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Recto urges vaccine program boost amid Philippines’ negative credit outlook

Senators on Tuesday said Fitch Ratings' downgrading of the Philippines’ credit outlook to negative was “unfortunate but expected” and a “cause of concern," urging the government to hasten the vaccination program and release public funds to start economic recovery.

“It’s unfortunate but expected. Our response to COVID has not been ideal. Our vaccination program is much behind our target to inoculate 70 million Filipinos with two doses this year,” Senate President Pro Tempore Ralph Recto said in a text message.

He also flagged the slow release of Bayanihan funds and the budget for 2021 infrastructure projects.

“The economy last year contracted most in the region and recovery this year has been [too] slow with government withholding release of funds needed to defeat COVID under Bayanihan laws and to help create jobs in construction and manufacturing through Build, Build, Build spending under the [General Appropriations Act] 2021,” he said.

“[I] hope government acts swiftly and release funds needed to fight COVID and to get people back to work,” he added.

Meanwhile, Senate Finance Committee chairman Sonny Angara said the negative credit outlook is “definitely a cause for concern” but the government can adopt measures to address the economic situation.

“Economic recovery has been slower than expected so government can help lead the recovery by pump-priming and taking up the slack in activity of the private sector. More robust public sector spending starting with the 2021 budget implementation and fast tracking any applications of the private sector that are pending with any government agencies,” Angara said in a separate text message.

“We are dependent on the vaccine rollout for our recovery, but there are ways to speed this up if all hands are on deck, so to speak,” he added.

On Monday, Fitch Ratings has affirmed the country's long-term foreign-currency issuer default rating at "BBB" but lowered the Philippines' credit outlook to negative from stable due to the economic fallout amid the COVID-19 pandemic.

It said the revision of the country's outlook to negative "reflects increasing risks to the credit profile from the impact of the pandemic and its aftermath on policy-making as well as on economic and fiscal out-turns."

Finance Secretary Carlos Dominguez II said this rating will only be temporary.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno said he expected the drag to be "transitory."

Fitch first removed the positive outlook on the Philippines' rating BBB in May last year. — BM, GMA News