Japanese credit rater affirms PHL ‘A-’ rating

JAPANESE credit watchdog Rating and Investment Information, Inc. (R&I) affirmed the Philippines’ investment-grade “A-” rating with a stable outlook, citing its steady economic growth.

- Katherine K. Chan

“The Philippines is expected to realize stable economic growth as well as higher income level against the backdrop of robust public and private investments, development of domestic business such as information technology and business process management (IT-BPM) industry, and population growth, among other factors,” R&I said in a statement on Wednesday.

R&I said the Philippines remains one of the fastest-growing economies in Southeast Asia.

For the first half, Philippine gross domestic product (GDP) growth averaged 5.4%, slower than the 6.2% a year ago. This was slightly below the government’s 5.5% to 6.5% growth target range for this year.

“The fiscal balance as a share of GDP has also improved, while government debt ratio will likely start falling in a year or two. The levels of current account deficit and external debts are manageable, hence there is limited concern on the external front,” R&I said, adding the banking sector remains “stable.”

“Based on this recognition, R&I has affirmed the Foreign Currency Issuer Rating at A-,” it said.

In August 2024, R&I upgraded the Philippines’ rating to an “A-” from “BBB+.” The outlook was revised to “stable” from “positive” previously.

According to R&I, a positive or negative outlook is not a statement indicating a future change of rating. If neither a positive nor a negative outlook is appropriate, it assigns a stable outlook.

The credit rater said Philippine economic growth will be driven by infrastructure projects by the government and private sector, as well as expansion by IT-BPM and electronics manufacturing firms.