PH keeps A- credit rating on strong growth, investments

The Philippines has retained its high investment-grade ‘A-’ credit rating with a stable outlook from Japan-based Rating and Investment Information, Inc. (R&I), bolstered by strong economic growth, rising investments, and continued fiscal discipline.

This reaffirmation maintains the country’s highest-ever rating from R&I, which had upgraded the Philippines to ‘A-’ in August 2024 — the first under the Marcos Jr. administration.

“Isa itong tagumpay na dapat ipagdiwang ng bawat Pilipino,” said Finance Secretary Ralph G. Recto.

“Dahil ibig sabihin nito, nananatiling mataas ang tiwala ng mga credit rating agencies at investors sa atin. Kaya mas dadami ang papasok na investments, mas maraming magandang trabaho ang malilikha, mas tataas ang kita, at mas maraming Pilipino ang maiaahon natin sa kahirapan,” he added.

An ‘A-’ rating reflects the Philippines’ solid macroeconomic stability and creditworthiness, enabling both the government and private sector to borrow at lower interest rates and attract more foreign direct investments.

It also allows the government to allocate more funding for infrastructure, healthcare, social services, and education by reducing interest payments.

R&I cited that the Philippine economy continues to outpace its regional peers, with a second-quarter GDP growth of 5.5% in 2025 — higher than China (5.2%), Indonesia (5.1%), Malaysia (4.5%), Singapore (4.3%), and Thailand (2.8%).

This growth was driven largely by domestic demand, supported by a sharp decline in inflation to 0.9% in July 2025.

Public and private investments are also expected to rise, particularly in the information technology and business process management (IT-BPM) sector and the electronics manufacturing base, especially semiconductors.

“The Philippines is expected to realize stable economic growth as well as higher income level against the backdrop of robust public and private investments, development of domestic business such as Information Technology and Business Process Management industry, and population growth, among other factors,” R&I said.

Key government initiatives supporting this outlook include the recently enacted Public-Private Partnership (PPP) Code and the proposed CREATE MORE Act, which provide streamlined regulations and tax incentives to stimulate private sector engagement.

R&I also played down potential external risks, including the impact of reciprocal tariffs from the U.S., noting the limited effect due to a relatively low 19% tariff rate and the small share of Philippine exports to the U.S. in the broader economy.

On the fiscal front, R&I recognized the government’s progress in reducing the fiscal deficit and managing public debt levels, crediting a commitment to fiscal consolidation.

“R&I believes that the government debt ratio will remain within manageable level with the progress in reducing fiscal deficits,” the agency stated.

The country’s fiscal deficit has declined from 8.6% of GDP in 2021 to 5.5% in 2025, and is projected to reach 4.3% by 2028 and further down to 3% by 2030.

Secretary Recto said the government will continue to rely primarily on domestic borrowings with longer maturities and fixed rates to minimize exposure to foreign exchange risks and maintain debt sustainability.

The Marcos Jr. administration’s Medium-Term Fiscal Program targets a PHP42.6 trillion economy by 2030 while keeping debt within a manageable PHP24.7 trillion, equivalent to roughly 58% of GDP.