FINEX welcomes Philippines' credit upgrade despite COVID-19 crisis

The Financial Executives Institute of the Philippines (FINEX) has lauded the country’s latest credit upgrade despite the economic contraction experienced amid the COVID-19 pandemic.

“Natutuwa ang private na sa gitna nitong crisis nagkaroon pa tayo ng credit rating upgrade,” FINEX chairman Eduardo Yap said during the Laging Handa public briefing on Saturday.

The Japan Credit Rating Agency Ltd. (JCR) has upgraded the Philippines' foreign currency long-term issuer rating to 'A-

The JCR noted that the Philippines' fiscal soundness is expected to be impaired, as its fiscal deficit is "justifiable" and government debt is "comparatively subdued."

Yap said that before the pandemic, the Philippines has sound macroeconomic fundamentals.

“Temporary po ito at health-related,” he said, noting that once a cure and vaccine are available the economy can be revitalized.

The latest JCR rating is a notch higher than the 'BBB+' in July 2015, which indicated that the country had an "adequate" level to honor financial obligations, but the certainty was "likely to diminish in the future than with the higher rating categories."

A higher credit rating is generally seen as favorable, as this would give the country lower borrowing costs. —KG, GMA News