JCR affirms PH’s high ‘A-’ credit rating on the back of steady progress of PBBM’s economic agenda

The Japan Credit Rating Agency, Ltd. (JCR) has recently affirmed its high ‘A-’ credit rating and stable outlook on the Philippines, recognizing the steady progress of President Ferdinand R. Marcos, Jr.’s economic agenda.

“The Marcos Jr. administration, which took office in June 2022, is implementing various policies aimed at achieving fiscal consolidation, infrastructure development, and poverty alleviation, and has been making steady progress to date,” JCR said in its report.

“Napaka-gandang balita nito. Ibig sabihin, nananatiling malakas ang kumpyansa ng mga credit rating agencies at mga investors sa ating bansa. We remain committed to securing more ‘A’ ratings by staying faithful to our fiscal consolidation plan and Road-to-A strategy,” Finance Secretary Ralph G. Recto said.

“We have already passed key game-changing reforms, such as the CREATE MORE Act and the Capital Markets Efficiency Promotion Act, and will continue to work on creating an investment-enabling environment to increase the country’s economic growth potential,” he added.

An ‘A-’ rating is a strong investment-grade score that reflects robust creditworthiness and macroeconomic stability. It signals confidence to investors and creditors, resulting in lower interest rates on borrowings of the national government and the private sector.

This allows the government to channel funds that would have otherwise been allotted for interest payments towards more development programs, such as more infrastructure projects, improved social services, a better health care system, and quality education. It also helps attract more foreign direct investments into the country, which will create better employment opportunities for Filipinos.

The JCR’s latest affirmation keeps the Philippines well-positioned to maintain high investment-grade ratings from all major global and regional credit agencies.

According to the Japanese debt-watcher, its latest rating affirmation reflects the Philippines’ high and sustained economic growth supported by solid domestic demand, low-level external debt, and resilience to external shocks.

This year, JCR projects the country’s real GDP growth rate to remain in the upper 5% range due to robust domestic demand despite global uncertainties such as shifts in U.S. tariff policy.

The rating agency likewise recognized the Philippines’ progress in fiscal consolidation, highlighting the continued narrowing of the fiscal deficit ratios and a government debt-to-GDP ratio of approximately 60% by end-2024—one of the lowest among sovereigns rated in the A-range by JCR.

JCR further lauded the passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which enhances the ease of doing business, clarifies the scope of value-added tax (VAT), rationalizes the VAT and excise tax refund system, and streamlines income tax incentives.

These measures, according to the agency, have strengthened the tax regime and improved the overall investment climate in the country.

It likewise recognized the government’s progress on implementing the Build Better More program and move to leverage private sector investments in infrastructure through public-private partnerships (PPP).

More importantly, JCR noted that the poverty rate is declining at a faster-than-expected pace—a clear indication that economic growth is reaching more Filipino families.

Secretary Recto, together with the rest of the economic team, regularly engages with JCR and all major credit rating agencies to provide comprehensive briefings on the country’s fiscal and economic performance.