PH stays on course for coveted ‘A’ rating
The Philippines remains in contention to secure the coveted “A” credit rating, even as the economic fallout from the sweeping flood control corruption scandal weighs on growth, according to S&P Global Ratings.
In its latest review, S&P affirmed the country’s long-term credit rating at triple B plus (BBB+) with a positive outlook, signaling confidence from the major credit watcher that the slowdown in economic growth is temporary.
A positive outlook means the country’s credit rating could be upgraded within two years.
Public infrastructure spending has stalled due to investigations into flood control projects, which could slow full-year GDP growth to an estimated 4.8 percent. However, S&P expects a recovery over the next one to two years.
The credit watcher cited ongoing fiscal consolidation, stabilized debt levels and a robust external position as factors underpinning the Philippines’ potential “A” credit rating.
GDP growth is projected to rebound, averaging around 6.2 percent from 2026 to 2028, as delayed infrastructure projects resume, private consumption remains strong and foreign investment flows in under improved policies.
“Policy settings in the Philippines have helped to keep economic performance strong, and have sustained fiscal spending on public investment. A strong economic recovery over the past three years, and ongoing reforms to support business and investing conditions reflect these strengths,” S&P said.
“We believe this [corruption scandal] will not derail the country’s long-term growth trajectory, which remains healthy,” it added.
DOF, BSP welcome development
S&P’s rating scale ranges from D, the lowest, to AAA, the highest. Should the debt watcher decide to upgrade the Philippines’ creditworthiness, the next level for the country would be A-.
In separate statements, the Department of Finance (DOF) and Bangko Sentral ng Pilipinas (BSP) welcomed S&P’s affirmation, saying the positive outlook is proof of the country’s solid economic foundation.
“We welcome this development. We will ensure that every policy decision will support sustainable growth and long-term stability,” newly appointed Finance chief Frederick Go said.
“Having a high credit rating will benefit Filipinos because this means cheaper financing for the government, and in effect, more resources for essential public services. This supports our goal of uplifting the life of every Filipino,” he added.
Meanwhile, BSP said the country is well-positioned against external risks and remains one of Asia’s fastest growing economies.
“S&P’s rating decision confirms our view of the favorable long-term economic growth prospects,” BSP Governor Eli Remolona Jr. said.
