Rating and Investment Information Inc. (R&I), a Japan-based credit rating agency, on Wednesday affirmed the Philippines’ credit rating at “A-,” with a stable outlook.
The “A-” rating is the highest credit score the Philippines has received from an international rating agency. It also holds a similar “A-” rating from the Japan Credit Rating Agency Ltd.
An “A-” rating is considered investment-grade, indicating lower credit risk. This allows a country to access funding from development partners and international debt capital markets at a lower cost. R&I also affirmed the Philippines’ foreign currency short-term debt rating at “a-1”.
R&I said in a statement the Philippines is expected to have stable economic growth and a higher income level due to robust public and private investments, the development of domestic industries like IT-BPM and population growth.
The agency noted that the fiscal balance as a share of gross domestic product (GDP) has improved and the government debt ratio will likely start falling in the next one to two years. R&I said the current account deficit and external debts are manageable, with limited concern on the external front. The country’s banking sector also remains stable.
The Philippine economy continues to grow at a relatively high rate compared to its Southeast Asian neighbors. R&I noted that in addition to the service industry, the expansion of manufacturing bases, particularly in electronics, can be expected.
Real GDP growth was 5.7 percent in 2024, an increase from the previous year, driven by higher government infrastructure spending, related private investments and strong private consumption. For 2025, R&I projects that public and private investments will continue to increase as private consumption remains strong.
The agency also highlighted that inflation fell to a six-year low of 0.9 percent in July 2025, bringing the 2025 average to 1.7 percent due to the continued easing of rice prices. The government has a target real GDP growth of 5.5 percent to 6.5 percent for 2025.
R&I believes that the impact of reciprocal tariffs imposed by the US is limited because the tariff rate is low at 19 percent and exports to the US represent a small proportion of the overall economy.
The country’s current account has mostly been in a deficit, but the stability of surplus items, such as remittances from overseas Filipino workers, has been maintained.
The trade deficit is largely due to increased imports of construction materials for infrastructure investments. R&I said the current level of deficit does not necessarily have a negative impact on creditworthiness, as it can be a basis for future economic growth.
The Philippines also has sufficient foreign exchange reserves to cover imports. While its debts exceed financial assets in terms of international investment position, the net debt is at a low level compared to GDP, minimizing external risk.
The government has been pushing for fiscal consolidation while balancing economic growth. The projected fiscal deficit for the national government in the 2025 budget is 5.5 percent of GDP. Measures such as introducing a Value-Added Tax (VAT) on digital services from foreign e-commerce operators are being pursued to increase tax revenue. The government is also allocating budgets to education, social security, and infrastructure.
R&I expects the fiscal deficit to continue to decrease in line with the government’s plan. The national government’s outstanding debt for 2024 was 60.7 percent of GDP, and the agency believes the debt ratio will remain manageable as fiscal deficits are reduced. The government primarily meets its funding needs through the issuance of domestic government bonds.
The country has a certain level of debt affordability due to its manageable interest payment burden. Under the Philippine Development Plan 2023-2028, the administration led by President Ferdinand Marcos Jr. is focused on securing economic stability, accelerating infrastructure development, and expanding investments to create jobs, reduce poverty, and improve household incomes.
The government is also encouraging private sector participation in infrastructure development through the public-private partnership (PPP) code and has enacted laws to facilitate investments, including expanding tax incentives. R&I is monitoring progress in further improving the country’s fundamentals for sustained economic growth under the current administration.
