Finance Secretary Ralph G. Recto has welcomed Fitch Ratings’ recent affirmation of the Philippines’ ‘BBB’ credit rating with ‘Stable’ outlook, which reflects the country’s strong medium-term growth amidst rising external challenges, such as geopolitical and trade tensions.
“Fitch’s reaffirmation of our credit rating is a powerful vote of confidence in the Philippines as a bright spot in a world clouded by global uncertainties. It underscores the strength of our economic fundamentals, the credibility of our ongoing reforms, and our resilience in navigating global headwinds—all while maintaining robust growth,” the Finance Chief said.
“We remain committed to sustaining this trajectory through sound fiscal management and an open, investment-friendly environment that invites and welcomes partners from around the globe,” he added.
A ‘BBB’ rating, which is above the minimum investment grade, indicates the Philippines’ strong creditworthiness. It sends a signal of confidence to investors and creditors, resulting in lower interest rates and better returns for Philippine bonds.
Fitch’s recent affirmation of the Philippines’ credit rating places the country in a good position to maintain its investment-grade status across all major regional and international debt rating agencies.
In reaffirming its rating, Fitch cited the Philippines’ solid, domestically driven growth as a key buffer against external challenges.
Fitch expects the Philippines to be relatively shielded from reciprocal tariffs imposed by the US, with its lower tariff rate of 17% seen as an advantage over regional peers. The country is also poised to benefit from lower global commodity prices and potential redirection of exports.
For 2025, Fitch projects the Philippine economy to grow by 5.6%, driven by strong infrastructure spending, robust services exports, and resilient private consumption supported by steady remittance inflows.
The credit rating agency also recognized the government’s success in taming inflation, along with the easing of policy rates, which will support continued private sector demand.
Over the medium term, growth is expected to exceed 6%, more than double the projected ‘BBB’ median, as the Philippine economy reaps the benefits of structural reforms and strategic investments, including the recently passed Public-Private Partnership (PPP) Code.
Fitch likewise acknowledged the government’s steady progress in fiscal consolidation, with general government (GG) budget deficit narrowing and the GG debt-to-GDP ratio on a downward path.
In particular, Fitch sees the GG budget deficit declining to 3.6% of GDP by 2026, citing improvements in spending efficiency and tax administration.
“We note that overall budget balances have been close to the targets in recent history,” the rating agency said.
On the other hand, GG debt is expected to remain broadly stable at 54%-55% of GDP over 2025 to 2026, in line with the ‘BBB’ median.
“Strong nominal GDP growth and narrowing fiscal deficits contribute to our forecast of a downward path for government debt/GDP over the medium term,” Fitch said.
However, Fitch cautioned that risks to growth remain, particularly from domestic political uncertainty and global trade tensions that will likely drag on growth through weaker global demand. Technological change likewise poses risks to the Philippines’ large outsourcing sector, but noted that the country is well adapting.
“Rest assured, we are ready to respond to these risks with agility and resolve—through forward-looking reforms such as the CREATE MORE Act and strategic investments in innovation and human capital,” Secretary Recto said.
