Next ambitious goal: ‘A’ credit rating for PH
DOMESTIC economic managers have set a higher goal for the next two years: earning an “A” grade from international credit rating firms.
Achieving this would cement the country’s position as having one of the world’s most stable economies with the potential to lift millions out of poverty.
“The next sensible target for the economy would be to reach the ‘A’ category within the next few years,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said in a statement.
On Friday, Standard & Poor’s (S&P) affirmed the Philippines’ sovereign credit rating at “BBB,” or two notches above junk status.
Sovereign ratings are a measure of the Philippine government’s creditworthiness. Because the stability of the state’s finances is related to the country’s performance, credit ratings also serve as a proxy grade for the economy.
Higher ratings also mean the government demand lower rates when it borrows from lenders. This can translate to lower interest rates for consumers and businesses borrowing from banks, which use state-issued IOUs as benchmarks for their loans.
S&P assigned a “stable” outlook on the rating, which is one notch above the minimum investment grade and which was bestowed to the Philippines in May last year.
Moody’s Investor Service has a similar grade for the Philippines, while Fitch Ratings grades the country one notch lower.
