Fitch affirms PHL BBB rating but revises outlook to stable

Fitch Ratings affirmed the Philippines' BBB rating but revised the outlook from Positive to Stable due to the economic impact of the COVID-19 pandemic.

The global credit rater now forecasts a 1% contraction for the Philippine economy in 2020, a significant shift from the 6% growth in 2019.

Fitch cited the pandemic and domestic lockdown measures as key factors for the deteriorating near-term macroeconomic and fiscal outlook.

The debt rater expects the government's budget deficit to widen to about 6.5% of GDP this year, higher than the government's projection of 5.3%.

Government debt is expected to rise to around 46% of GDP by next year before declining to 41.7% by 2023.

Despite the challenges, Bangko Sentral ng Pilipinas Governor Benjamin Diokno stated that structural reforms and sound economic management provide the necessary fiscal and monetary space to navigate the crisis.

Finance Secretary Carlos Dominguez III affirmed the country's strong fiscal position to address the pandemic's economic challenges.