DOF: ‘A’ credit rating would lower borrowing costs, boost investment

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A sovereign credit rating upgrade to ‘A’ would lower borrowing costs for the Philippines and increase investor confidence, as it would indicate that the risk of default is low and the repayment capacity is strong, Finance Secretary Benjamin Diokno said.

Finance Sec. Benjamin Diokno speaks during the DOF's weekly press chat on Aug. 4, 2023. Photo from DOF

“With the credit rating upgrade, it will lower the borrowing cost of the government… that will provide savings for the national government,” Finance Undersecretary Zeno Abenoja said at the same briefing. The Finance chief emphasized that an ‘A’ credit rating “would affirm the Philippines’ creditworthiness and would serve as a strong signal to local and international business and financial communities that the country is conducive to long-term investments.”

“It [IAC] aims to effectively coordinate the efforts of member agencies to develop, execute, and monitor the implementation of the Road to A Roadmap. Moreover, the IAC aims to enhance engagements with analysts and investors; coordinate engagements with credit rating agencies and third-party raters; and increase the Philippines’ visibility through traditional and technology-based platforms,” Diokno said.

On fiscal management, the Cabinet official said that the government must sustain tax reform while maintaining growth-oriented fiscal operations and balance risk-and-return trade-offs through rigorous debt management and diversification.

 

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