Debt watcher Fitch Ratings is apparently not being swayed by attacks against the Duterte administration, particularly its economic policies, noting that the agency is likely to raise its credit rating for the Philippines.
Sagarika Chandra, associate director of sovereigns team at Fitch Ratings, said the Philippines could see its credit rating improve to “A” from the current “BBB”. Its outlook could also be upgraded to “positive” from “stable”.
This is due to the “very strong” macroeconomic fundamentals of the country.
“The macro story of the Philippines is very strong and it has stayed intact. Also, to add the infrastructure program of the government, that still remains on track,” Chandra said in an interview with the ABS-CBN News Channel (ANC).
Chandra noted that to get an “A” rating, the Duterte administration must sustain its “strong performance” in the macroeconomic front and further bring down its debt-to-GDP ratio.
An “A” rating and “positive” outlook will allow the country to borrow money at much lower rates. It is also an encouraging bet on the economic progress of the country, which will impact positively in its bid to attract more investments.
This also shows that what the naysayers are saying about the Duterte administration is not based on sound assessment. For instance, Chandra said what the administration critics are claiming that the review being done by the government on several state contracts with the private sector will drive away investors is not an accurate statement.
Also, Chandra said the effect of the novel coronavirus to the economy will not be that much because tourism only contributes 3 percent to the GDP.
“Looking at these factors together, it’s a credit that’s moving at the right direction,” Chandra said in the interview with ANC’s Market Edge.