Fitch Reaffirms PH Credit Rating, Cites Inflation Control

Fitch Ratings has reaffirmed the Philippines’ long-term credit rating at “BBB” with a stable outlook, recognizing the country’s success in containing inflation and sustaining macroeconomic stability.

The move reinforces investor confidence in the Philippines’ creditworthiness, underscoring its resilience amid global economic challenges.

Fitch credited the Bangko Sentral ng Pilipinas’ (BSP) inflation targeting framework as “credible,” with inflation projected to remain at about 2 percent in 2025 and 2026.

The agency noted that this outlook is at the low end of the Philippine government’s 2 to 4 percent inflation target range.

According to the Philippine Statistics Authority, headline inflation slowed to 1.8 percent year-on-year in March 2025 from 2.1 percent in February, bringing the year-to-date average to 2.2 percent.

BSP Governor Eli M. Remolona, Jr. welcomed Fitch’s decision, citing the central bank’s proactive stance in maintaining price stability.

“The BSP took actions to help keep inflation manageable and promote sustainable economic growth,” Remolona said. “The BSP will continue to do so.”

Fitch also cited the Philippines’ “solid domestically driven growth,” with GDP expanding by 5.3 percent in the fourth quarter of 2024 and 5.7 percent for the full year.

The agency forecasts 2025 GDP growth at 5.6 percent, supported by continued infrastructure development, rising services exports, and strong private consumption fueled by overseas Filipino remittances.

Medium-term growth is expected to stabilize around 6.0 percent, reflecting the country’s structural strengths and robust domestic demand.

Fitch emphasized that the Philippine economy’s limited exposure to volatile global trade dynamics is a key advantage, especially amid shifting geopolitical tensions.

The United States’ recent move to impose relatively low tariffs on Philippine exports may further bolster the country’s competitiveness against regional peers, Fitch added.

In a broader context, other international rating agencies have also responded positively to the Philippines’ improving economic metrics.

S&P Global Ratings revised its outlook on the Philippines to “positive” in November 2024, signaling the possibility of an upgrade.

Meanwhile, Japan-based Rating and Investment Information, Inc. (R&I) upgraded the country to “A-” with a stable outlook in August 2024.

An investment-grade credit rating like Fitch’s “BBB” signals low credit risk and helps reduce borrowing costs for the government.

It enables access to cheaper capital, allowing greater investment in infrastructure, education, and healthcare programs that support inclusive development.