The Philippines has retained its investment-grade status with a stable outlook from Fitch Ratings, reflecting confidence in the country’s economic prospects.
Maintaining investment-grade status offers significant advantages for the Philippines.
The government can borrow at lower interest rates, saving public funds.
Philippines’ BBB rating, unchanged since December 2017, indicates a low likelihood of default and a well-managed economy.
The “stable” outlook, on the other hand, suggests that Fitch expects the rating to remain unchanged for the next 1-2 years, providing stability for the Philippine government.
Fitch projects robust economic growth of 5.8% in 2024, driven by infrastructure spending and trade reforms.
This momentum is expected to continue, with growth exceeding 6% in the medium term. Early data shows promise, with the first quarter of 2024 recording a healthy 5.7% expansion.
Inflation, which peaked at 6.1% in May 2023, has eased to 3.9% in May 2024.
Fitch anticipates inflation will stay within the government’s target range, averaging 3.8% in 2024 and further dropping to 3.4% in 2025.
The Philippines is managing its debt well, with Fitch expecting general government debt to hover around 54% of GDP by 2025. The current account deficit is also forecast to narrow, falling below 2% of GDP by 2025.
Maintaining investment-grade status offers significant advantages for the Philippines. The government can borrow at lower interest rates, saving public funds.
Additionally, this positive rating from Fitch strengthens investor confidence in the Philippine economy, potentially attracting more investments.
