Fitch Ratings has revised the Philippines’ credit outlook to negative from stable while affirming its long-term foreign-currency issuer default rating at BBB, citing rising risks to growth from stalled public investment and exposure to a global energy shock.
The agency said disruptions in government capital spending, following corruption investigations in flood control projects, and elevated oil prices linked to Middle East tensions are weighing on household consumption and investment.
Fitch now forecasts GDP growth at 4.6% in 2026, down from 5.7% in 2024, with risks tilted to the downside.
“The Outlook revision reflects rising risks to the Philippines’ strong medium-term growth prospects,” Fitch said, adding that inflation is expected to average 4.1% this year, up from 1.7% in 2025, as higher energy costs feed into food and transport prices.
Fitch noted the country’s current account deficit could widen to 3.8% of GDP in 2026 due to surging fuel import costs, eroding its external position.
Government debt is projected to ease slightly to 54.5% of GDP by end-2026, supported by nominal growth, though fiscal consolidation is expected to be gradual.
Despite political volatility and lingering risks from governance issues, Fitch said reform momentum remains intact and medium-term growth should stay robust enough to underpin the Philippines’ investment-grade status.
