The Philippines has once again received a credit rating upgrade from Japan-based credit rating agencies Japan Credit Rating Agency Ltd. (JCR) and Rating and Investments Information, Incorporated (R&I). The Southeast Asian nation is now rated at BBB+ with JCR and BBB with R&I, with both firms saying that the country’s economy has a stable outlook.
According to the two firms, the country’s continued economic growth is growing steadily at around 6% and says that risks are limited in terms of both fiscal and external positions. The rating upgrade also reflects the government’s good housekeeping in terms of improving fiscal and external position, maintaining stable social and political situations and increasing the number of opportunities for economic growth.
The report of the two companies also stresses that the major driver in the Philippines’ economic growth is strong household consumption, remittances from overseas Filipino workers and increase in capital investments.
A country’s sovereign investment grade is a reflection of its economy’s attractiveness to investors. It tells capitalists it is safe to do business in the country and encourages them to invest capital into the market. To be able to maintain (if not improve) the country’s current rating, both JCR and R&I recommend that the Philippines should improve per-capita income, increasing infrastructure investments to at least 5% of the GDP and enhance tax collection.