The Philippines retained its investment-grade A- credit rating after Japan Credit Rating Agency Ltd. (JCR) affirmed its rating with a stable outlook, citing resilient domestic demand, low external debt and ample foreign exchange reserves.
JCR affirmed the A- rating on the Philippines’ long-term foreign- and local-currency debt, as well as six yen-denominated bonds totaling 133.6 billion yen ($900 million) maturing between 2027 and 2042.
The decision follows a similar affirmation by Tokyo-based Rating and Investment Information Inc. (R&I), which also kept the Philippines at A- with a stable outlook.
JCR said the Philippine economy was slowing as public works implementation weakened and higher crude oil prices weighed on consumption.
Gross domestic product grew 2.6% in the first half of the year, below the government’s revised full-year growth target of 3.5% to 4.5%.
“As a consequence, the pace of fiscal improvement is slowing, and the government debt-to-GDP ratio is expected to stay around the mid-60 percent range for a while,” JCR said.
The agency said reducing income inequality through rural and infrastructure development remained a key challenge, but expects growth to recover over the medium term as the government improves the investment climate and advances industrial upgrading.
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said the affirmation reflected continued confidence in the country’s economic fundamentals despite external risks.
“The rating action comes at a time of heightened uncertainty, including the Middle East conflict,”
Remolona said, adding that maintaining sound policies and reforms would be important to support investment and productivity.
Finance Secretary Frederick Go said the rating reaffirmed confidence in the economy’s resilience and the government’s commitment to fiscal consolidation and long-term reforms.
“It reinforces investor confidence and supports our efforts to attract investments, create quality jobs, and sustain inclusive growth,” Go said.
