The country could attract more foreign investments that will be partly driven by the Japan Credit Rating Agency’s stable economic outlook for the Philippines, the Department of Finance said.

DoF said the Japanese agency gave the Philippines an investment-grade credit rating of A minus, signaling a stable economic outlook.

Citing the report from the credit rater, DoF said the high rating stems from the country’s strong consumption of goods and services and low debt.

The DoF said these increase confidence of investors in the Philippines that they will be duly paid and foreign businesses will have markets.

“Having a high credit rating is a major win for all as this means that the Philippines can have more access to cheaper financing from our development partners and the international capital markets,” DoF Secretary Ralph Recto said.  

“It also attracts more foreign direct investments into the country, which will create better employment opportunities for Filipinos,” he added.

Increase in household consumption

The Philippine Statistics Authority reported that the economy grew by 5.6 percent last year as household consumption increased by 5.6 percent amid high interest rates and inflation downtrend in the fourth quarter.

Global data showed that the Philippine economy was among the fastest in Southeast Asia, including  Vietnam and Indonesia with the same 5.1-percent growth, Malaysia with 3.7 percent, and Thailand with 1.9 percent.

For this year, the Japan Credit Rating Agency projects that the Philippine economy measured in gross domestic product or GDP to grow faster to 6 percent.

The credit rater said it is optimistic the Philippines can implement many projects as its debt obligations declined.

The Bureau of the Treasury reported the debt-to-GDP ratio improved to 60.2 percent last year from 60.9 percent in 2022.

It added that the budget deficit of the national government also shrank to 6.2 percent of GDP from 7.3 percent during the period.

Highly encouraging

“This latest development is highly encouraging and shows that the fiscal and economic policies pursued by the Marcos Jr. administration are on track to achieve a growth-enhancing fiscal consolidation,” Recto said.

The DoF said better government revenues will help keep its infrastructure spending  within 5 to 6 percent of GDP.

It added that the Japanese credit rater also deems the Maharlika Investment Fund or MIF, the first sovereign fund of the Philippines, as another economic growth driver that will accelerate infrastructure projects. 

Rafael Consing Jr., president of Maharlika Investment Corporation or MIC, the fund’s manager, said he plans to first expand the energy sector using fund proceeds.