Despite Fitch Ratings’ negative view on the Philippines’ investment-grade credit rating, economic managers remain confident about the country’s debt metrics.

“On the fiscal front, while we have significantly augmented the expenditure program to fund massive Covid (coronavirus disease 2019) relief measures, government spending has remained within the boundaries of fiscal discipline and sustainability,” Finance Secretary Carlos Dominguez 3rd said in a statement released Monday night by the Bangko Sentral ng Pilipinas’ Investor Relations Office.

He went on to remark that the national government debt, as a percentage of GDP, is likely to fall in a still-manageable 58.7 percent this year.

“We expect to head back to the road of fiscal consolidation once the virus is contained and public spending normalizes to pre-Covid levels,” Dominguez further said.

Due to increased Covid relief spending and low GDP growth, the country’s general government (GG) deficit rose to 5.4 percent of GDP in 2020, up from 1.7 percent in 2019, according to Fitch’s most recent rating action comments.

The credit rating agency expects the GG deficit-to-GDP ratio to rise to 8.8 percent in 2021, thanks in part to funds carried over from 2020, before moderately declining to 6.4 percent in 2022 and 5.6 percent in 2023.

The general government debt-to-GDP ratio is expected to rise to 52.7 percent in 2021 and 54.5 percent in 2022, respectively, lower than the “BBB” countries’ medians of 57.0 percent and 58.7 percent.

Fitch added that the Philippines’ external finances are still a credit strength. The government has large foreign-currency reserves, and its total external debt is manageable.

Foreign exchange reserves increased to $110 billion by the end of 2020, up from $90 billion in 2019, thanks to proceeds from multilateral borrowing and bond issuances for pandemic-related spending.

Meanwhile, BSP Governor Benjamin Diokno said that the central bank will continue to assist the economy as needed, citing the negative consequences of premature withdrawal from response measures.

“Moreover, our financial digitalization agenda should help move the Philippines to new heights. Faster payments processes and accessibility of financial products and services through digital means will help push economic growth and financial inclusion moving forward,” he emphasized.