Debt-watcher S&P Global’s affirmation of the Philippines’ investment grade status is a vote of confidence in the country’s medium-term growth prospects despite challenges posed by COVID-19, the government’s chief economic manager and central bank governor said.

Finance Secretary Carlos G. Dominguez III and Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno welcomed the credit rating affirmation by S&P, noting that the Philippines continues to defy the wave of rating downgrades across the globe.

Dominguez said that while the Philippines suffered from the shocks of the pandemic-driven health and economic crises, its solid financial buffers and prudent fiscal management have placed the nation in a relatively strong position.

“Even as we significantly increase public spending to contain the spread of the virus, save lives, and induce economic recovery, we have managed to keep our debt metrics within manageable levels,” Dominguez said.

“S&P’s affirmation of its ‘BBB+’ rating supports our optimism that once this health emergency is contained, we will be able to bring back our deficit and debt ratios as well as our growth momentum to pre-pandemic levels,” he added.

From 34.1 percent in 2019, the Philippines’ general government debt as a percent of gross domestic product (GDP), per S&P’s estimates, increased to 48.8 percent in 2020.

But despite the uptick, this level is much lower than S&P’s estimate for Malaysia at 74.6 percent, and comparable with Thailand’s 48.1 percent and Indonesia’s 38.6 percent.

Meanwhile, Diokno said the move of S&P to keep the country’s BBB+ credit rating has echoed their view that the impact of the COVID-19 crisis on the economy will be transitory and that the Philippines still enjoys bright medium-term growth prospects.

Prior to the pandemic, Diokno cited that the country was already on the verge of becoming an upper middle-income economy and had already posted significant strides in poverty reduction.

“We expect to go back to that trajectory soon, as vaccination rollout continues and as we push for vital economic reforms,” Diokno said.

On the part of the BSP, he assured that the central bank will continue to promote financial digitalization to usher in faster economic recovery and growth.

He added that the BSP will continue to promote Islamic banking for a more inclusive financial system.

“We will also remain steadfast in our commitment to price stability, prudent supervision of financial institutions under our remit, stability of the financial system, and efficient payments and settlements system—all of which help provide an enabling environment for faster and more inclusive growth,” Diokno concluded.

On Thursday, S&P Global affirmed the Philippines’ investment grade credit rating of “BBB+” with a “stable” outlook.

The credit rating with S&P is the highest among its ratings with international debt watchers—the Philippines is rated one notch lower at “BBB” by Fitch Ratings and its equivalent Baa2 by Moody’s Investors Service.

It is also a step away from the minimum rating within the stellar “A” territory. The “stable” outlook indicates the absence of factors that could trigger an upward or downward adjustment in the rating over the short term.