MANILA, Philippines - Japan Credit Rating Agency Ltd. has affirmed its ‘BBB’ rating on the Philippines with a stable outlook amid expectations the country’s strong economic growth will be sustained.
“The ratings mainly reflect resilience to external shocks, robust domestic demand underpinned by OFW (overseas Filipino workers) remittances, and progress on improvement of fiscal soundness,†JCR said in a statement.
However, it noted that “the ratings are constrained by the country’s challenging investment environment, in particular its inadequate infrastructure albeit improving partially such as roads.â€
JCR said it expects Philippine economic growth to accelerate above six percent this year on strong domestic demand.
The firm also expects the country’s fiscal position to continue improving through “enhanced tax collection efficiency and rationalization of fiscal incentives.â€
The current account component of the balance of payments position is also seen remaining in surplus due to strong inflows from OFW remittances, business process outsourcing revenues, and tourism receipts.
“The country definitely needs to develop infrastructure and improve the investment environment to attain rapid and sustainable economic growth,†JCR said. “JCR will watch how the government will address the challenge and how much progress it will make,†the firm said.