Fitch Ratings Affirms Philippines’ “BBB” Credit Rating with Stable Outlook
Credit rating agency Fitch Ratings has affirmed the Philippines’ “BBB” credit rating and maintained a “stable” outlook, citing the country’s declining debt and resilient economy as the basis for their decision.
The Philippines has held a BBB sovereign credit rating since December 2017, and Fitch upgraded its outlook from “negative” to “stable” last May, reflecting confidence in the country’s economic trajectory.
Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. noted that Fitch’s recognition of the central bank’s efforts to manage inflation was a contributing factor in their decision. He emphasized that the BSP will continue to monitor data to ensure inflation remains within the target range.
Fitch’s decision was also supported by the Philippines’ strong medium-term growth prospects, declining debt, macroeconomic stability, and sound economic policies. The agency expressed confidence in the BSP’s inflation targeting framework and exchange rate regime.
The BSP has taken measures to contain inflation, including raising the policy rate by 450 basis points to 6.5 percent. While inflation remains above the government’s target range at 6.4 percent, both Fitch and the BSP expect it to moderate to 3.5 percent by 2025.
Looking ahead, Fitch anticipates the Philippines’ real GDP to grow above six percent over the medium term, backed by infrastructure investments and trade and investment reforms. The country’s GDP grew by 5.9 percent in the third quarter of this year, demonstrating a strong recovery in government spending.
Furthermore, Fitch projects the country’s general government debt to decline to 54 percent of GDP in 2025, after peaking slightly above this level from 2023 to 2024.
The affirmation of a “BBB” credit rating and a “stable” outlook positions the Philippines favorably to access funding at lower costs from international markets. It also reflects positively on the country’s ability to meet financial commitments and signals confidence from Fitch in the Philippines’ economic stability in the coming years.