đź“·NEDA Secretary Arsenio Balisacan
National Economic and Development Authority (NEDA) officials said on Friday, November 29, that the Philippines is reducing its reliance on concessional loans as it eyes transitioning to upper-middle-income status next year.
NEDA officials said this in a press briefing after S&P Global Ratings raised its outlook to “positive” from “stable” to reflect the economy’s strong growth potential amid improved institutional strength on the back of “effective policy making.”
In a press briefing, NEDA Secretary Arsenio Balisacan said the country will still have access to attractive financing terms through alternative mechanisms offered by development partners.
“What we are told by some is that once you graduate from a lower-middle-income country, you lose your ODA [Official Development Assistance] privileges. But we are assured by our development partners that, at least in the medium term, we will continue to have access to similarly attractive loans,” Balisacan said.
“We want to take advantage of the situation where we are still classified as a lower middle-income country,” Balisacan added, emphasizing ongoing collaboration with international partners to explore alternative funding mechanisms.
NEDA Undersecretary Joseph Capuno, for his part, said that the government is actively preparing for the eventuality of limited concessional loan access.
According to Capuno, the economic team has crafted a roadmap to improve our creditworthiness. He also noted that a recent credit rating upgrade by S&P Global reflects the country’s progress.
“Our goal is to achieve an A-level credit rating, which will lower the cost of capital for the Philippines,” Capuno said.
To maximize this window, the Philippines has been ramping up approvals for infrastructure projects funded by ODAs.
“We want to take advantage of the situation where we are still classified as a lower middle-income country,” Balisacan added, emphasizing ongoing collaboration with international partners to explore alternative funding mechanisms.
NEDA Undersecretary Rosemarie Edillon also said that sustained growth and improved governance will further enhance the nation’s borrowing profile.
The government is determined to make the most of a grace period extending to 2027 for concessional loans, ensuring key projects are approved and implemented within this timeframe.
“This transition is not just about access to funding,” Balisacan said. “It’s about demonstrating the country’s capacity to sustain growth and become a reliable partner on the global stage.”(TCSP)
