Philippines keeps Fitch BBB rating, outlook cut

The Bangko Sentral ng Pilipinas noted Fitch Ratings’ decision to affirm the Philippines’ “BBB” investment-grade credit rating while revising its outlook to negative from stable, a move announced on April 20, 2026. 

Fitch’s outlook revision reflects a shift in the balance of risks surrounding the rating as the Philippines contends with global energy shocks and their possible impact on growth, inflation and external accounts. 

Despite the rising risks, Fitch said it expects medium-term growth to remain strong, with Philippine gross domestic product projected to expand by 4.6 percent in 2026 as public investment gradually recovers, even as higher energy costs weigh on household consumption. 

BSP Governor Eli M. Remolona, Jr. said, “The economy remains in a good position because growth is strong and banks are in good shape. The BSP is closely monitoring the impact of higher oil prices and geopolitical developments, particularly the conflict in the Middle East, on inflation and the overall Philippine economy.”

He added that while recent oil price pressures are driven by global supply shocks, the BSP remains vigilant against spillover effects and the risk of de anchoring inflation expectations.

He said the central bank stands ready to act in a measured, timely, and data driven manner.

Fitch also recognized the government’s proactive response to the energy crisis, including the declaration of a National Energy Emergency in March, and cited the Philippines’ track record of policy continuity and economic reforms as factors that could help cushion medium-term risks. 

The rating agency said the country’s foreign exchange reserves remain adequate to manage current external pressures. 

As of end-March 2026, the Philippines’ gross international reserves stood at USD 106.6 billion, equivalent to 7.0 months of imports and about 3.9 times short-term external debt based on residual maturity. 

An investment-grade rating such as “BBB” signals relatively low credit risk and continued access to affordable financing, which helps support government spending on priority programs, although a negative outlook means risks have increased and could lead to a downgrade if conditions worsen. 

Fitch’s latest action did not change the Philippines’ rating itself, and under the agency’s framework, a negative outlook does not mean a downgrade is inevitable. 

One point to fix from the source text: it says “de anchoring inflation expectations,” but the standard phrasing is “de-anchoring inflation expectations.”