BBM COURTESY CALL— President-Elect Ferdinand ‘Bongbong’ Marcos Jr. welcomes Japanese Ambassador Koshikawa Kazuhiko as he pays a courtesy visit at the BBM Headquarters, Boni EDSA on Monday morning (May 23,2022). During the visit, Marcos told Kazuhiko that he intends to further strengthen ties and expand areas of cooperation between their two countries once he formally assumes office on June 30 this year. Photo BBM Media Office

BBM clear mandate hailed

May 23, 2022 People's Tonight 319 views

WITH more than 31 million votes and considered as the first majority president, the Fitch Ratings announced that the clear mandate of incoming President Ferdinand ‘Bongbong’ Marcos Jr., will help him implement his policy agenda with ease.

Also, the Fitch Ratings foresees the government maintaining a focus on infrastructure investment, which is a key element of the country’s favorable medium-term growth prospects that support the sovereign’s ‘BBB’ rating.

“We believe the clear mandate delivered by the 9 May PH election bodes well for the ability of the incoming administration headed by Ferdinand Marcos Jr., as president to implement its agenda, which we expect to be broadly in line with existing policies,” the Fitch Ratings said in its official website.

The multinational credit rating agency is also optimistic that the Philippines would continue with its sound policy framework, and return to strong medium-term growth following COVID-19 pandemic.

“But the negative outlook on the Philippines’ rating, which we affirmed in February 2022, reflects the uncertainty around this outcome,” it clarified.

The Fitch Ratings also noted the experience of Marcos as a legislator would help his agenda in the next Congress.

“We will be able to better assess the impact of the Marcos government’s policy agenda once key appointments are finalized, notably within the economic team. The incoming president’s capacity to implement legislation will also hinge on dynamics within the new Congress,” it added.

The company also disclosed that the “risks to growth posed by pandemic-related scarring could be offset by investment that addresses infrastructure shortfalls, supporting the country’s growth potential.”

On the other hand, the Fitch Ratings also said that if Marcos’ administration amends the Rice Tariffication Law, as it suggested during its campaign, “this could curb rice imports and push up the cost of rice.”

“Amending the law could also hurt tax revenue. The low tax take is a credit weakness for the Philippines, and when we affirmed the rating in February, we noted that a reversal of tax reforms that leads to sustained higher fiscal deficits could result in a rating downgrade,” it averred.

Results of the congressional elections have yet to be confirmed, but the Fitch Ratings said they anticipate that Congress will not pose a significant obstacle to the eventual passage of the president’s legislative agenda.

“We expect external buffers to remain a credit strength for the Philippines, despite a modest weakening of the peso and rising pressure on the goods trade balance in recent months amid higher global energy prices,” the ratings firm explained.

“A gradual reopening of the economy to tourists in the wake of the pandemic should support the country’s external position this year and official reserve assets stood at a comfortable USD107 billion at end-April 2022, only slightly down from USD109 billion at end-2021,” it stressed.