Fitch Ratings Revises Philippines' Outlook to Negative Due to Pandemic Impact, Maintains BBB Credit Rating

Fitch Ratings has revised its outlook on the Philippines from stable to negative due to the economic impact of the coronavirus pandemic, but maintained the country's BBB credit rating.

The warning comes as President Rodrigo Duterte maintains a conservative approach to pandemic spending despite calls for increased aid and measures.

According to Fitch Ratings Director Sagarika Chandra, the revised outlook is due to 'eroding' buffers and uncertainty surrounding the pandemic including new variants.

However, there remains potential for an upgrade in the future if public finances stabilize with a stable debt ratio and increase in revenue base.

Finance Secretary Carlos Dominguez III has stated that while the impact of the pandemic on the economy is significant, it will be temporary. The government expects double-digit growth in Q2 2021 amid fast-track vaccine rollout and economic recovery measures.

Socioeconomic Planning Secretary Karl Chua said the affirmation of the country's credit rating 'is a vote of confidence in the country’s economic and fiscal management despite the worst effects of the pandemic.'.

The Philippine government aims for a 6-7% growth target this year and a 7-9% target next year.