The Philippines’ economic managers are undeterred by politics, as they welcomed the news that S&P Global Ratings (S&P) raised the Philippines’ credit rating outlook to “positive,” indicating a possible upgrade to an “A-” rating within 24 months.
“All branches of government are focused on fulfilling their various functions in a whole-of-government approach towards our agenda for prosperity,” the economic managers said in a statement.
They issued the statement in the wake of increasing political noise ahead of the 2025 mid-term elections and after S&P Global Ratings (S&P) raised the Philippines’ rating outlook, while keeping the sovereign credit ratings at investment-grrade “BBB+”.
Special Assistant to the President for Investment and Economic Affairs Secretary Frederic Go, Finance Secretary Ralph Recto, Budget Secretary Amenah Pangandaman and National Economic and Development Secretary Arsenio Balisacan said the Philippines is determined to achieve an A rating, and the Marcos administration is ensuring that the transformation of the economy would not be set back by political challenges.
The Bangko Sentral ng Pilipinas said an improved rating or outlook helps the government borrow at lower interest rates, allowing it to fund more services and infrastructure. This also helps businesses borrow at lower rates, helping fund expansion and job creation.
“The BSP welcomes S&P’s decision. This reflects the work the government has done to improve the economic, fiscal, and monetary environment, enabling strong growth to continue,” said Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.
S&P pointed to the Philippines’ above-average growth potential, effective policymaking, fiscal reforms, improved infrastructure and policy environment and solid external position as the key factors for the improved rating.
These developments may also, in part, reflect the country’s on-track fiscal consolidation plan, the recent passage of the CREATE MORE and PPP laws, and its sufficient buffers to ensure unhampered strong growth, supported by its robust consumer base, past structural reforms, and steady inflows coming from overseas remittances and BPO receipts.
The economic managers said the Philippine economy has proven time and again its resilience against both domestic and external challenges, whether arising from natural disasters, geopolitical risks, election cycle tensions, global or regional financial crises, supply chain gaps abroad, cybercriminal activities, or other crises.
“Hence, it is business as usual for the Philippine government,” the economic managers said. President Ferdinand Marcos Jr. returned from the United Arab Emirates for a one-day official visit to strengthen the partnership with the UAE, while the Senate is concluding its deliberations on the 2025 national expenditure program.
Meanwhile, the Development Budget Coordination Committee is set to have its 189th meeting in the first week of December for the regular evaluation of the medium-term fiscal program.
S&P expects a 5.5 percent growth for the Philippine economy in 2024. In the third quarter, the Philippine Statistics Authority reported a 5.2 percent year-on-year gross domestic product (GDP) growth, bringing the average for the first three quarters to 5.8 percent.
The Philippines remains one of the fastest-growing economies in Asia, behind Vietnam (7.4 percent) and ahead of Indonesia (4.9 percent), China (4.6 percent), and Singapore (4.1 percent).
S&P also noted a recent slowdown in inflation, with prices rising by only 3.4 percent in the first nine months of 2024, down from 6.0 percent in previous year.
Remolona said the Philippines has ample reserves to protect against global economic fluctuations. As of end-October 2024, the country’s gross international reserves reached $111.1 billion, enough to cover 8.0 months’ worth of imports, well above the three-month benchmark suggested by the International Monetary Fund.
