Connect with us

Hi, what are you looking for?


PHL credit rating supported by economy’s long-term track record

THE Philippine sovereign rating will remain supported by the country’s long-term track record of economic growth, which will be weighed against the damage caused by the pandemic, S&P Global Ratings said.

It said however that the coronavirus continues to pose risks to the economy’s potential.

“The Philippine economy remains among the fastest-growing in the world on a 10-year weighted-average per capita basis. We continue to view this as a credit strength that underpins the sovereign rating,” Yee Farn Phua, director at S&P Global Ratings said in an e-mail.

In the years prior to the crisis, the Philippine economy was growing by about 6% annually on average. However, the economy contracted by a record 9.6% in 2020 as a result of the effective shutdown of the economy.

S&P last affirmed the Philippines’ investment-grade BBB+ rating in May, with a stable outlook. Such an outlook means the rating could be maintained over the next 12 to 18 months.

In its assessment, S&P said it assumed a “healthy” economic recovery which will help improve the country’s fiscal standing, which has weakened because of the coronavirus crisis.

S&P in August said it expects the economy to grow 4.3% this year, downgrading the 6% projection it issued in June as it factored in the impact of the new lockdown as a result of the Delta variant of the virus. It also warned that gross domestic product (GDP) will likely be 12% below where it would have been without the pandemic.

S&P has said it expects 7.7% growth in 2022.

The third quarter growth rate of 7.1% was a welcome development and could allow the economy to recover to pre-pandemic levels by mid to late 2022, according to Vincent Conti, senior economist at S&P Global Ratings. However, he also warned that the virus could remain a threat to this rebound.

Last week, the Philippine Statistics Authority reported that GDP rose 7.1% in the three months to September, turning around from the 11.6% decline a year earlier. The final result was lower than the 12% annual expansion in the second quarter due to the August lockdown.

The economy grew 3.8% from a quarter earlier.

“With a low vaccination rate and easing restrictions over the upcoming holidays, there remains the potential for further spikes in cases to once again at least put a dampener on the recovery,” Mr. Conti said in an e-mail.

Johns Hopkins University estimates that 34.14% or 36.907 million of the population have been fully vaccinated against the virus. The government is hoping that 70 million Filipinos will get their jabs by the end of the year.

Fitch Ratings in July revised its outlook for the Philippines’ BBB credit rating to “negative” from “stable,” citing the impact of the prolonged pandemic. A negative outlook means the rating could be downgraded in the next 12 to 18 months. — Luz Wendy T. Noble

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



REUTERS Shares of Germany’s largest bank Deutsche Bank plunged on Friday as investors fretted that regulators and central banks have yet to contain the...


US President Joseph R. Biden (left) and Canada Prime Minister Justin Pierre James Trudeau (right) original images from Reuters OTTAWA – US President Joe Biden and...


STOCK PHOTO Image by F1 Digitals from Pixabay LONDON – Most patients admitted to hospitals with acute viral infections are given antibiotics as a precaution against...


SYDNEY, – New Zealand Foreign Affairs Minister Nanaia Mahuta said on Saturday she had expressed concerns over the South China Sea and tensions in the Taiwan...


REUTERS WASHINGTON/NEW YORK – The banking crisis set off by the swift collapse of Silicon Valley Bank has exposed a sharp disconnect between Washington and Wall Street....


Intel Co-Founder Gordon Moore link: SAN FRANCISCO – Intel Corp. co-founder Gordon Moore, a pioneer in the semiconductor industry whose “Moore’s Law” predicted a steady rise...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.