Metro Manila’s financial district at sunset. The skyline of Bonifacio Global City and Makati, home to major banks and corporate headquarters, remains a visual marker of the Philippines’ economic strength as S&P Global Ratings keeps the country on a positive outlook toward a potential upgrade to the A scale.(Photo by Wikimedia Commons / View from Grand Hyatt Manila)
MANILA – The Philippines remains within reach of its long-standing goal of securing an “A” sovereign credit rating after S&P Global Ratings affirmed the country’s BBB+ grade and maintained a positive outlook. The decision signals the possibility of an upgrade within the next two years if fiscal and economic indicators continue to improve.
The move keeps the Philippines one notch below the coveted A scale and highlights S&P’s view that the country’s long-term fundamentals remain sound despite slower growth and the ongoing investigation into alleged irregularities in flood-control projects. S&P said the positive outlook reflects expectations that the government can narrow its budget deficit, strengthen external accounts, and maintain per-capita income growth compared with similarly rated economies.
S&P noted that the corruption probe has delayed segments of the public infrastructure program and has weighed on near-term economic activity. The agency reduced its 2025 growth forecast to about 4.8 percent, which is lower than the government’s target. It expects a recovery toward the mid 5 to 6 percent range between 2026 and 2028. Government data showed that the economy expanded 4 percent in the third quarter of 2025, the slowest pace in more than four years. This pulled year-to-date growth to about 5 percent.
Despite the slowdown, S&P said it continues to view the Philippines as a diversified, domestically driven economy supported by steady remittances, a young labor force, and a manageable public debt profile. The Bangko Sentral ng Pilipinas has cited easing inflation and foreign exchange reserves of more than 110 billion dollars as important stabilizing factors.
Finance Secretary Frederick Go welcomed the affirmation and described it as a vote of confidence in the administration’s fiscal consolidation plan. The strategy aims to gradually reduce the budget deficit and lower the debt-to-GDP ratio in the medium term. Go said a stronger credit profile allows the government to access financing at lower cost and create more fiscal space for infrastructure and social services.
Two Japanese rating agencies, Japan Credit Rating Agency and Rating and Investment Information Inc., already assign the Philippines an A minus rating. These are currently the highest sovereign ratings the country holds. Major Western agencies, including Moody’s and Fitch, continue to place the Philippines one to two notches below the A category.
S&P said the outlook could turn negative if governance concerns escalate or if fiscal consolidation weakens. For now, the latest review keeps the Philippines on track and still moving toward the long-sought A rating.
