ACHIEVING an “A” credit rating remains possible despite downgraded outlooks from two of the so-called “Big Three” rating firms, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said.
“That’s still the plan,” the central bank chief told reporters last week.
“It’s a bit difficult right now, but if these things go away, then we should be on the road [to an ‘A’ rating],” he added.
Fitch Ratings last week lowered its outlook for the Philippines to “negative” from “stable,” which could lead to a ratings downgrade. This followed S&P Global Ratings’ move earlier this month to also revise its outlook to “stable” from “positive.”
Both Fitch and S&P, which respectively maintained their “BBB” and “BBB+” ratings, said the outlook revisions were due to rising risks from the war in the Middle East.
Moody’s Ratings, meanwhile, rates the country “Baa2” with a “stable” outlook.
The Marcos administration has targeted an upgrade to “A” before its term ends in 2028, but observers have said that this has become unlikely given domestic and global uncertainties.
Remolona said that while fiscal consolidation efforts and structural reforms are moving in the right direction, external developments remained a key variable that could either accelerate or delay the upgrade.
Last week, the BSP said that Fitch’s move did not “imply [that] a rating change is inevitable.”
The negative outlook, it said, “underscores the need to address emerging risks affecting the country’s credit profile.”
