Philippines' 'positive' credit rating overshadows poverty, debt — think tank

MANILA, Philippines — Although the Philippines received a “positive” credit rating outlook, an economic think tank cautioned against using it to “overstate” the country’s economic performance. 

The think tank noted how other indicators show more Filipino families struggling to save and falling into poverty.  

“Credit ratings should not be overstated as any kind of measure of economic performance or much less of national development,” IBON Foundation Executive Director Sonny Africa told Philstar.com.

American credit rating agency S&P Global Ratings announced on Tuesday, November 26, that the country’s credit rating outlook was raised from “stable” to “positive.” A credit rating refers to the country’s creditworthiness or ability to repay debt. 

In a joint statement, state economic managers attributed the “above-average growth potential” to policies and fiscal reforms such as the recently signed CREATE MORE Act that decreases corporate income tax for businesses as it seeks more investments. 

Africa said on Wednesday, November 27, that the government is exaggerating or overhyping the country’s economic growth, which Finance Secretary Ralph Recto has described as “booming” or having “all the makings of a tiger economy.”

“They seize on any fragment of seeming economic good news – like a ‘positive’ outlook — to bolster this narrative,” he added. 

While he acknowledged the increase in government revenue due to the digital service tax, he also pointed out that CREATE MORE reduces the country’s revenue by lowering taxes paid by businesses.

Africa explained that this “positive” credit rating outlook actually overshadows the economic distress the Philippines has been experiencing. 

“We should not make so much of the ‘positive’ outlook especially because so many key indicators show an economy in distress,” he said.

Citing Social Weather Stations (SWS) self-rated poverty survey in October 2024, Africa stressed how more than half of Filipino families consider themselves poor. The figure has worsened since President Ferdinand Marcos Jr.’s administration assumed office in 2022.   

In the third quarter of 2022, SWS reported that 49% or 12.2 million Filipino families believed