” he said during the Pre-Sona Economic and Infrastructure Forum at the Philippine International Convention Center in Pasay City.
“On when to achieve that? It is an empirical question… but when those issues were addressed, we can get the ‘A’ rating probably in 18 months,” he said.
S&P Global Ratings raised the Philippines’ long-term sovereign credit rating to “BBB+” from “BBB” with a stable outlook on April 30 this year, given the country’s strong economic growth trajectory, backed by solid government fiscal accounts, low public indebtedness, and the economy’s sound external settings.
The upgrade put the Philippines a notch below the “A-” rating. This also put the country at par with Mexico, Peru, Thailand and Trinidad and Tobago. The rating was also higher than the “BBB” ratings of Italy, Portugal, Hungary, Panama, and Uruguay.
Meanwhile, Fitch Ratings affirmed the Philippines’ investment grade rating of “BBB” last month, citing the country’s sustainable economic growth and strong external position despite the external and domestic risks that threaten further expansion.
Guinigundo assured the Filipino people that the economy remained strong and resilient despite the risks emanating from both the domestic and external fronts.
Guinigundo, who gave an update on the status of the economy on his very last day in government service, said the economic growth was sustainable.
“The Philippine economy remains resilient despite the risks from different fronts,” Guinigundo said, citing the slowing inflation rate, manageable external payments position, and strong banking system.
Inflation averaged 3.5 percent in the first five months, within the government’s target range of 2 percent to 4 percent.
“The banking system remains on solid footing, with double-digit growth in deposits… and more than enough capitalization,” Guinigundo said.
Guinigundo also said the BSP was keeping a “watchful” eye on domestic and external developments to ensure that the financial system remains stable and strong.