Department of Finance (DOF) Secretary Ralph Recto said Friday the country’s reaffirmed “A-” credit rating from the Japan Credit Rating Agency, Ltd. (JCR) is a “strong vote of confidence” in the government’s economic plans.
The high investment-grade rating, with a stable outlook, signals strong macroeconomic stability and robust creditworthiness, which can lead to lower borrowing costs for the government and businesses.
“More Filipinos will benefit from the continued trust given to us by credit rating agencies. Because of this, more investments will come in, more good jobs will be created, and we will be able to lift more Filipinos out of poverty,” Recto said in a statement.
The rating affirmation comes as JPMorgan placed the Philippines on its Index Watch-Positive list, signaling potential inclusion in the bank’s global bond index. Inclusion would increase exposure of Philippine government bonds to foreign investors, further lowering borrowing costs and boosting economic growth.
“This back-to-back good news shows that global institutions recognize the Philippines’ strong fundamentals and sound reforms,” Recto said.
“The message is clear: our growth story is only getting stronger,” he said.
In its review, JCR highlighted the Philippines’ sustained growth rate of around 6 percent in recent years, supported by solid domestic demand, low external debt and ample foreign exchange reserves.
The agency noted that growth would be sustained under President Ferdinand Marcos Jr.’s “Build Better More” program. The newly-enacted Public-Private Partnership (PPP) Code is expected to boost private sector participation in infrastructure projects.
JCR also recognized the enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which has strengthened the tax incentive regime and improved the business environment.
The agency also said inflation has eased significantly, while the poverty rate is declining faster than expected, driven by agricultural modernization and rising wages.
JCR affirmed that the country’s fiscal position is sound, with debt and deficit on a gradual downward trajectory. It noted that the central government’s debt-to-GDP ratio stood at 60.7 percent at the end of 2024, a low level among similarly rated sovereigns.
The agency also recognized ongoing revenue-enhancing reforms, such as the Capital Markets Efficiency Promotion Act (CMEPA), which modernizes taxation of passive income and the Ease of Paying Taxes Act, which promotes simpler tax compliance.
