S&P's outlook upgrade a ‘vote of confidence’ in the Philippines

Finance Secretary Ralph Recto said the S&P Global Ratings' credit rating affirmation and outlook upgrade is a strong vote of confidence in President Ferdinand R. Marcos Jr.'s leadership and sound economic and fiscal policies.

"It reaffirms our stable economic and political environment and that we are on track to achieve a growth-enhancing fiscal consolidation," Recto said in a statement on Tuesday.

"We have a comprehensive Road to A initiative to ensure that we secure more upgrades soon," he added.

S&P Global Ratings on Tuesday revised the Philippines' credit rating outlook to positive from stable and affirmed the country's BBB credit rating.

“The major benefit of having a high credit rating is wider access to cheaper and more cost-effective borrowing costs for the government and the private sector," said Recto.

The finance chief said this will allow the government to allot more funds for its various programs and projects.

In its report, the S&P pointed to the Philippines' above-average growth potential, effective policymaking, fiscal reforms, improved infrastructure and policy environment, and solid external position as the key factors driving the affirmation and outlook upgrade.

It also cited the Philippines’ improvements in the quality of expenditure, which further solidified its economic profile.

In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the revision in the credit rating outlook, indicates a possible upgrade to an “A-” rating within 24 months, helping lower borrowing costs and making the country more attractive to investors.

The BSP said the improved rating or outlook helps the government borrow at lower interest rates, allowing it to fund more services and infrastructure.

This also helps businesses borrow at lower rates, helping fund expansion and job creation.

“The BSP welcomes S&P’s decision. This reflects the work the government has done to improve the economic, fiscal, and monetary environment, enabling strong growth to continue,” BSP Governor Eli Remolona Jr. said.

“The BSP remains committed to promoting price stability, financial stability, and an efficient payment system to support sustainable economic growth," he added.