Fitch downgrades PH outlook
Published May 8, 2020 12:00 am
By CHINO S. LEYCO
One of the three major international credit rating agencies lowered its favorable outlook for the Philippines as economies worldwide continue to grapple with the coronavirus disease (COVID-19) pandemic.
Fitch Ratings. (Photo grabbed from Wikipedia) | Manila Bulletin
From “positive,” Fitch Ratings lowered its outlook for the country to “stable,” but at the same time kept Manila’s credit rating at “BBB,” which is a notch above the minimum investment grade.
A "stable" outlook indicates that the Philippines’ rating will likely be maintained over the next 18 months to 24 months.
The pandemic has resulted in a wave of unfavorable credit rating actions worldwide. For the first four months of this year, Fitch has downgraded the rating of 21 sovereigns and assigned negative outlook to the rating of 25 countries out of 119 countries that it rates.
In response to Fitch's latest assessment of the Philippines, the country's top economic officials acknowledged that the Philippines, just like many countries across the globe, is confronted with one of the most difficult challenges to mankind in recent history.
They, however, stressed that the country was in a strong position going into this crisis and has built buffers that are helping mitigate the impact on the economy.
"Structural reforms and sound economic management over the years have provided us with monetary and fiscal space to safeguard lives and support livelihoods at this critical time," Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.
"The BSP's long list of prompt and decisive policy support measures – including the cumulative 125 basis points cut in the policy rate and the 200 bps reduction in the reserve requirement ratio so far this year – shows that we have been putting our elbow room to good use," he added.
Moving forward, Diokno assured that the BSP stands ready to use its full range of policy tools to help address the impact of the coronavirus pandemic on the domestic economy.
For his part, Finance Secretary Carlos G. Dominguez II said the Philippines is in a good fiscal position to deal with the unprecedented challenges posed by COVID-19 contagion that has brought the global economy to the cusp of a recession.
Dominguez said the government is capable of meeting the huge financial requirements of its COVID-19 response because of the prudent macroeconomic and fiscal management policies set in place by President Duterte since he assumed office in 2016.
Fitch Ratings. (Photo grabbed from Wikipedia) | Manila Bulletin
From “positive,” Fitch Ratings lowered its outlook for the country to “stable,” but at the same time kept Manila’s credit rating at “BBB,” which is a notch above the minimum investment grade.
A "stable" outlook indicates that the Philippines’ rating will likely be maintained over the next 18 months to 24 months.
The pandemic has resulted in a wave of unfavorable credit rating actions worldwide. For the first four months of this year, Fitch has downgraded the rating of 21 sovereigns and assigned negative outlook to the rating of 25 countries out of 119 countries that it rates.
In response to Fitch's latest assessment of the Philippines, the country's top economic officials acknowledged that the Philippines, just like many countries across the globe, is confronted with one of the most difficult challenges to mankind in recent history.
They, however, stressed that the country was in a strong position going into this crisis and has built buffers that are helping mitigate the impact on the economy.
"Structural reforms and sound economic management over the years have provided us with monetary and fiscal space to safeguard lives and support livelihoods at this critical time," Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.
"The BSP's long list of prompt and decisive policy support measures – including the cumulative 125 basis points cut in the policy rate and the 200 bps reduction in the reserve requirement ratio so far this year – shows that we have been putting our elbow room to good use," he added.
Moving forward, Diokno assured that the BSP stands ready to use its full range of policy tools to help address the impact of the coronavirus pandemic on the domestic economy.
For his part, Finance Secretary Carlos G. Dominguez II said the Philippines is in a good fiscal position to deal with the unprecedented challenges posed by COVID-19 contagion that has brought the global economy to the cusp of a recession.
Dominguez said the government is capable of meeting the huge financial requirements of its COVID-19 response because of the prudent macroeconomic and fiscal management policies set in place by President Duterte since he assumed office in 2016.