S&P Global Ratings expects the Philippines to sustain strong economic growth in the next two years, stressing a “positive” credit outlook and investment-grade ratings for the Southeast Asian country.

In a statement on Tuesday, the Bangko Sentral ng Pilipinas (BSP) said S&P gave the Philippines an investment grade of “BBB+” for long-term debts and “A-2” for short-term debts.

S&P projects the country’s economy to grow by 5.5 percent this year, signaling higher government revenues to pay its debts and implement social and infrastructure projects.

BSP Governor Eli Remolona Jr. attributed the favorable outlooks to the government’s recent investment and fiscal policies and easing inflation rates in the country.

“The BSP remains committed to promoting price stability, financial stability, and an efficient payment system to support sustainable economic growth,” he said.

With the positive credit outlook, the government can borrow funds for its projects at cheaper costs and entice more businesses to expand in the Philippines in driving higher economic growth.

According to the Philippine Statistics Authority, the Philippine economy grew by 5.8 percent on average over the first three quarters of the year, faster than Indonesia’s 4.9 percent, China’s 4.6 percent, and Singapore’s 4.1 percent.

Economists said the growth was driven by generally stable inflation which the national statistician said slightly rose to 2.3 percent last month from 1.9 percent in September after several typhoons hit the country.

From January to October, inflation rose by 3.3 percent or within the BSP’s target band of 2 to 4 percent.

S&P’s positive credit outlook for the Philippines affirms its capabilities to reach the “A-” rating which will attract even more investors to the country and low-cost loans for job-generating projects.

Still confident

Department of Budget and Management Secretary Amenah Pangandaman said the government’s economic team is still confident the economy will expand within its growth target of 6 to 7 percent this year.

This, despite the slower third-quarter economic growth — 5.2 percent from 6.4 percent in the previous quarter — due to disrupted government and private-sector activities due to the series of typhoons.

“We’re still trying to keep up, and we’ve been releasing the budget to agencies. Based on the numbers, the agencies are utilizing their budget,” Pangandaman told media on Tuesday at the Asian Development Bank’s discussion on Islamic banking at Peninsula Manila in Makati City.

She added that the government maintains an “elbow room” in ensuring US dollar-denominated debt payments are fulfilled amid the peso depreciation at P58 to P59 per dollar.

Better 2025

Pangandaman expects faster implementation of government projects next year as it collects more revenues under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

“Officers-in-charge are already crafting its implementing rules and regulations. Next year, we are due to go abroad again for the economic briefings to foreign investors,” she said.

CREATE MORE offers registered business enterprises a lower corporate income tax of 20 percent, a 100 percent additional reduction on power expenses for manufacturing firms, and 50 percent deduction for expenses related to trade fairs and tourism reinvestments until 2034.