Philippines' bid for 'A' credit rating takes backseat in favor of COVID-19 aid

The Philippines' quest for an "A" credit rating will have to take a backseat while the government focuses on providing assistance for those hit by the coronavirus disease 2019 (COVID-19), the Bangko Sentral ng Pilipinas (BSP) said Thursday.

According to BSP Governor Benjamin Diokno, the priority for now will be to address the negative effects brought about by COVID-19 and the enhanced community quarantine (ECQ) imposed to curb the spread of the deadly illness.

"The economy, the macroeconomic fundamentals are sound, but unfortunately we -- like the rest of the world -- are suffering, so the road to 'A' might take a backseat at the moment," Diokno said in a virtual briefing.

The country's highest credit rating so far from a major ratings agency is a "BBB+" rating from S&P Global Ratings on the country's long-term sovereign credit rating.

This is one notch away from the "A-" rating, which would translate to lower borrowing costs for the Philippines as the country is seen to have a strong capacity to meet financial commitments.

To recall, Diokno in 2019 said the A rating could be achieved in the next two years, but on Thursday said this may no longer be the case.

"Achieving an A rating by 2022 may or may not happen, but as I said we are focused, the BSP and the National Government, will remain focused on pursuing appropriate policies and the necessary structural reforms to put the economy back on high growth trajectory and create more jobs to improve the lives of our people," Diokno said.

"Our concern really right now is to help our people rather than maybe pursuing our road to A, although we are still confident that we may achieve A rating by 2022," explained Diokno.

As of Wednesday, May 6, 2020, the Philippines has so far recorded a total of 10,004 confirmed cases of COVID-19. This includes 1,506 recoveries and 658 deaths.

The government has so far allocated P1.4-trillion for efforts against COVID-19, which the Department of Finance said would be fully available by the end of April. -NB, GMA News