BSP says affirmed PH credit rating a testament to 'holistic' approach for recovery

ABS-CBN News

Posted at Apr 19 2022 01:10 PM

MANILA - The Japanese debt watcher Rating and Investment Information Inc's decision to affirm the Philippines' BBB+ credit rating with a stable outlook highlighted the success of the government's recovery efforts, the Bangko Sentral ng Pilipinas said Monday.

Aside from the collective drive to curb and recover from the COVID-19 pandemic, the central bank helped with its monetary policy to support recovery, BSP Governor Benjamin Diokno said in a statement. 

“On top of the national government’s measures, the BSP’s proactive COVID-19 response — including historic-low policy rates that supported credit activities, time-bound financing support to the national government, and a long list of regulatory relief measures for banks so that they may continue serving their customers — has helped achieve a holistic approach to Philippine economic recovery”, Diokno said.

The BSP kept the benchmark borrowing rate at 2 percent to support economic recovery in 2021. But analysts are expecting the central bank to wind up stimulus and start tightening interest rates in the latter part of the year.

Diokno also said they are waiting for the right conditions to unwind the stimulus placed during the pandemic.

Investment-grade ratings allow countries access to credit with lower interest rates.

Despite the country's debt-to-GDP ratio rising to 60.5 percent in 2021, it has remained "manageable," officials have said.

Other debt watchers have also maintained the country's credit rating, but with revised outlooks due to the pandemic.

"This is a testament to our ability to strike a careful balance between supporting economic recovery, such as through relief for vulnerable sectors and infrastructure investments, and maintaining order in our fiscal house,” Finance Secretary Carlos Dominguez III said. 

The economy grow 5.7 percent in 2021, outperforming the government estimate of 5.5 percent.

For 2022, the economy is seen to grow by 7 to 9 percent. 

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