In an ambitious pursuit of financial credibility, the Philippines sets its sights on acquiring an “A” investment grade rating for sovereign debt within the next five years.
MANILA, 12th July 2023 – The Philippine government announced today its ambitious plan to secure an “A” investment grade rating for its sovereign debt by 2028. This move signifies the country’s increased focus on elevating its financial standing on the international stage.
The announcement, made by the Department of Finance, comes in response to a recent series of economic improvements and an upward trend in the country’s GDP growth rate. “We see this as a feasible target given our sustained fiscal discipline, growing economy, and the planned reforms in the pipeline,” Finance Secretary Juanito Montebello stated in a press conference.
The ambitious plan, if successful, would help lower borrowing costs and attract more foreign investors, providing a significant boost to the country’s economic growth. The Philippines currently holds a BBB rating from major credit rating agencies, which is two notches below the desired A-grade rating.
The “A” investment grade rating is considered a significant milestone for developing economies, indicating a low risk for investors and a robust and stable economy. A higher credit rating signals to investors that the country is a safe place to invest, which could lead to increased foreign investment and, in turn, boost economic growth.
However, achieving this ambitious target would require significant efforts, such as maintaining fiscal discipline, implementing necessary economic reforms, and ensuring political stability.
Dr. Reynaldo Lopez, a senior economist at the University of the Philippines, noted, “This is an ambitious but feasible goal. The key here is to maintain consistent growth, prudent fiscal management, and ensure a conducive environment for foreign investments. Political stability will also play a significant role.”
The government’s announcement signals the Philippines’ commitment to improving its financial standing and economic growth, and could potentially place the country alongside other high-performing Asian economies.
While the path to an “A” investment grade rating may be challenging, the government’s determination reflects the country’s continuing economic resilience and potential for further growth. With the entire nation’s eyes on this prize, the next five years promise to be a critical period for the Philippines.