Japan Rating Agency Upgrades Philippines to ‘A-‘ Credit Rating, Citing Economic Stability

TOKYO — Japan’s Rating and Investment Information, Inc. (R&I) upgraded the Philippines’ credit rating to A- with a stable outlook on Wednesday. This upgrade reflects the country’s continued economic growth, improvements in fiscal balance, and macroeconomic stability.

According to Philippines News Agency, the upgrade from BBB+ with a positive outlook to A- with a stable outlook marks the Philippines’ second A- rating, the first awarded by Japan Credit Rating Agency (JCR) in 2020. R&I highlighted the Philippines’ rapid economic growth, particularly noting the active investments from both the public and private sectors, advancements in domestic business sectors like business process outsourcing (BPO), and favorable demographics. The agency also commended the Philippine government’s fiscal consolidation efforts, which focus on supporting economic growth through increased budget allocations for education, social welfare, and infrastructure investments while expanding the tax base.

R&I further noted the government’s strategic initiatives under President Ferdinand R. Marcos Jr.’s administration, including an emphasis on infrastructure development through public-private partnerships (PPP), which aims to minimize the fiscal burden by engaging more private sector involvement in these projects. This approach, alongside regulatory measures designed to enhance private investments, underscores the government’s commitment to sustaining economic growth in the medium to long term.

Finance Secretary Ralph Recto responded to the upgrade by underscoring its significance as a robust indicator of investor confidence in the Philippine economy. He described this development as a milestone, marking the first credit rating upgrade under President Marcos Jr.’s leadership. Recto emphasized that the higher credit rating would lead to lower borrowing costs, thereby allowing the government to reallocate financial resources from debt service to development initiatives such as infrastructure, healthcare, education, and social services.

Recto also pointed out that the refined Medium-Term Fiscal Program is set to guide the Philippines toward maintaining this upgraded rating by realistically reducing the deficit and debt while fostering job creation, increasing incomes, further growing the economy, and reducing poverty.