LETTERS FROM DAVAO
By Jun Ledesma
Stable and Investment grade
Share
ON the eve of Independence Day celebration, the Philippines inched one notch in credit rating, another significant step that reaffirms the economic stability of the country on top of belonging to the prestigious league of the investment-grade community of nations. Japan Credit Rating Agency just raised the BBB grade of the Philippines to “A-“
While the Philippines ' economic growth is under downward pressure JCR noted however that this was on account of the impact of the coronavirus disease 2019 (Covid-19) pandemic that resulted in temporary reduction of economic activity as the government implements quarantine measures to contain the spread of the virus.
For most of us, we only know of Moody’s, S&P and Fitch rating institutions. JCR, as financial globalization has made progress, emerged as the most remarkable credit rating agency of Japan and is officially recognized in the United States, Europe, Turkey, Hong Kong, Indonesia and Thailand among others.
But what is the relevance of a sovereign credit rating to countries like the Philippines which is an emerging economy in the world? Among investors credit ratings gives them “insights into the level of risk associated with investing in the debt of a particular country, including any political risk”.
Last year, Fitch, S&P and Moody’s elevated the credit rating of the Philippines to BBB status which confirmed its investment grade. It was the first time that the country landed in the category and is indubitably a feather in the cap of Finance Sec. Sonny Dominguez, who heads the economic team of Pres. Rodrigo R. Duterte administration. In my long distance interview with Secretary Dominguez however, he insisted that none of these could have happened if not for the strong leadership of the President Duterte, the Cabinet members, the Banko Sentral ng Pilipinas and the legislators.
Last week’s JCR rating of “A-“, amidst the pandemic and the brouhaha over the anti-terrorism bill, was indeed a welcome development. For JCR the country’s “high and sustainable economic growth performance underpinned by solid domestic demand,” makes the Philippines investment grade and stable.
It’s not Duterte administration saying that. It’s the prestigious credit rating agencies in the world. These eloquently argue against negative issues conjured by Maria Ressa and her foreign financiers, the whining and moribund political opposition and its allies in the radical left that parade as legal fronts who see nothing but gloom in the country. Surely, this is not the kind of economic environment which Ressa described as “worse than any war zone”.
Comments
About the Columnist
Mr. Jun Ledesma is a community journalist who writes from Davao City and comments from the perspective of a Mindanaoan.