The Department of Finance (DOF) said that enhancing the country’s creditworthiness has a direct positive impact on ordinary Filipinos, especially the most vulnerable, as it helps generate additional funding to support essential social services and improve their quality of life.

Finance Secretary Benjamin E. Diokno explained as he debunked the misconception that sovereign credit ratings hold no tangible benefits, emphasizing that they can generate savings for both the government and consumers, thereby contributing to putting food on the table for the Filipino people.

“When we have an ‘A’ credit rating, the borrowing costs of the government will of course decline, and also the private sector. That will improve people's livelihood, you can borrow cheaper,” Diokno said.

A high credit rating indicates that the country as a borrower is likely to repay its debts without difficulty. A poor credit rating suggests that it might struggle to keep up with its payments or even fail to make them.

Under the so-called “Road to ‘A’ Strategy,” the economic managers are aiming to achieve the coveted "A" credit rating within the term of President Marcos.

“Our ultimate goal is to get an A rating before the end of the President’s term. We’re fully aware that this is not going to be a walk in the park. But we are committed to work unceasingly to achieve our lofty goal,” Diokno said.

Currently, the Philippines falls short of the “A” rating across all major credit watchers, with Moody's Investors Service rating the country at “Baa2” and S&P Global Ratings at “BBB+” while Fitch Ratings has assigned a “BBB” rating.

Fitch, Moody's, and S&P may not be familiar names to most ordinary Filipinos because their job involves evaluating the creditworthiness of countries, which is a complex process that may not be easily understood by people.

Finance Undersecretary Zeno Ronald R. Abenoja said that if the credit ratings of the Philippines are significantly improved, it would result in reduced interest expenses for the government, meaning less money would need to be allocated for borrowing costs.

Abenoja explained that attaining a credit rating of "A" would have a positive impact on the government’s yearly budget, allowing for more funds to be reallocated to essential areas such as healthcare, education, welfare assistance, housing, and other crucial services.

The national government dedicates approximately 10 percent to 11 percent of its annual budget, or around P576.8 billion to P634.5 billion, to cover borrowing expenses.

“It used to be 30 percent because it was very difficult to borrow before,” Diokno said.

Diokno said that if the creditworthiness of the Philippines improves, it would lead to lower interest rates for Filipinos borrowing money from banks to finance their housing and car purchases.

“Lower borrowing costs, more interest savings, and more funds for social projects,” Abenoja said. “It also provides a signal strong to investors. So right now, we get favorable feedback, it reinforces actually confidence.”

The credit rating is like a report card that debt-watchers give to countries, like the Philippines, to judge their ability to handle their debts and financial responsibilities.

An "A" credit rating is like getting an excellent grade, meaning the Philippines is seen as a trustworthy borrower with a low risk of not being able to pay back its debts.

Moreover, having an "A" credit rating will make the Philippines attractive to people and organizations who want to invest or lend money because they see the country as a safe and reliable place to put their funds.