MANILA, Philippines – The Japan Credit Rating Agency (JCRA) has affirmed the Philippines' investment grade rating of BBB, citing the country's resilience to external shocks, the steady inflow of overseas Filipino workers remittances, and improvement in the government's fiscal position.
JCRA noted, however, that the ratings are constrained by inadequate infrastructure. BBB is a grade rating above junk status.
“The country definitely needs to develop infrastructure and improve the investment environment to attain rapid and sustainable economic growth. JCRA will watch how the government will address the challenge and how much progress it will make,” it said.
An investment grade rating makes it cheaper for the country to borrow money abroad and opens the doors to more foreign investors.
JCRA expects the Philippine economy to grow above 6 percent this year with the reconstruction of areas hit by typhoon “Yolanda” and robust domestic demand.
The rating agency also sees continued improvement in the government’s fiscal position.
“It will be imperative for the government to further strengthen its tax base in order to ensure infrastructure development without undermining the momentum for improvement of its fiscal position,” JCRA said. -- With ANC