The Japan Credit Rating Agency (JCRA) has affirmed the Philippines’ investment grade score, citing the country’s robust growth prospects and resilience to volatility in international financial markets.
In a statement this week, JCRA said it also took note of the improvement in the country’s “fiscal soundness”—the result of reforms implemented by the Aquino administration.
The rating agency however noted that the government should not be complacent, saying that improving the quality of infrastructure and making the country more business-friendly would help the Philippines get an even higher grade.
JCRA rates the Philippines’ sovereign debt at BBB, or two notches above junk status. This matches Standard & Poor’s rating on the Philippines.
“The ratings mainly reflect resilience to external shocks, robust domestic demand underpinned by overseas Filipino workers’ remittances, and progress on improvement of fiscal soundness,” JCRA said.
These ratings, however, remain constrained by the country’s challenging investment environment, “in particular, its inadequate infrastructure.”
JCRA expects the Philippine economy to grow upwards of 6 percent in 2014 which, although slower than last year’s 7.2 percent, is still better than most of Southeast Asia.
The rating firm also sees an improvement in the fiscal position of the government, allowing it to spend more on vital infrastructure and social welfare projects.
President Aquino’s economic team wants to keep the government’s budget deficit below 2 percent of gross domestic product.