Metro Manila (CNN Philippines, November 11) – Credit watcher Fitch Ratings retained its “stable” outlook on the Philippines towards the latter part of 2023, acknowledging the country’s strong medium-term growth prospects, slowly declining debt, macroeconomic stability, and sound economic policies.
The Philippines’ credit rating has stood at “BBB” or stable since December 2017. However, in July 2021, Fitch downgraded it to “negative” amid the COVID-19 economic downturn.
But, in May, the credit watcher put the Philippines back to stable, where it remains until now. Fitch’s current outlook also entails that it will likely remain unchanged over a one-to-two year period.
Fitch forecast that the country’s inflation would cool to 3.5% by 2025 after it dipped to 4.9% in October 2023.
It also projected that gross domestic product (GDP) would surpass 6% over the medium term, while government debt would decline to 54% of the GDP in 2025.
Moreover, Fitch said the Philippine government’s response to the volatile prices of goods has been measured. Over the past year, the cost of agricultural commodities such as rice, sugar, and onions; and oil products saw sharp increases.
\”We welcome Fitch’s recognition of the work being done by the central bank to bring inflation back to within the target range,\” Bangko Sentral ng Pilipinas (BSP) Gov. Eli Remolona said Saturday.
\”The BSP will remain data dependent in managing inflation expectations in an effort to avoid the second-round effects of supply shocks,\” he added.
Meanwhile, Fitch listed some factors which could set the Philippines back to a \”negative\” credit outlook. Among them are the following:
\”Macro: Reduced confidence in strong, stable medium-term economic growth and continued adherence to sound economic policies\”;
\”Public Finances: Failure to gradually reduce the government debt/GDP ratio, for example, due to slowing fiscal consolidation to support growth\” ; and
