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S&P recognizes PH’s sound economy


The government’s top two economic managers said S&P Global’s decision to uphold the investment grade credit rating is a recognition of the Philippines’ sound macroeconomic fundamentals that would enable the country to weather a crisis.

Finance Secretary Carlos G. Dominguez III, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno and Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the affirmation of the country’s “BBB+” rating with a “stable outlook” is a vote of confidence.

Last Saturday, S&P announced that it is maintaining the Philippines’ credit score, currently a notch away from the minimum score within the “A” territory despite the global devastation wrought by the coronavirus pandemic.

The favorable decision for Manila comes amid a wave of credit rating downgrades and negative outlook revisions worldwide as the pandemic wreaks havoc on productivity of economies.

The debt watcher forecasts the economy to contract by 0.2 percent this year and then strongly bounce back with a growth of 9.0 percent next year.

Dominguez said the affirmation of the ‘BBB+’ rating with ‘stable’ outlook is an unequivocal recognition by S&P of the resilience of the Philippine economy to regain its high-growth trajectory in the new normal.

“We’re confident that our government’s four-pillar strategy to deal with the pandemic will see us through this global health emergency as we remain focused on saving lives and protecting communities while gradually lifting mobility restrictions to restart the economy,” he said.

Dominguez also said President Duterte’s reform agenda continues amid the coronavirus outbreak, particularly with their latest push in the Congress for the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill.

For his part, Diokno said there is room for the central bank to do more, even as it has already implemented a long list of COVID-19 response measures.

Diokno also said the critical institutional reforms and sound policy management in the past placed the country in an advantageous position and gave them monetary space to carry out further easing, if necessary.

“While being mindful of our price and financial stability mandates, we are thinking outside the box to enact policies that ultimately help safeguard the lives and livelihoods of our people,” Diokno said.

“Such is our solemn responsibility in this once-in-a-lifetime crisis, and I am confident that our approach will demonstrate the resilience of our country,” he added.

Chua, meanwhile, highlighted the government’s economic recovery program, which entails helping small businesses to bounce back, such as through ample access to credit, supporting workers and their families through targeted wage subsidies, and cash-for-work programs.

It also entails fast-tracking of programs like the “Build, Build, Build” infrastructure drive and a contact tracing initiative that aims to hire 136,000 contact tracers to help mitigate the spread of COVID- 19 and increase employment.

“No country has been spared from the economic effects of this global pandemic, but our strong economic fundamentals and inclusive recovery measures will power our return to growth,” Chua said.

“Thanks to our ample buffers and fiscal space, we can jumpstart domestic demand by investing more in healthcare, infrastructure, and the entire food value chain,” he added.

Source: Manila Bulletin (

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