Philippines keeps A-rating from Japan debt watcher

The Philippines retained its “A-” investment-grade rating with a stable outlook from the Japan Credit Rating Agency (JCR), with the debt watchdog expecting the country’s strong external buffers to help it maintain its resilience against headwinds.

In its latest rating action on Friday, JCR—whose credit opinion is closely watched by Japanese investors—projected Philippine economic growth to settle in the mid-3 percent range this year, driven by a recovery in public infrastructure investment and the effects of price stabilization policies.

The debt watcher, however, expects the government debt-to-Gross Domestic Product (GDP) ratio to remain in the mid-60 percent range for some time as the pace of fiscal improvement slows.

“The ratings mainly reflect the Philippines’ high and sustained economic growth supported by solid domestic demand, low-level external debt and resilience to external shocks supported by accumulated foreign exchange reserves,” JCR said.

“JCR believes that, as the government works to improve the investment environment and advance industrial upgrading, the economy will return to high growth rates over the medium term,” it added.

A stable outlook means JCR is unlikely to change its rating over the next one to two years.

The debt watchdog pointed to the Philippines’ strong external position in 2025, with the current account deficit improving to 3.3 percent of gross domestic product, external debt standing at 30.3 percent of GDP, and foreign exchange reserves totaling $110.8 billion.

“Despite increased uncertainty due to the deteriorating situation in the Middle East, the country’s foreign exchange liquidity position remains solid, and JCR expects the economy to retain high resilience to external shocks going forward,” JCR said.

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The Department of Finance said the affirmation reflected the country’s strong underlying credit fundamentals.

“JCR’s affirmation of the Philippines’ A- rating and Stable outlook reflects the resilience of our economy and the government’s commitment to fiscal consolidation and long-term reforms,” Finance Secretary Frederick Go said.

Meanwhile, the Bangko Sentral ng Pilipinas said the rating action underscored the need to sustain reforms and sound policies that support investment and productivity.

“The BSP will continue to promote price stability, safeguard financial stability, and ensure safe and efficient payments and settlements. These efforts support sustainable growth and broader economic opportunities for Filipinos,” BSP added.