Japan debt watcher gives PH 'A-' rating

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Metro Manila (CNN Philippines, March 10) — The Japan Credit Rating Agency (JCR) affirmed the Philippines' low credit risk rating with a stable outlook despite nagging high consumer prices and global uncertainties, according to the Department of Finance (DOF).

In a statement on Friday, the DOF said a credit rating of A- with a stable outlook "indicates lower credit risk and entails better access to the international bond market and favorable interest rates."

The Japanese firm also said the local banking system remains "healthy on stronger payment capacity and improving employment situation."

The DOF said the national government's outstanding debt settled at 60.9% of gross domestic product (GDP) in 2022, lower than the 61.8% target.

Likewise, the latest cash operations from the Bureau of the Treasury showed that the national government's budget deficit was cut to 7.3% of GDP from 2021's 8.6%.

The affirmation pumps up investor confidence in the Philippines, the DOF said, adding this provided a boost to the current administration's target of attracting more foreign direct investments.

It also reflected the Philippines' "strong" macroeconomic fundamentals as seen by its economic performance in 2022 at 7.6% and its improving labor market.

"The Marcos administration is committed to maintaining sound macroeconomic fundamentals and achieving its fiscal targets by continuing the course of sound fiscal management. The country's recent structural reforms will also enable the country to withstand the pandemic shocks and map a route to recovery," Finance Secretary Benjamin Diokno said.

To tame inflation, the DOF said a whole-of-government approach is needed. It also said the central bank "stands ready to take all necessary policy actions to bring inflation to within the 2% to 4% government target over the medium term."