By Chino S. Leyco
A Chinese credit rating agency gave the Philippines’ planned issue of “Panda bonds” its highest rating, citing the country’s “strong and consistent economic growth,” low level of external debt as well as ample foreign and current account reserves, and strengthened economic relations between the two countries.
In a statement released by the Department of Finance (DOF), the government said that China Lianhe Credit Rating Co., Ltd. assigned an “AAA” rating with a stable outlook for the Duterte administration’s planned insurance of RMB1.46-billion Panda bonds.
Lianhe Ratings also factored in the strong economic ties between Manila and Beijing as well as the Duterte administration’s “stable source of payment from growing government revenues” in its positive credit rating assessment for the Philippines.
Lianhe Ratings, meanwhile, expects the Philippine economy, as measured by its gross domestic product (GDP), to grow by around 6.80 percent this year.
“At the same time, the unemployment rate of the Philippines is expected to remain stable and CPI (Consumer Price Index) growth may stay within the target band (2 percent to 4 percent) set by the BSP (Bangko Sentral ng Pilipinas),” the credit rating agency said in its report.
It likewise said the successful implementation of President Duterte’s 10-point socioeconomic agenda, citing among them the first package of the comprehensive tax reform, Tax Reform for Acceleration and Inclusion (TRAIN).
“[TRAIN] will help the Philippines achieve more rapid and equitable economic growth in the following years,” Lianhe Ratings said.
In its credit rating report on the Philippines, Lianhe said the country’s strengths lie in its strong and consistent economic growth, with employment continuously improving, along with government debt ratios that are continuously improving and well covered by fiscal revenue.