Japan credit watcher maintains Philippines’ investment grade rating

Japan Credit Rating Agency Ltd. affirmed the Philippines’ credit rating at A- with a stable outlook, citing the continued commitment of the Marcos Jr. administration to implementing important tax reform packages and advancing the country’s infrastructure development program.

According to JCRA, the country’s strong and sustained economic growth performance and its ability to withstand external shocks were key factors in the decision to maintain the ratings.

However, JCRA also acknowledged the issue of income disparity and emphasized the importance of addressing it through rural development initiatives.

The tax reform program, which includes a review of real property appraisal, tax on digital transactions, and the excise tax on single-use plastics, is expected to support the government’s efforts to reduce the budget deficit and bring down government debt.

Additionally, despite the current account deficit, the increase in imports for raw and intermediate goods and capital goods is expected to bolster economic recovery.

JCRA expressed confidence in the country’s foreign currency liquidity position, noting that the forex reserves of $99.3 billion are sufficient to cover 6.1 times its short-term external debt.

The agency remains optimistic about the Philippines’ resilience in the face of global risk-off moves.