S&P affirms PH investment-grade rating, outlook positive

The Bangko Sentral ng Pilipinas (BSP) welcomed S&P Global Ratings’ affirmation of the Philippines’ investment-grade status, with the agency maintaining the country’s long-term BBB+ and short-term A-2 sovereign ratings and keeping a positive outlook.

S&P’s decision reflects sustained confidence in the country’s economic fundamentals, noting above-average growth potential, a strong external position, continued policy stability, and reforms that support a more competitive investment climate.

“S&P’s rating decision confirms our view of the favorable long-term economic growth prospects,” BSP Governor Eli M. Remolona Jr. said following the announcement.

The agency also cited the central bank’s independence and its consistent performance in maintaining low and stable inflation as key strengths.

Despite Philippine economic growth slowing to 4.0% in the third quarter of 2025 from 5.5% in the previous quarter, S&P assessed the deceleration as temporary.

The credit rating agency projects gross domestic product (GDP) growth at 4.8% for full-year 2025, before rising to 5.7% in 2026 and 6.5% in both 2027 and 2028.

S&P expects the Philippines’ long-term growth prospects to remain strong and outperform those of similarly rated peers, citing ongoing reforms that aim to attract more foreign direct investment.

As of the third quarter of 2025, the Philippines was among Asia’s fastest-growing economies, posting an average growth of 5.0% from January to September.

This placed the country behind Vietnam at 7.9%, tied with Indonesia at 5.0%, and ahead of Malaysia at 4.7%, Singapore at 4.3%, and Thailand at 2.4%.

Remolona emphasized the Philippines’ resilience to external shocks, pointing to USD 110.2 billion in gross international reserves as of end-October 2025.

The amount is equivalent to 7.4 months of imports—more than double the International Monetary Fund’s adequacy benchmark.

An investment-grade rating allows the government to borrow at lower interest rates, enabling increased funding for infrastructure and essential public services.

It also improves access to affordable credit for private firms, supporting expansion efforts and job creation.

S&P’s positive outlook signals the possibility of a credit rating upgrade within the next 24 months, which would further reduce borrowing costs and strengthen investor confidence in the Philippine economy.